A new report has found 1 in 10 staff members are voluntarily resigning from their positions after Australian organisations are failing to offer meaningful career development opportunities for employees. The 2017 Staff Retention Report, released by the Institute of Managers and Leaders (IML, formerly known as the Australian Institute of Management) as part of the National Salary Survey (NSS), has revealed an alarming rate of staff turnovers per year.
While rates are as high as 10.8% in NSW and ACT, resignation in WA shows a much healthier rate of 6.4%. The difference between states is also reflected in the data by industry, with the highest attrition rates in IT (13.9%), business (13.4%) and finance (13.1%) industries, as opposed to the lowest rate in the mining sector (4.5%).
Most interestingly, the report found top reasons for voluntary resignation were factors all within organisations’ control and could be prevented. 79% of staff left to seek new challenges, 58% resigned due to limited career advancement, and 46% left over insufficient financial reward. With the NSS 2017 finding an average cost of $23,753 to rehire each lost employee, Australian organisations are facing substantial financial losses due to poor staff retention.
The IML 2017 Staff Retention Report is based on a snapshot of responses received from a total of 246 organisations across Australia who completed the National Salary Survey. Respondents from each organisation typically held human resources positions or general management roles in smaller organisations. For the report, data was drawn from specific questions regarding staff turnover and the organisation’s policies.
What do these findings mean for your business?
“The Staff Retention Report clearly illustrates employees are staying with organisations not for superficial perks such as free lunches or pool tables, but for opportunities that will help achieve their personal and career goals,” said David Pich FIML, Chief Executive of the Institute of Managers and Leaders.
“Staff stay when their organisations show they value them by investing in their professional development and providing a clear path for career progression. The best way for organisations to retain their talent is to make a role more meaningful by adding value to their employees. It’s astonishing the talent and money an organisation will lose over something that is so easily prevented.”
The report concluded with recommendations for Australian organisations to strengthen their retention rates. Based on the top factors driving resignation and measuring the retention rates across organisations with different benefits and policies, the report recommended that organisations need to invest in increasing the value of their staff.
Offering a more competitive compensation package, health and wellbeing benefits, professional development activities and a clear path for career progress ensures organisations are not suffering financial losses due to unsatisfied staff.
“The National Salary Survey is Australia’s oldest and most reliable salary report,” said Sam Bell FIML, the Institute’s General Manager of Corporate Services and Research. “For 53 years, we have been analysing the nation’s workforce and using the data to optimise how businesses are run through understanding their staff. Our reports find solutions to new issues in business so organisations can retain their top talent, operate in a cost-effective manner, and increase staff productivity.
“In order to engage and motivate employees and to maximise retention strategies, employers need to take a proactive approach to understanding what motivates their employees and what human resource policies and practices make their organisation more appealing than their competitors.”