Staff-turnover costs hit $20 billion

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Staff-turnover costs hit $20 billion

The recent increase in staff turnover is costing Australian organisations more than $20 billion, according to a national research study.

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The recent increase in staff turnover is costing Australian organisations more than $20 billion, according to a national research study.

The quarterly HRpulse survey sampled 1007 human resources and people managers over a two-week period in November 2007.

It found a turnover rate for large business of 17.4% and an average of 18.5% across all organisations. Previous estimates put the turnover rate at approximately 12%.

Specialist knowledge

A 2007 study by Vedior Asia Pacific found the cost of replacing an employee was in the order of 150% of salary when recruitment, training, specialist knowledge and productivity are included in the cost.

Based on Australian Bureau of Statistics data for average salary of $55,660.80, size of workforce (10.6 million) and the turnover figure revealed in the study, the increased cost to Australian business is in excess of $20 billion.

The study was conducted by the Australian Human Resources Institute (AHRI) in association with retention specialists TalentDrain. A report of the findings is contained in the Institute’s March edition of hrmonthly magazine.

Major setback

AHRI national president Peter Wilson said the costs of losing key staff at a time of continuing strong demand are a major setback for business.

‘Those organisations which have looked after their people well over time are the ones best able to resist this trend, and will continue to benefit from economic growth,’ Wilson said.


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