Staff turnover a $9bn burden on business

STAFF turnover is costing Western Australian companies billions of dollars and needs to be addressed to combat labour shortages and improve productivity.

According to Perth brand consultant Anthony Joy, the inability to retain staff is costing the WA economy an average of $9 billion a year.

“That’s a big chunk of coin, and it’s probably a cost that most employers aren’t aware of,” Mr Joy told WA Business News.

“And that’s a conservative figure.”

Mr Joy, who is executive director of The Right Group, said the financial impact comprised costs related to recruitment, re-hiring and loss of productivity.

It’s a difficult situation for employers to overcome, however; as a recent survey from recruitment firm Kelly Services demonstrated, employees see significant benefit in switching employers.

Kelly’s latest Global Workforce Index found 65 per cent of Australian employees consider experience with multiple employers an asset, and 42 per cent admitted looking for new roles despite being content with their current position.

But in the challenging labour market, more employers are focusing on what they can do to retain staff.

Mr Joy said retention strategies had been common in larger companies for some time, but smaller companies were increasingly realising the importance of reducing staff turnover.

Such strategies included more effective staff engagement, and regularly communicating to develop an attractive workplace culture.

“There’s a really strong link between having a great culture where people want to work and low turnover,” he said.

Incorporating career development opportunities has also become a key technique to retain staff- a strategy one of the state’s largest employers, St John of God Health Care, has adopted.

Group director of workforce Rita Maguire said the organisation had realised investing in the current workforce was integral to its ability to meet future staffing needs.

“Retention strategies, especially for the 50-plus generation, are particularly important because we need them and we need their skills and knowledge,” she said.

“It’s about providing a good environment as well as training; but it’s also best-practice training, innovations and systems, and that would come by our investment in research, education and exploring where that best practice is.” Retaining St John of God’s current workforce would not be enough to satisfy future demand, however, with the health provider needing to recruit a further 1,000 staff by 2015 when the new Midland Health Campus opens.

“We’re concerned but not alarmed,” Ms Maguire said when asked about the impending recruitment challenge.

“We’ve got good strategic planning, a very strong brand and are enhancing the already existing relationships that we have.”

Those existing relationships included arrangements with training organisations so St John of God could take advantage of new graduates.

“It’s not just putting an ad in the paper; it’s about developing a relationship with universities and looking at how we can enhance and continue medical research and training to attract those doctors to our organisation,” Ms Maguire said.

Collaboration with training organisations is a tactic the resources industry has increasingly embraced over recent years to attract employees.

Chevron, for example, has been active in partnering with institutions to help build an oil and gas workforce.

Following the construction phase of Chevron’s Gorgon and Wheatstone projects, which will create thousands of jobs, about 340 permanent operations staff will be needed on each.

To help attract those staff the company last year agreed to make a $5.75 million investment in the University of Western Australia to, among other things, develop a liquefied natural gas operator program.

Chevron’s main contractor for Gorgon construction - the CB&I and Kentz joint venture - has a partnership with the Challenger Institute of Technology to employ apprentices from the institute. The joint venture has just employed its 1,000th worker for Chevron’s Gorgon contract and is looking for a further 600 employees.

While partnerships with training institutions were beneficial, Mr Joy said a good brand was imperative for successfully attracting employees.

“Chevron is a good example of a company which has gone out to consciously improve their employer brand,” he said.

“What they do is they ensure that the promise they make about what it means to be part of Chevron aligns with what actually happens inside the organisation.”

The level of diversity within a company’s workforce has also become an important factor in whether it’s an employer of choice - especially when it comes to growing female participation.

It has become accepted that both indigenous and female workers are under-utilised in the resources sector and could help grow the workforce if engaged with effectively.

The rate of indigenous employment has improved significantly as more companies commit to growing their proportion of indigenous workers.

According to data from the Chamber of Minerals and Energy, indigenous Australians make up 4.2 per cent of the WA resources sector workforce - higher than the national resources sector’s figure of 2.3 per cent - while the rate of indigenous employment across all sectors stands at 2.2 per cent.

However the numbers on female employment are not as positive; the same CME data show about 22 per cent of the resources workforce is female.

Although this is up on the 2008 figure of 19 per cent, it is well down on the employment rate of 44 per cent of females employed across all sectors in WA.

That has prompted the CME to urge employers to better utilise female workers to enrich their workforce.

“Current research supports gender diversity as a business imperative and indicates the increased business performance of organisations or industries that have a workforce that better matches the changing workforce and customer demographics,” it said in a report on diversity in resources.

“Given the participation rates for women in the WA resources sector are lower than for men, there exists a significant opportunity to tap into this group in the community.”