Why CEO’s want to know about Staff Turnover
Company boards and CEO’s have become more focused on the costs of staff turnover in the last decade as business competition increases, there is a drive for cost reduction and skills are in short supply.
The New Zealand Staff Turnover Survey has been operating for 14 years and provides many New Zealand Boards of Directors an important measure of business success
Staff Turnover is a measure of a company’s recruitment, onboarding and retention capability. Get these right and you have a competitive advantage. Get them wrong and you will impact productivity and profitability.
Staff turnover includes both direct and indirect costs to a business and includes…
- The cost of exiting or off-boarding an employee
- The cost of hiring a new employee including the advertising, interviewing, screening, and hiring.
- The cost of onboarding a new person, including training and management time.
- Lost productivity—it may take a new employee one to two years to reach the productivity of an existing person.
- Lost engagement—other employees who see high turnover tend to disengage and lose productivity.
- Customer service and errors—for example new employees take longer and are often less adept at solving problems.
- Training cost—for example, over two to three years, a business likely invests 10 to 20 percent of an employee’s salary or more in training.
- Long term disruption to the Talent pipeline
- Cultural impact—whenever someone leaves, others take time to ask why.