Employee turnover is accelerating as economic and labour market conditions improve.
After subdued levels in recent years, research from consulting firm Hay Group, suggests that this rising trend is set to continue over the medium term with employee turnover predicted to rise sharply in 2015.
The research, conducted in association with the Centre for Economics and Business Research (CEBR), shows that UK turnover rates are predicted to rise from 14.6% to 18% by 2018, representing over one million more leavers compared to 2012.
Melody Moore, Leadership & Talent Consultant at Hay Group spoke to Recruitment Grapevine about the pressure that organisations find themselves under to select, develop and retain talent.
“The improvement in the economy and corresponding increase in staff turnover is a double edged sword for businesses,” she said.
“On the one hand it means that the talent pool becomes less stagnant, with more talent available to attract to their business. On the other hand, organisations will have to work harder to retain the talent they have as other firms will be aiming to entice their key employees away.”
Moore suggested that the key to successful recruitment was to focus on “attracting, recruiting, retaining”.
Moore says that Hay Group’s recent acquisition of psychometrics firm Talent Q reinforces a strategy to be a leading advisory company both in consulting and technology led services.
“The importance of excellent talent management practices, and the desire to offer a full range of products and consulting services to help clients attract, recruit and retain their key talent is vital in the workplace of today and tomorrow,” she said.
“The economic crisis and lack of confidence in the economy has resulted in several years with a relatively low employee turnover rate, potentially giving organisations false confidence in their ability to retain key individuals.
“Organisations that attract top talent have a clear view of their Employee Value Proposition and make this explicit at all stages of the recruitment process. Businesses that are winning the war for talent have a clear picture of what they are looking for, and what characteristics make someone successful in their organisation.”
Hay Group research found that confidence in leadership, opportunity for career development, autonomy, supportive work environment and appropriate compensation are among the most consistent predictors of employee engagement and key factors affecting employee retention.
Moore added: “Leading firms carry out regular employee opinion surveys to ensure that they know what their top talent want and need from their business. They understand the key relationship between an employee and their line manager and provide support and development for their leaders so that they know how to nurture and develop talent.”
Globally, average employee turnover rates are predicted to rise from 20.6% in 2012 to 23.4% by 2018.