Frontline Intelligence: Instep - Turnover in HR not pretty

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The HR community is constantly looking at strategies to improve retention for their respective organisations. The cost of turnover to productivity, efficiency and revenue losses are now well understood and documented. There have been many hours of discussion and many words written on how turnover costs companies real money.

Retention programs have been a focus for HR teams ever since the management consulting firm, McKinsey & Co. coined the phrase, ‘The War for Talent’ in the late ’90s. The HR profession is therefore at the forefront of limiting ‘regretted turnover’. However, the thinking that is applied to the internal business customers may not be being applied to HR functions. In this month’s editorial, we ask – is this a case of the ‘cobbler’s children needing shoes?’

The numbers

The turnover of HR professionals with their current organisation was just one of the many areas examined by the recently published 2012 Global HR Viewpoint Survey, (the Viewpoint). The Viewpoint Report is based on responses from almost 3,000 HR professionals in Australia/NZ, Asia and the UK/Europe.

From the results of the Viewpoint, there are some serious questions that should be asked about the level of turnover in the HR profession in Australia/NZ and its reasons.

The results of the most recent survey showed that in Australia/NZ:

 

  •  Nearly 35% of HR professionals have worked for their current company for less than a year and;
  • This increases by year two of employment, where 61% have worked in their current company for less than this time.
  • Also, fewer than 5% of HR practitioners have worked in the current organisation for more than 10 years.

These results are disturbing. Even taking into account that contracting makes up 12% of the overall market in Australia and NZ, they are still worrying statistics.

Some additional observations were also made from the Viewpoint survey results. They include:

 

  • The level of role does impact tenure, and there is clear evidence that churn occurs most regularly in the early and intermediate market.
  • When doing comparisons to the 2010 Viewpoint, there appears to have been a big jump in practitioners with less than one year with their current company. This increased by over 5% to 34.8% in 2012.
  • On the flip side, the number of HR professionals who’ve worked for their current company for more than six years has increased 3.2% from 2010 to 15% in 2012. This group is over-represented by HR professionals in senior roles.

Reasons for being unhappy

Factors that may assist to drive high turnover in HR teams are hard to generalise but they may include:

  1. Constant model and structural changes in HR teams. The Viewpoint found that 55.7% of HR professionals indicated that their teams had been impacted by some sort of functional restructure over the past 12 months. Interestingly, the Viewpoint also found that 70.1% of HR practitioners said that constant change in the HR model hurts the image of the function with business leaders.
  2. The scale of many HR teams being small, limits career growth. The Viewpoint research found that 25.8% of HR professionals are in organisations of 500 people or less which limits the opportunities that exist for career growth in these companies.
  3. The predominance of the Ulrich model which limits internal career opportunities and mobility. The survey found 53.9% of HR professionals indicted in the Viewpoint they are in this model. This numbers jumps to 81% for companies over 10,000.
  4. HR professionals are attracted to an end-to-end role; that is, they have the ability to think and do! Global driven companies limit the opportunity to impact thinking and originate solutions. Only 4.3% of practitioners are attracted to working for a globally driven company.
  5. Changes in HR leadership for an organisation bring a new approach to the function. This often results in the new approach to HR requiring different skills sets and roles being made redundant or incumbents self-selecting out.
  6. The HR function is no different to any other area of the business, poor leadership will create higher levels of turnover.
  7. An overwhelming perception that the only way to get a salary increase is to move companies. The Viewpoint found that 84% of HR professionals felt the best way to achieve a wage rise was to move companies.
  8. HR professionals often work long hours creating burnout. The Viewpoint results indicated that 74.3% of HR practitioners in Australia and NZ work an average of more than 40 hours a week.
  9. Less sophisticated companies and senior leaders hiring the wrong HR professional. HR professionals are often hired into businesses with a promise of wanting a new approach, combined with a commitment to budgets, time and resources. The reality is different and they would be most comfortable with a HR model that just delivers operational support.

 

The final word

There are some clear messages that turnover in HR teams is too high. There are many reasons that the turnover exists, but given that HR’s achievements are linked to building relationships with business customers, it no doubt makes it harder to be successful with constant turnover in the function.

For more information about the 2012 Global HR Viewpoint Survey, please contact The Next Step on the details below.

About the author

Craig Mason is the Managing Director of The Next Step, a specialist consulting practice in the human resources market. For more information call (02) 8256 2500 or email cmason@thenextstep.com.au. Website: www.thenextstep.com.au

 

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