According to a recent study by Penna Plc, a Human Resources firm in the UK, the lack of prospects and opportunities within a company is the primary factor that drives employees to resign.
“It is important that companies focus on a career development culture and that they value advancement opportunities from within the organization,” states Bev White, Executive Director of career management services at Penna Plc.
Stop the bleeding
The study finds that 20% of respondents said that it is primarily the lack of prospects for advancement within their company that encourages workers to change jobs. Although 42% of respondents plan to increase their investment in training their staff over the next 12 months, one in five admitted that they hadn’t yet developed any concrete plans to do so.
Far from being an unnecessary expense, investing in human capital is beneficial for both employers and workers. Developing the skills of the workforce means “working teams would have greater professional commitment, which companies could benefit from by taking advantage of this investment as career development opportunities," says White.
According to the latest figures, for all occupations the average turnover rate for Quebec is over 30%. While the phenomenon is intensifying, it is not without risk for companies. In addition to suffering from this turnover’s direct and indirect costs, many seem to have difficulty retaining their talents.
“The consequences of a high turnover rate are usually assessed based on productivity losses and replacement costs. However, turnover also results in decreased performance and increased workload in the company,” writes Pierre-Sébastien Fournier, professor of management at Laval University and co-director of the University’s Chair in Occupational Health and Safety Management.
The necessity of feedback
The study also finds that, in most companies, HR managers do not take the time to talk to employees about their respective career plans.
Still, “we know that employees belonging to the C and Y generations enjoy regular updates on career advancement,” says White. “Companies must now find a way to provide constructive feedback to their employees as often as possible and give them informative updates.”
A high turnover rate can cost a company as much as twice the salary of an employee. Faced with these losses, which can amount to thousands of dollars, it is up to companies to reflect on the impact of not providing better opportunities for their employees.