Saturday, 25 July 2009

The Retention Dilemma


Recent research published by the CIPD indicates that although 75% of employees are not planning to move jobs in the near future, difficulties in the current labour market is the major reason for such employees staying with their present employer. Even though they are not actually planning to move, 34% of employees surveyed would prefer to change jobs, and half of these would even consider working in a different sector. So the picture seems to be of a large proportion of the workforce that would like to change jobs, but doesn't feel that it can.

  • Why do companies make strenuous efforts to retain their employees?
  • What are the costs (both financial and otherwise) to the company of staff turnover?
  • How is labour turnover usually measured?
  • Why is labour turnover higher in some industries and functions than in others?
  • If a company had labour turnover of zero, is this automatically a good thing?
  • What practical measures could organisations take to monitor the reasons for their employees leaving?
  • The article states that employees in finance and construction are the ones who are most likely to want to change their jobs. Why might this be?
  • What are the popular areas into which employees are considering moving, and why might this be?
  • The article indicates that there is a possibility that once the current recession is over, the dam of employee dissatisfaction could break, with employees flooding out of companies. What might organisations do to prevent this?


  1. The cost of voluntary turnover (quitting) is staggering. McKinsey Consulting Group estimated it at between 50-200% of a departing employee's salary. A really good book that explains all the costs of turnover is called Finding Keepers, it shows how loss of productivity, time to fill the role, and time to train the new employee take a toll on an organization.

  2. Brett: thanks for the comment. My last organisation had a particular problem with short-service labour turnover (i.e. where employees left after only being with the Company for a short period of time.) It made us reconsider how exciting our advertising campaign was! Some roles need to be described exactly as they are, and not sold as something totally unrealistic.