According to reports in today’s Fairfax papers
STAFF turnover is costing Australian businesses $100 billion a year in lost productivity, training and recruitment costs – and generation Y is copping much of the blame. …
A new study shows staff turnover for workers in their 20s is running at 40 per cent a year. The rate for all workers is 18 per cent.
$100 billion is about 10% of GDP, and more than double all of education’s contribution to GDP. It doesn’t seem very likely that staff turnover has such a negative effect on the economy, particularly as there is also a balancing positive effect in achieving a better match between jobs and workers.
And if 18% of all workers are replaced each year at a cost of $100 billion it means that every job change costs about $52,000. Maybe some high-level job turnover has costs at that level, but in the industries where staff churn is greatest, accommodation, restuarants, cafes and retail, I’m sure it is a very small fraction of that, given the relatively low levels of skill typically required and the fact that employees will bring skills from previous jobs to new jobs.
Gen Y is being unfairly blamed too. Young people have swapped jobs at lot for a long time. According to ABS labour mobility data (2006 data, the most recent) just over one in five 15-24 year olds had changed jobs in the previous 12 months. About 37% had been in their job for less than a year, the discrepancy between the two numbers being due to people who had entered the workforce during the previous year.
But that is less than the 40% of 15-24 year olds who had been in their current job for less than a year in 1976. I can’t do direct comparisons on job turnover among those with jobs through the whole year, but if anything today’s young people could be slightly more stable in their employment than young people 30 years ago.
The exaggerated results are probably due to the ‘research’ coming from a firm, exit info, that does commercial exit interviews on employees who have quit. If their sample comes from their clients, they have probably been retained by firms which believe they have a problem with staff turnover, rather than firms that are more typical.
There is no basis given for the $100 billion figure. But it sure gave exit info a headline worth far more than paid advertising.
If only journalists did a ‘does it look right?’ test, and spared us these implausible numbers.