Employee Engagement and Labour Turnover

A recent Hays Survey found that 33% of the Aussie workforce is looking to move jobs and 25% have every intention of doing so in the next quarter! It also appears from recent research that there are a growing number of people who are moving jobs to get a pay increase!

This is way above European and USA workers. This indicates that the Australian general public seems to be under a misguided view that the rest of the world’s problems is not going to impact us here. Given that most of the governments in Europe are near bankruptcy and most of the rest of the world governments are in huge deficits and struggling to figure out how to pay their debts, Australians would be wise to be very wary of the good times spin and pay close attention to reality.

Of course Corporations are heeding more notice and with this type of economic environment, most companies are wisely managing their finances tightly. This includes not paying bonuses and/or pay increases.

This is now however a catch 22, because whilst there is a cost involved in paying bonuses and increases, people are choosing to move if they aren't getting them. This causes additional significant costs to a business in increased labour turnover and lower engagement levels. For some businesses, this could outweigh the costs of paying out (see calculations later).

If the survey is somewhat indicative of the general public, you should assume that labour turnover will increase soon. Turnover over the last 6-12 months has been lower whilst people have been concerned about the affects of the economy.

But it seems we no longer care too much! Of more concern, I have heard a number of companies assume their low turnover of recent times has something to do with their management (even though they haven’t done anything in particular or different)!

As a HR Expert I have had over 22 years of observing and understanding employee mindset and behaviour in organisations. If there is one certainty that I can rely on in 90% of cases, is that management’s view of how things are and their general workforces view will differ (sometimes a little, more often than not quite substantially).

So what can you do? The best any organisation can do is work very hard at truly engaging their people at all levels of the business!

That is why an Engagement Survey is a hugely powerful tool and can assist management be highly proactive in managing their workforce.

Our Engagement Survey is highly cost effective and customised to your needs, which enables management to take key proactive action to improve the engagement of their people and ultimately positively affect their bottom line though motivated employees who are planning to stick around. The link between employee engagement and customer satisfaction and bottom line profits is proven beyond doubt now.

That is why all the most successful, top performing companies in the world invest hundreds of thousands on this stuff a year! They truly understand the power of high employee engagement – it is the driving force of their performance outcomes. They treat engagement as a key strategic cornerstone of their business.

Did you know that the minimum cost of replacing a $40,000 per annum worker is estimated to be at least $20,000? Depending on the skills/competency of the role, the average cost to replace is 50-75% of annual salary.

Roles that have a rare skill requirement can now cost up to 150% to fill!
So if you have 100 employees earning an average of $50,000 per annum, turnover of 10% costs your business’ bottom line at least 250,000, 20% 500,000 and 30% 750,000 minimum! That there is a fair amount of dosh! Given that the average benchmark for turnover is 25%, then this is a substantial hit to any businesses bottom line!

That’s before we even discuss DISENGAGED EMPLOYEES! The world class organisations achieve less than 10% disengagement. We have worked with businesses that have 80% of their workforce that are somewhat to strongly disengaged! These businesses are struggling to keep their head above water and it’s no surprise why! Actively disengaged employees seriously erode a business’ profitability. Not to mention the virus they create amongst the troops (these are the people who are deeply negative, yet stay anyway)! I’m sure you can recognise these folks. USA estimates the cost of disengaged employees to be costing in excess of $300 billion in lost productivity alone!! So any more than a 10% actively disengaged workforce is costing you serious money and you don’t even know it!

Imagine if you could take proactive action to improve your business’ performance! Increasing your employee engagement levels directly correlate with a positive impact on your bottom line and key business metrics, even if you could reduce your labour turnover by 5%! That would equate to substantial ROI on your bottom line! The Employee Engagement process is highly cost effective and will identify key issues for your management team to address, to both reduce your turnover and improve your profitability, not to mention improve your customer satisfaction score.

You may be wondering what employee engagement is all about? Well a number of differing views on what it means! Please do yourself a favour and ignore those companies(and there are many these days) that have jumped on the bandwagon and simply renamed their opinion surveys, employee engagement surveys! Make sure you deal with a company that has had substantial HR experience or you may find the ROI won’t be delivered for you!

Employee Engagement is essentially, a quantifiable hard measure that relates your employee’s engagement level with the profitability of your business. Therefore, it is more than a simple employee opinion survey. It is all very nice to know what opinions your employees have, but that is a small part of engagement and individual opinions do not help you improve your business substantially!

What is really critical is an understanding of the hard core motivators, both intrinsic and extrinsic. Understanding how engaged your employees are (i.e. how engaged their minds and hearts) are with the business. I.e., how positive your employees are (and what they say and do) when talking about your business, what their intentions are (whether they intend to leave or stick around) and how prepared they are to exert their discretionary effort to the betterment of the business.

Our Employee Engagement Survey provides you with a quantitative score as well as powerful qualitative information to enable proactive corrective action.

My Performance Coach works with all types of organisations up to 300 employees to assist them in establishing powerful world class people management practices in a highly pragmatic way. We customise our approaches to each business to ensure maximum value add. We work with you from inception, through to communication, strategy design and even change management implementation if you require it. We are experts in driving performance and customer experience and therefore your bottom line.

We have helped one company achieve a phenomenal Net Promoter score of 71%! We have helped other organisations reduce their employee turnover by 8-15% in six months, whilst improving overall organisational performance and engagement amongst the workforce.

Contact us for a no obligation discussion about your business and how we can help you create better results!