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What does your staff turnover say about your employer brand?
How long do people stay at your company?
The length of time that people stay at your company, or tenure rate, is a key metric for identifying the value your business provides its employees, and the quality of your employer value proposition. Do you measure yours? We strongly recommend that you do.
There are broadly three ways of calculating how long employees stay with a company:
Retention rate measures how many employees have stayed at a company during a certain period of time. According to Monster.co.uk, a good figure for this is around 90%, though this tends to vary by industry and discipline.
Turnover rate measues how many employees have left a company during a certain period of time. Turnover is more or less the opposite of your retention rate, and can either be calculated with employees who have voluntarily left (regrettable attrition) or the entire turnover rate including employees who are let go. A healthy number here is less than 10% per annum.
Tenure is used to find out how long employees stay with a business. There are two ways of calculating this; one calculation focuses on how long current employees have been around, while another focuses on longevity and calculates the total number of months worked before leaving.
What is the average tenure in today's workplace?
Depending on who you listen to, it might seem that job-hopping is common, but a recent survey carried out by Indeed.co.uk showed that average job tenure is actually around 7 years. For engineers it is less, around 5 years, and for the technology sector, average tenure rate is 6.8%.
Longer tenures are relatively common, with a fifth of workers saying they’re been in their current position for more than 10 years and more than a third reporting they’ve been in their position for 5-10 years.
As you might expect, the older workers surveyed were more likely to have longer tenures. For example, Gen X employees (aged 35-44) report working in the same position for an average of 7 years, workers aged 45-54 years old have been in the same position for an average of 10 years and workers aged 55-64 have remained in the same position for 11 years on average. So, as well as the quality of your Employer Brand, the age of your employees will also have an impact on your overall tenure rate.
Of course, there are implications of a high attrition rate. In their ‘Perfect Match’ report, the Recruitment & Employment Confederation estimates the cost for every wrong hire to be as high as £132,000. In addition, a high churn rate can result in a negative perception and reputation for a company. Potential employees will be cautious that people are choosing to leave the organisation in high numbers.
What does your staff turnover say about your Employer Brand?
There is an undeniable connection and ample evidence that a strong employer brand makes it easier to recruit and retain staff. According to LinkedIn, a positive employer brand reduces staff turnover by a staggering 28%.
With employer review sites such as Glassdoor, it is now far easier for your employees to learn about other opportunities and consider their options. A quick and easy comparison of the reviews on your website against a competitor may encourage them to think about moving on to another opportunity.
So, what do you need to be doing?
If you are not already doing so, it is strongly recommended that you monitor your employee turnover rate and compare this with the industry average and your direct competitors. If it is higher, you need to put in place some measures and processes to address it.
It is also sensible to gather feedback and comments from your existing employees – what is it they feel about the company and what is it like to work there? And make sure you keep an eye on Glassdoor to see what others are doing.
In a competitive job market, attracting, retaining and engaging your staff is more important and more difficult than ever before. This is such a key part of any successful business that we suggest you invest some time into developing a clear, modern, professional employer branding strategy.
A strong employer brand, a positive candidate experience and a compelling employer value proposition are your secret tools to find, and keep hold of, the best talent the market has to offer.
That's where we can help.
Gattaca offers a full employer branding agency service with a unique difference: we know recruitment inside out, especially in skill-short markets.
So, if you need any advice on how to implement any of the processes mentioned above, give us a call on 0207 0100416 or click here to email us.