People
Issue No. 19 - October/November 2004
Holding on to the good ones
South Australia is struggling to retain its working population, we lose more people than we gain each year. Our population is expected to start shrinking from the year 2027 - but worse, projections show we can expect falls in the numbers in our working population within a decade.
We have the prospect of an ageing population, a significantly smaller workforce, low unemployment levels, and increasing competition for staff. The impact on business in SA could be costly, if we don't do something about it now.
More competition for staff, and less staff, leads to increased business costs and higher staff turnover. Its been estimated that the true cost of replacing an employee can top two and a half times their annual salary! How many thousands of dollars could you save by improving staff retention rates by 50%?
How will increasing retention rates save my business money?
- Increased productivity: Harvard Business School suggests that if you can increase employee retention by just 5% this will result in a reduction of 10% in costs - and will increase productivity by 40%.
- Talent is the differentiator: "The people in your business are what gives you the competitive edge, the competitive differentiation…your structure, your systems, and strategy can be the same as your competitors but your competitive differentiation will be in the shared values, skills and style of your staff. Your people are what differentiates you from your competitors". (Bridget Hogg in European Business Review, vol. 93, 1993.)
- Customer Retention: Your customers may be more loyal to your employees than to your company - if you lose your employees you break the connection - and reduce customer referral and customer retention rates. (The Loyalty Effect. Harvard Business School Press. 1996).
If you don't have a plan to attract and retain talent in your organisation it will have a significant impact on your ability to stay in bus...
