The cost of a recent increase in staff turnover to Australian organisations is estimated at $20 billion, according to a national research study of 1,007 HR and people managers. Conducted by AHRI in association with TalentDrain, it found a turnover rate for large business of 17.4 per cent and an average of 18.5 per cent across all organisations. A 2007 study by Vedior Asia Pacific found the cost of replacing an employee was in the order of 150 per cent of salary, and based on Australian Bureau of Statistics data for average salary of $55,660.80, size of workforce (10.6 million) and the turnover figure revealed in the study, the increased cost to Australian business is in excess of $20 billion.
Market downturn magnifies importance of culture
In the current climate of share volatility and economic concern, culture experts recently warned Australian companies that maintaining a constructive company culture is critical to ensure long-term sustainability. “With the current market downturn and continual hiking of interest rates, many of Australia’s companies are feeling a significant amount of financial strain,” said Quentin Jones, Australian director of culture and leadership consultancy, Human Synergistics. “When companies are under this financial strain, leaders often experience difficulty in managing their stress, which then translates to a negative culture within the organisation,” said Jones.
Job ads plummet
Job ads fell by 5.9 per cent in February – the first fall since January 2005 –according to the Olivier Job Index. HR job ads fell 7.3 per cent in February, but recorded comparatively modest growth of 29.35 per cent over 12 months. “Last year the job market was resilient to interest rate rises but our February result suggests the [Reserve Bank of Australia] is finally having an effect,” said Robert Olivier, director of Olivier Group. “Although the employment market is still strong, business confidence has been shaken and employers need confidence to hire. On the positive side, a softening in demand would ease wage pressure and be welcomed by those employers who have battled with the skills shortage for so long.”