15% Employee Turnover in Shannon Region last year – slightly below national average of 18%
Expected employee turnover for 2022 is 16.5%
Higher salaries top reason for employee turnover
Employee turnover more than doubled nationally last year to 18% from 8% in 2020 and it is expected to increase further this year to 18.2%, according to the latest HR Barometer Report from Adare Human Resource Management. However, the findings for Shannon show a slightly lower rate of 15% with an expected turnover for 2022 of 16.5%.
Half (50%) of Shannon-based employers cited ‘Higher salary with the new employer’ as the main reason for the increasing employee turnover with ‘Career progression’, ‘Better work life balance’ and ‘Better benefits with new employer’ also featuring.
In an effort to address this challenge, over half (57%) employers have or will be increasing salaries in 2022, slightly above the national average of 54%. However, the average salary increase is slightly below the national average with Shannon businesses stating an increase of 4.6% compared with 5.3% nationally.
Commenting on increasing salaries, Sarah Fagan, Managing Director of Adare Human Resource Management said: “While the market is seeing increases in salary, total reward is not just about the financial benefits. It should incorporate the intrinsic value brought through your business culture. It recognises and shares successes of employees, it balances paid benefits with those of a non-financial value. And, most importantly, it considers the employee experience as an asset that requires the right investment.”
Increasing cost of recruitment
The cost of recruitment has also increased to €7,491 per employee, up from €4,215 in 2021 and €6,895 in 2020. Organisations in Shannon have, however, stated that it costs an average of €10,201 to replace an employee. With an expected turnover of one fifth of this group of businesses, the financial cost for recruitment for these organisations is significant.
Given the increasing cost of recruitment as well as a skills shortage across all sectors, it comes as no surprise that ‘Retention’ is the top HR priority for over half (52%) of employers this year. This is followed closely in second place by ‘Employee Engagement’ with 51% citing it as a top priority. Both go hand-in-hand as an engaged workforce is more likely to be loyal and productive while also providing an employer with a real time gauge on how content employees are as well as identifying any issues.
Fagan said: “During the pandemic, the employment landscape was in a state of flux as new ways of working emerged. However, as evidenced by our research, it is clear it’s no longer about new ways of working; the focus now is on people.
“It is broadly accepted that flexible, blended, hybrid and remote working are here to stay. But while the pendulum of work life balance swings more favourably towards employee preferences, flexible work arrangements are only one aspect of the true Employer Value Proposition.
“Now more than ever, investment in People is of critical importance. Not only because of the expected turnover and associated costs of replacing employees, as outlined in our HR Barometer Report, but also because within the market there is a skills shortage. Developing a robust retention strategy will provide the competitive edge in maintaining the talent that you have and with the appropriate considerations will positively impact on any talent acquisition.”
While ‘Increased salaries’ was the top initiative introduced by Shannon-based Organisations to support retention, ‘Flexible working arrangements’ was second with nearly four in ten (37%) employers introducing it.
“The Right to Request Remote Working Bill 2021 reinforces the Government’s commitment to remote working strategy and provides some clarity to employers. While remote and hybrid working really came to the fore during Covid-19, our research shows that it has been at the top of employer’s agendas since 2018.
“Employers need to take the time now to assess the business needs in line with potential remote working requests. Our advice to Employers is to take a considered approach to implementation of flexible working arrangements, remote and hybrid working.”
The research for the HR Barometer Report 6.1 was conducted by Amarach Research in March and April 2022 and represents businesses across a broad range of sectors nationwide.