There are three important factors in reducing voluntary turnover of talent, according to the Australian Institute of Management (AIM), which said that HR should play a key role in each factor.
While there has been a downward trend in resignation rates and turnover over the past five years, companies are still concerned about turnover and should actively focus on stemming turnover, according to AIM.
The recent AIM 2016 National Salary Survey found that the average annual resignation rate in organisations in Australia was 10.3 per cent in 2016.
Furthermore, four in five Australians are unhappy at work and the top three reasons why staff voluntarily move on include a desire to seek new challenges, limited opportunities for career progression in their current role, and insufficient financial rewards.
“HR executives need to take a proactive approach to understanding what motivates their employees, and to continually focus on developing a pool of productive and engaged internal talent,” said David Pich, CEO of AIM.
“It is also vital for HR executives to stay across current market trends to ensure they are making informed decisions.”
Pich also said HR executives must instil the value of management and leadership skills throughout their talent pool to drive their business strategy.
“Having strong management and leadership skills and employees who take responsibility for their actions will significantly improve workplace productivity, efficiency and underpin an organisation’s competitive advantage,” he said.
“This must be led by HR.”
“HR executives need to take a proactive approach to understanding what motivates their employees”
An analysis of the survey, which took in 253 organisations, identified a number of strategies and approaches to help organisations develop and retain good talent, with the aim of reducing resignation rates to lower than the market average.
These include:
1. Recognising and rewarding employees
The survey found resignation rates were higher than the market average for organisations that cited insufficient financial reward, or lack of recognition/appreciation as key reasons for staff voluntarily leaving the organisation.
Peer-to-peer recognition is often the most powerful and rewarding
“Reassess your company’s current pay model – are you in line with the industry average?” said Pich.
“Are you offering a competitive package that will not only attract great staff, but retain the good talent you already have?”
2. A supportive learning and development culture
Resignation rates are lower for organisations that provide appropriate training and additional opportunities for employees to learn and develop.
“This is not just about formal training courses, but giving staff access to a range of tools that will help them learn and grow both professionally and personally,” said Pich.
3. Corporate Social Responsibility (CSR)
As a larger portion of the workforce is now made up of Generation Y workers; CSR is becoming increasingly important as part of the organisational strategy for many businesses.
The survey found average resignation rate recorded for organisations that have formal CSR policies in place is lower than that recorded for organisations that either have informal policies or don’t have any CSR policies in place.
“Workplace culture starts at the top and filters down, so ensure your leaders are communicating the organisation’s values, and practising what they preach”
Pich said it was important to take steps to create a positive and inspiring workplace culture.
“And don’t just assume what that culture should be – ask your company’s employees what they find inspiring, or what they want the business to be famous for; then take action on their opinions, so they feel heard.”
In the process, he recommended leveraging great managers and leaders within organisations.
“Workplace culture starts at the top and filters down, so ensure your leaders are communicating the organisation’s values, and practising what they preach,” he said.
Pich also observed that a changing mix of employment models and increased contractor rates means more flexibility in the workplace is important for organisations to attract and retain good talent.
“This can be as simple as offering flexible working hours or the option to work remotely,” he said.
“Further to this, as the workforce increases mobility, it is becoming imperative for organisations to offer staff both online and face-to-face opportunities to further develop their skills.
“This will result in some interesting shifts in the training and development space over the coming years.
“Finally, as people work autonomously away from the office or provide their services and IP to multiple organisations on a consultancy or contractor basis, personal management and leadership skills will become increasingly vital.”
Image source: iStock
