The cost and rate of staff turnover to businesses has hit record levels,
according to research.
The CIPD survey of 630 HR professionals shows that a quarter of all staff
left their firms last year – the highest figure since the survey began in 1995.
The CIPD’s 2001 Labour Turnover Survey also shows that two-thirds of
organisations claim that such a high turnover rate is damaging their business.
The average turnover cost of managerial and professional staff is now over
£6,000 per employee – a 28 per cent increase on last year. The overall average
cost of turnover per employee is £3,933.
The professional service sector is the worst hit. It has an average turnover
cost of over £8,300 per employee, with nearly a fifth of companies paying more
than £10,000 to replace staff.
Nick Page, rewards adviser at the CIPD and the report’s author, said,
"The escalation in the rate of labour turnover is a big concern for
business and is clearly impacting on organisational performance.
"However, it is encouraging to see employers responding to such
activity, with one in four planning to introduce work-life balance measures and
many more planning to use exit interviews and change pay and benefit structures."
Surprisingly, the survey shows that public sector workers, such as teachers,
are less likely to leave their jobs than their counterparts in the private
sector. Page said, "Clearly the poor performance of the public sector in
recruiting new people and managing turnover is a key reason for its severe
labour shortages, rather than people deserting the public sector in droves. The
way we manage labour turnover, therefore, is vitally important".
High turnover should be tackled by offering staff better career and reward
structures, claims the CIPD.
By Paul Nelson