The Importance of a Staff Retention Program

The Importance of a Staff Retention Program

15.4.2010

With the recession technically over, it is becoming easier to recruit general staff.  But at the same time, it is becoming more and more difficult to retain them.

During the recession in 2008-2009, employees held on to jobs where often they were not happy. In some cases they were doing more than one job for the same salary, as colleagues were made redundant around them.

QJumpers, an online recruitment company, measures the number of applicants per vacancy across all of its roles advertised nationally.  Before the recession, the average number of applicants per job advertisement was at 13.7.  This was due to the high number of jobs being advertised and low unemployment rate (see figure1).  Employees were being kept happy with strong salary increases of around 4.4% per annum.  The number of applicants per job advertisement is now over 50.

 

Source: Department of Labour, Labour Market Report December 2009

 

The quarter ending December 2009 saw the arrival of the perfect job seeker storm:

• The unemployment rate increased to 7.3% per annum, but the general feeling was that this was the peak and unemployment was going to start decreasing
• An Employers' and Manufacturers Association survey taken at the end of November 2009 showed that 51% of employers did not give staff a pay rise over the last twelve months.
• Global demand for staff was increasing rapidly:
  A report by the Australian Human Resource Institute (AHRI) found that and more than 85% of Australian employers believe skilled migration is necessary to the success of their organizations.  New Zealand is Australia's first port of call.
• New Zealand business confidence was high and the economy growing
  

Source: Statistics New Zealand

• The National Bank Business Confidence Index (the percentage expecting improvement in general business conditions minus the percentage expecting deterioration) was over 40%.
• The Hudson report for the 1^st quarter of 2010 showed that a net 19.6% of employers intended to hire permanent staff between January and March of this year - up 30.9% from the historic lows of a year ago
• Job vacancies advertised online increased 5.8% across all jobs (AVI) and 5.1% in skilled jobs (SVI)
• 
  Source: Department of Labour (SVI and AVI trend series)
  
  

At the same time:

• Baby boomers are looking to retire or at least reduce their working hours
• There a re less Gen Yers entering the job market than Baby Boomers leaving
• Gen Y'ers are planning their overseas holidays
• Gen X'ers are focused on spending as much time as possible with the family

(Take a look at this video clip on this subject: http://vimeo.com/9351959 )

The result:
Conditions are now such that many unsatisfied employees are feeling secure enough to actively start looking for work.

The SEEK Employee Satisfaction and Motivation 2010 survey suggests that 68% of New Zealanders are keeping their eyes open for other employment options.

What does this mean to business?
If you do not put in a staff retention strategy now, you will start to lose staff and it will not be easy to replace the skilled ones.

 

The importance of a good staff retention strategy has never been greater.  Retaining your skilled staff and good workers will be essential to how well your business recovers from the recession and how well it does in the future.

 

What kind of things do you need to look at when considering a staff retention program?

Money is the first thing that most employers think about when considering this question.  Make sure that your employees do not leave because they are not being paid what they are worth but if this is all you do, you will still lose staff.

 

You need to look at the other factors that employees value.  Their relative importance varies depending on who you talk to but the key points in approximate order of importance are:

 

1. Communicate openly with staff, involve them in business decisions, the business direction and respect their opinions
2. Ensure that the work they do is satisfying and rewarding
3. Make sure that the salary, bonus and reward system is fair
4. Acknowledge and reward good performance
5. Ensure that you discuss career paths and training for employee development and then follow up on them
6. Be open to flexible working options

 

 

The times are definitely changing.  Staff turnover is increasing and it is becoming increasingly difficult to retain good people.  Employers need to move with the times and evaluate what they can do to retain their good people.  It is much easier to retain your people than trying to replace the.

 

 

 

 

Simon Oldham

Sales and Marketing Manager

QJumpers