Apparently, Australia will be facing The Great Resignation in 2022, with almost 40% of all employees predicted to change jobs in the next 12 months (up from 25% just 6 months ago). So with that in mind, it might be time to put some thought into what you might do proactively in order to head, at least some of, those losses off at the pass.
Depending on the industry sector, average Australian workers stay with their employer for around four years, although GenY and Z (aka the millennials – those aged 18-37) generally stay less than three.
Research has shown that every time an employee leaves your business, you not only lose a level of organisational knowledge and customer/supplier/staff relationships, you’re also likely to lose productivity and yes, you guessed it, real money. In fact, PwC estimated in 2018 that Australia loses around $4 Billion (yes, with a B) in productivity through turnover each year – in that it takes around six to nine months to locate, train up and properly onboard a replacement.
But worse still, at least on an individual business level, is the fact that to replace a departing employee, will cost, on average 1-2.5 times their annual salary. And when you consider the looming tightness of the current Australian labour market, it might go even higher than that in 2022.
After almost two years of Covid, with its lockdowns, uncertainties and extra responsibilities that often accompanied the job, even if that job was working from home, a lot of workers are feeling the burn – burn-out that is. And where there’s burnout, job loyalty could be at an all time low, with people citing work-life balance and wanting greater respect as reasons for leaving. It might also be because people want a fresh start or they’ve reconsidered what they’re looking for from a role.
When you think about it, 40% is 1 in every 2.5 workers. So if you’ve got a staff of 10, you might expect to turnover around 3-4 workers. Ouch! Plus departures might also have a bit of a ripple effect making others wonder if the grass is greener elsewhere further impacting your business’ productivity.
So what might you consider putting in place (if you haven’t already) in the lead up to 2022 to stem your potential losses.
Talk to your staff
See where they’re at. Talk to them about how they want to feel in the short-term and what they’re wanting to achieve over the longer term. Then get them to think about how you might be able to work that into their everyday or special projects. Retraining is also popular, with a 2021 survey by RMIT and Deloitte finding 1 in 4 staff would prefer extra training over a $50 a week pay rise.
Thank them for the work they’ve put in in 2020-21
It’s been hard all round and a little gratitude goes a long, loooong way. Don’t just send flowers or wine or beer. Figure out what actually does it for them as a person and do that. It doesn’t have to be a grand gesture, particularly if money is tight. Little things that show you get them as a human can be worth their weight in gold.
Pay them what they’re worth
Whilst compensation has fallen from first to sixth place on the scale of what people are looking for according to Gartner, it is one of the reasons staff might be open to look around. If the market is paying more than you are currently, consider having a conversation about paying more. No-one likes doing it, but remember the 100-250% of a year of their current salary as the cost of hiring someone new. It’s much, much cheaper to pay more and keep a staffer who’s great at their job.
Consider your team’s work-life balance
If Covid taught us anything, it’s that anything and everything can change in the blink of an eye and things that weren’t really possible before, might be now. Given ‘balance’ is one of the top reasons why staff might be considering their options, it might be worth giving some thought to how you might bring a little more balance into being. It might be something as simple as work from home every x days or encouraging staff to start late or leave early several days a week to ensure they can spend more time with their kids, horses, dogs, gardens, gym trainers, charity or whatever it is that matters to them.
Obviously, everyone can’t have Friday off (although the 4 day week is taking off in some parts of the world) or start on Wednesdays at 10am or finish at 2pm if customers/clients/suppliers, etc need someone on site. And you might need to be a little more creative if you’ve a front-line type business such as health, retail, hospitality. But it’s not about a blanket one size fits all approach. Rather it’s more about asking what might work best for your team. And if by chance you hit a bit of a brick wall in your thinking of what’s possible, ask your team to come up with a good solution that balances out work-life and growing the business. You might be amazed at what they come up with.
If you’d like to run through budget scenarios for what’s possible in terms of growing your business and maintaining your team in 2022 and beyond or single touch payroll and superannuation changes that are due soon, we’d be delighted to help. You can call us on 02 6023 1700.
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