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Staff turnover cost 'huge' By JON HOYLE - The Dominion Post | Friday, 01 February 2008 Staff turnover is a huge cost and will continue to sap companies if employers fail to develop and retain employees, according to an information services consultancy. Unisys estimates the cost of replacing a worker is 1.5 times that person's annual salary. "All indications are that this is will get worse in 2008," Unisys New Zealand head of account and service delivery management Terry Shubkin said. Linked employer-employee data from Statistics New Zealand showed more than 300,000 people, or 17 per cent of the workforce, changed jobs in the year to June 2006. Unisys said recruitment cost more in a tight labour market and each new employee drove up wage levels for the same job, without a matching increase in productivity. Business NZ chief executive Phil O'Reilly said the cost for some companies could be higher than Unisys' estimate. Apart from the cost of recruiting and induction, there was a loss of productivity as the new employee got up to speed with a new job. There was also a loss of institutional knowledge and intellectual property with departing employees that could affect revenue, he said. "What's clear is that the cost to companies is substantial," he said. Mr O'Reilly said even high-performing small to medium companies were vulnerable to knowledge loss when a worker left. Much of a smaller company's collective knowledge was stored in the heads of employees rather than in the databases and standard operating procedures used by large companies. Ms Shubkin said instead of offering potential staff iPods and champagne when they join, as has been reported, companies needed to develop programmes that nurtured staff and provided long-term rewards. Unisys said employers should develop tailored, progressive career paths within their companies, groom their best performers and support work-life balance. Mr O'Reilly said small-to-medium companies often had difficulty finding the next career step for valued employees. Grooming high-performing employees needed to be carefully managed so as not to cause resentment among other staff. Most larger companies were already working toward providing employees with greater work-life balance and that would filter down to smaller companies. "I don't think it's a problem of employers thinking this is not a good idea, it's a matter of giving them the tools to get on and do it," he said. The cost of not getting it right: Staff turnover cost 'huge' By JON HOYLE - The Dominion Post | Friday, 01 February 2008 Staff turnover is a huge cost and will continue to sap companies if employers fail to develop and retain employees, according to an information services consultancy. Unisys estimates the cost of replacing a worker is 1.5 times that person's annual salary. "All indications are that this is will get worse in 2008," Unisys New Zealand head of account and service delivery management Terry Shubkin said. Linked employer-employee data from Statistics New Zealand showed more than 300,000 people, or 17 per cent of the workforce, changed jobs in the year to June 2006. BR>
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