Staff turnover in New Zealand companies is a significant cost to the country's employers and needs to be addressed, claims consulting group Lawson Williams, after completing a survey in partnership with the Human Resources Institute.
This is their sixth annual national survey, and it found that turnover is particularly high in the first year of employment.
John Lawson of Lawson Williams says that having to repeatedly recruit people is extremely expensive.
"Not only is there the expense of hiring someone, but if someone leaves, there is a loss of productivity as a new person needs to be trained into the job."
Lawson says: "Perhaps surprisingly, turnover rates for those employed less than 12 months is higher than total turnover - 20.7 per cent is the average turnover inside 12 months employment compared to turnover overall of 17.7 per cent.
"This finding highlights a major improvement opportunity for organisations where first-year turnover is high ..."
Lawson says what companies need to do is vastly improve the selection process. "Companies have been getting huge volumes of job applications, and it can be difficult to decide who will be best for the company and the position. It's important for the company not only to be looking at the skills and qualifications a person may have on offer, but also at the behavioural aspects."
He says it's worth spending money on psychometric testing, reference checks and in-depth interviews.
"You need to be looking at both the skills and the behaviours to see if the person will indeed fit into your organisation."
Lawson says the principle is to hire tough and manage easy. If you get the right person for your company, that person will stay and bring value.
An example would be if you hire someone on the basis that they have a diploma in accountancy, and they happen to be someone who thrives in a hierarchical workplace where they are told what to do all the time, but your company is more relaxed and expects people to "just get on with things". You may find the employee is not a good fit and leaves and then you have to find someone else and train them up.
"Companies need to be looking at soft skills as well has hard ones. A person can be trained reasonably easily, but it's far more difficult to deal with behaviours - behavioural skills need to be assessed and they need to be in line with what a company needs."
He says: "If your company is very bureaucratic, you should not be employing someone who is frustrated by bureaucracy, perhaps you need to look for someone who likes it - who feels safe in a solid environment with systems to follow."
He does say, however, if you want to change the culture of your organisation, you need to hire for that too.
The survey has found that staff turnover is particularly high for unskilled workers and indeed the selection process for them tends to be low.
"Employers need to be doing dependability tests. What is the employee's attitude to safety in the workplace? If it's low then that could turn out to be extremely costly. Does the person have a good attitude? It's all important."
Lawson says: "Unfortunately, the recession and stagnant economy since 2008 has driven many organisations to reduce recruitment costs and at the same time there is a desire to increase speed to get new staff on board as soon as possible.
Another way New Zealand companies fail, says Lawson, is in the induction process.
"Companies need to ensure that people are trained for the task and properly settled into their team.
"This has a lot to do with the line manager. For the first three months the person is getting comfortable in the team and culture of the organisation. They are learning what's acceptable and what's unacceptable - in other words, the new employee is being socialised into the team and the company."
Lawson says in bigger workplaces there are formal induction programmes, but smaller companies tend to be more informal.
"Mentoring systems or buddy systems are good. In those first three months, the new person must be properly introduced and be aware of the company's goals and way of doing business," he says.
Turnover per region
Perhaps caused by instability and redundancies in the public sector, Wellington tops the turnover tables and provincial centres have the most stable workforces. Turnover by region for 2012 is:
• Wellington - 21.8 per cent
• Christchurch - 19.5 per cent
• Auckland - 17.2 per cent
• Rest of South Island - 14.8 per cent
• Rest of North Island - 14.5 per cent
• Waikato - 13.6 per cent
Next month, Herald Jobs in conjunction with The Career Specialists, are starting a career advice column. Send your career-related questions to: email@example.com.