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Staff turnover on the rise

NZN 21/07/2016

Staff turnover is rising with more workers in New Zealand willing to risk taking on a new job in the current economic climate.

"The average tenure was once where people used to think three years was good but it's closer to two years now," says Simon Bennett, chief executive of AWF Madison, the country's largest recruiter and temporary labour provider.

Anecdotally, average employee tenure is decreasing. That's good news for recruiters but less so for employers.

International studies have estimated direct and indirect costs associated with staff turnover at a total 100 to 300 per cent of an employee's salary for managerial staff and 50 to 120 per cent for operational staff.

A construction boom in Auckland has led to an acute shortage of skilled tradesmen while the local IT industry has resorted to signing-on bonuses of up to $15,000.

The annual New Zealand Staff Turnover survey released in March found the national average turnover for 2015 was 18.4 per cent - the highest rate since 2008 and an 11 per cent increase on the previous year.

There have been gradual increases in staff turnover over the past 20 years.

Since 2014 a record number of people have entered the workforce which has seen more people change jobs despite continued low wage inflation.

There isn't much employers can do about the shift, which is largely generational, Mr Bennett said, but they need to adjust their recruitment and induction practises to get new staff "up and running more quickly".

Human Resources Institute chief executive Chris Till says significant jobs growth nationwide this year is continuing to fuel staff turnover despite record high migration.

While some staff turnover can be good for an organisation by bringing in new people with fresh thinking, anything over the 30 per cent mark typically has a degrading impact because of the loss of institutional knowledge and skills and recruitment costs, Mr Till said.

Money is typically not the major factor for a worker leaving - a lack of career prospects, bad workplace culture, or a failed relationship with the boss are key drivers, he said.

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