Why staff keep leaving

Staff turnover is high across the board in New Zealand. Picture / Reuters

Helping staff have fun in the workplace, creating job-sharing schemes and supporting community involvement are way down on employers' lists when trying to attract staff, according to a survey of 300 New Zealand companies.

The report also found that older workers are increasingly being targeted to fill the skills gap.

The survey commissioned by Select Australasia and Clayton Ford reveals that although 93 per cent of New Zealand employers understand why staff leave their organisations, they appear to be doing little to reduce staff turnover, which remains high across the board. It also says employers expect that finding and retaining staff will continue to be a challenge.

A clue to the problem may lie in one question put to hiring managers in Auckland, Christchurch and Wellington in March. "What are the three greatest challenges for 2005?" Top was "retaining staff", second came "employee development" and last was "reducing costs".

So how can firms retain and develop staff while at the same time cutting costs? Suzanne Boyd of Clayton Ford says reducing staff turnover is the key to reducing costs.

"If someone leaves a firm after 18 months then the firm will have lost two years' worth of salary [due to the cost of hiring, disruption and recruiting a replacement]," says Boyd.

More than half the people who took part in the survey said they would increase staff numbers this year. And most of them also said that staff retention was a critical issue and they were paying more attention to effective attraction and retention strategies.

However, Debbie Loveridge, chief executive of Select Australasia, says figures released by the Department of Labour last month show 21 per cent of employers experienced an increase in staff turnover in the March quarter - the highest figure since 1985.

"Although employers recognise the difficulty of finding and retaining staff in the current market, they are still not meeting this challenge," says Loveridge. "While it's positive that employers are taking retention strategies seriously, ongoing high turnover suggests that their strategies are not addressing the issues most important to employees."

Attractive pay and benefits, personal development opportunities, formal induction and structured learning and development programmes are the top four retention strategies used most by employers, according to the survey.

But only 63 per cent of respondents offer flexible working hours, and many others cited incentive schemes, job sharing, improving office morale and free parking among retention strategies in place.

However, 22 per cent of respondents are offering staff hiring incentives.

Boyd says hiring bonuses can include extra holidays, relocation expenses or a lump sum payment of between $2000 to more than $10,000. Some companies are also giving staff bonuses of hundreds of dollars if they help recruit friends and family for their firm.

"Golden hellos can happen at any level," she says. But they were normally negotiated by people entering jobs from middle management upwards.

Loveridge says: "Employers may need to look more carefully at the marriage between what staff value and want, and the retention strategies they have in place."

Most respondents valued recruitment and retention strategies targeted at youth, Generation X and older workers.

"We have been saying for some time that older workers are an untapped resource with huge potential benefits for the economy. The results suggest that employers are looking for people across the age spectrum which is a practical way to address the candidate shortage," says Loveridge.

"Older workers are often overlooked despite being more experienced, highly productive, extremely loyal and having a strong work ethic. We always encourage clients to look at a candidate's skills and experience rather than their age and the survey results show that more employers are doing this."

Building a company's brand and developing a higher profile are also paying off for some firms in their battle to attract talent.

Employment Trends

The top three challenges for companies identified by hiring managers are:

* Retaining existing staff

* Employee development

* Reducing costs

Benefits being used to attract talented staff

* Subsidised medical insurance

* Subsidised super scheme

* Performance-based bonus scheme

* Study assistance programmes

* Child care facilities

* Recreational activities

Taken from the Employment Trends Survey 2005 by Select Australasia and Clayton Ford.