The New Zealand Staff Turnover Survey Report 2018 states that staff turnover in the property and construction sectors is 23.8%. and 18.6% in the manufacturing and industrial sectors. In this post, we explain the costs of employees moving on and why it makes sense for building companies to look after their workforce.
The costs of staff turnover
Losing an employee is costly — even if they’re not too flash. Although every industry is different, as a rule of thumb, an employee who resigns after at least 12 months in a position, costs their employer about three times their annual salary.
Why does staff turnover cost so much? Here is a breakdown of the costs of hiring and losing an employee:
- Hiring (advertising, interviewing and screening)
- Onboarding (training and time spent by management)
- Lost productivity (it can take a couple of years for a new employee to be as productive as their predecessor)
- Diminished morale (when other employees see high turnover, they become disengaged)
- Errors (a new employee is probably less able to solve problems and more likely to make mistakes)
- Training (over two to three years, training an employee can cost 10% to 20 % of their annual salary).
You can see how the costs mount up.
Why do workers leave their jobs?
It’s no secret that there is a massive skills shortage in the New Zealand construction industry — particularly in the case of electricians, plumbers, engineers and building and project managers. Consequently, if an in-demand worker isn’t happy in their current position, there’s not much stopping them from moving on. It’s important to note, though, that salary alone doesn't determine workplace satisfaction. Many other factors come into play such as recognition, job status and career opportunities. Returning to the New Zealand Staff Turnover Survey Report, the primary reason for resignations was family/personal (59%), which, of course, employers can’t do much about. However, promotional opportunities came a close second at 53%.
Tips for retaining good workers
So, you’ve got a great team. They are motivated, skilled and hardworking. What can you do to encourage them to stick around?
Here are some tips:
- Create a solid foundation to build on: Try to eliminate reasons for your workers to be unhappy. Common causes of worker dissatisfaction include poor working conditions, low wages (matching the industry standard should be enough), excessive bureaucracy and a toxic work culture.
- Develop work satisfaction: Create a work environment that encourages excellence and show appreciation for good performances. Get your workers involved in decision making and give them responsibilities that suit their abilities. Show your staff that they have a future with your company by providing training and career opportunities.
Are you looking for staff such as carpenters, labourers, drivers and warehouse workers? We specialise in placing candidates into the construction, warehousing, manufacturing and transport industries. Please email us or speak to one of our recruitment consultants on 0800 999 599.