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Staff turnover rates: The hot potato that no one wants to own.

I was astounded when I read that according to a recent survey by AHRI, close to 70% of Australian organisations don’t measure the cost of staff turnover.1

Staff turnover is extremely expensive to business.3

The cost of replacing staff is estimated between 16% and 200% of yearly salary of the worker dependent on the industry.3

There are the obvious costs of readvertising, termination payouts, retraining etc but what about the less obvious ones? These include the lack of productivity by staff who recruit a new member and the initial lack of productivity from the new hire themselves.

Its quite complex to fully calculate the impact costs when someone leaves.

There are variations from industry to industry and unforeseen events such as restructures, product downturns and sudden market changes can all influence turnover figures. Yet whilst organisations may cast a glance staff turnover rates annually or even bi annually, this figure isn’t the one that leaders choose to sweat over when they regularly examine business performance.

Often staff turnover stats are the “soft” kpi in business, with no incentives or bonus tied to a positive or negative result. We are clearly not giving this business statistic the ongoing scrutiny it warrants.

The cost of staff turnover is estimated at $3.8 billion in lost productivity annually in Australia. 4

If incentives for all leaders, from the C suite or Franchisors, to the HR function and immediate Managers/Supervisors, depended in part on maintenance or reduction in staff turnover, perhaps these groups would collaborate more effectively to create engagement and a positive workplace culture.

Measuring our efforts to create a stellar culture and a happy workplace can assist us to understand why people stay and leave. With ongoing commitment and work, organisations can become better functioning, happier more profitable places when intentional turnover reduces.

No more ducking and weaving – Part of the jigsaw of employee engagement and culture is measuring and owning employee loss and analysing the outcome.

  1. 2015: AHRI Turnover and retention: Whitepaper

  2. 2016: Dr Lindsay MacMillan OAM: Reventure Ltd: Snapshot of the Australian Workplace:

  3. 2012: Heather Boushey et al: Centre of American Progress: There are significant costs to replacing employees

  4. 2014: PWC Media Centre: Poor Talent alignment costing Australian businesses $3.8bn in lost productivity.

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