Staff turnover survey results out

The traditional staff turnover cycle has been flipped on its head

John Lawson, Lawson Williams Recruitment

The Lawson Williams National Staff Turnover and Employment Survey is now in its 15th year. It has once again produced some interesting findings that assist participating companies to better understand the performance of their recruitment, onboarding, and retention processes.

Over recent years the survey has broadened its focus to include data on skills shortages and vacancies, flexible work options and salaries and benefits. The latest report, covering data to June 30th, 2022, shows clearly that post-Covid market conditions have flipped the traditional Staff Turnover cycle on its head.

In the employment market, under challenging economic conditions, we typically expect to see decreased Voluntary Turnover and increased Involuntary Turnover, however in 2021 we saw a disruption to the traditional Staff Turnover model, with a 44% decrease in Involuntary turnover and a 30% increase in Voluntary Turnover. The average National Staff Turnover rate for 2021 grew to 20.5%. This was a 10.8% increase from 2020 which followed a 6.1% decrease from 2019. See Figure 1.

Figure 1. Average National total, voluntary and involuntary turnover

In the first half of 2022 we found National Staff Turnover at 12.3%, which was an 18.3% increase on the half yearly level at 30 June 2021. Based on this half-yearly figure we are expecting to report another significant gain in National Staff Turnover for the full year of 2022 and into the first half of 2023.

Trending…unpredictable

As we head into 2023 the crystal ball is very hazy and from an economic perspective many balls seem to be in the air. From past experience we know that high interest rates and levels of inflation plus low levels of business confidence will likely dent the willingness of employees to move so freely and as a result Voluntary

Turnover should decline in 2023. However, the slow-to-open borders and associated restrictive immigration settings still leave us with significant skills shortages and continuing demand for talent, along with continuing rising salaries.

A decrease in the level of Voluntary Turnover is therefore uncertain. Will it lead to an overall decrease in National Staff Turnover in 2023?

In these unusual circumstances what can companies do?

1. Measure your staff turnover and compare to other companies in your industry or sector. If your Voluntary turnover is higher than your competitors, it is a fact your business will be less competitive. If it is better than your competitors, you must be doing something right so find out what it is and build on it.

2. Be proactive, identify your key talent and determine their motivators. Develop a range of retention strategies, regardless of the size of your company.

Skills shortages and the cost of vacancy (COV)

The reality of skills shortages is a hotly debated and politicised topic in New Zealand. The 2022 NZ Staff Turnover Survey canvassed organisations on the impacts of current skills shortages. In 2022, 72% of businesses had positions they were unable to fill, an increase from 64% in 2021. See Figure 2 in magazine.

What is an acceptable time for a vacancy to be open? Open positions come with a substantial financial impact for your organisation. Vacancy, no matter how you spin it, impacts the expenses of your business, including:

• Overtime to cover the responsibilities of the open position.

• Loss of revenue due to insufficient personnel

• Time spent recruiting, marketing, and hiring.

Figure 3. Percentage of companies and maximum months a position has been vacant

Of the 72% of businesses with vacancies, 62% of those had vacancies open for more than 6 months with 21.5% with vacancies open for greater than12months.SeeFigure3.

Flexible work options

Flexible work options have emerged strongly as a necessityofCovid-19. Thishascoincidedwithadefinitemovebyemployees to seek better work/life balance with a strong preference for working from both the office and home Employers are recognising that this is becoming an important retention strategy and a tool of attraction fornewemployees.

However, as with so many aspects of people management, the devil is in the detail, and some organisations have found that implementing flexible working policies presents them with a number of challenges.SeeFigure3.

In 2022 81.5% of business reported offering s ome form of flexible work options to some or all of their employees.

Read the article in the magazine to access the link to more information on the Lawson Williams website.

John Lawson is founder of Lawson Williams Consulting Group. He initially studied Biotechnology at Massey and is a professional member of NZIFST. He now enjoys leading a team of recruitment consultants, helping people like you develop satisfying careers.

John Lawson