RETENTION
Counting the cost of recruitment and turnover
The Chartered Institute of Personnel and Development estimates that the average cost of recruiting a replacement member of staff -- including advertising costs and agency or search fees -- now stands at £2,500, compared to £4,800 when the impact of turnover is also considered.
According to the CIPD's Recruitment, Retention and Turnover Survey 2004, the costs of recruitment double when it comes to replacing a manager or professional.
But some of the most revealing data in the 976-employer survey concerns the proportion of employers that do not formally estimate the costs of people jumping ship. "Organisations are far more likely to count the direct costs to their business of recruitment than turnover," says the CIPD. While 46% calculate the recruitment costs, only 7% consider the wider cost implications of an individual leaving the organisation.
Recruitment problems
Recruitment difficulties hit over four out of five organisations (85%) across the UK in 2003, compared with 93% in the previous year, according to the survey. The CIPD found that lack of specialist skills (cited by 69% of respondent organisations) and experience (66%) are the two factors most commonly reported as reasons for these recruitment difficulties in the UK.
In response, organisations are increasingly employing people without all the necessary skills or experience, but who they judge have the capacity to grow into the role. This is the most popular initiative taken in response to recruitment difficulties, adopted by 43% of all employers surveyed in the last year.
Despite a growing willingness to seek out potential and invest in development, another consequence of the tight labour market is the growing difficulty organisations are having in retaining the talent they have attracted and developed. Over three-quarters (77%) of UK respondents experienced difficulties retaining staff in the last year, up from 72% in 2002.
Labour turnover rates
According to the figures gathered by the CIPD, labour turnover averaged 16.1% in 2003, the same as 12 months earlier. By occupation and industry, services staff (personal protective, customer services staff and sales personnel) have the highest level of turnover (17.7%), followed by manual/craft workers (15.7%) and administrative or technical staff (15.4%).
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Title: Recruitment, Retention and Turnover Survey 2004, Chartered Institute of Personnel and Development.
Methodology: A questionnaire was sent to personnel professionals in private, public and voluntary organisations across the UK.
Sample size: A total of 976 organisations (868 from the UK and 108 from Ireland) responded to the survey employing just fewer than three million staff. As many as 43% of respondents were in the service sector, while 24% were in manufacturing and production.
Availability: You can download the 40-page report, free of charge, from the CIPD web site at www.cipd.co.uk/surveys.
The Chartered Institute of Personnel and Development has over 120,000 members and is the "leading professional institute for those involved in the management and development of people".
Posted 1 July 2004