Talent exodus could cost business up to €1.2 billion
55% of employees are looking to change roles in either the next six or 12 months or once the economy has strengthened, new research from HR firm Personio shows.
Personio has urged businesses to prioritise their people as the country emerges from the pandemic, or risk paying the price.
Today’s research finds that while 60% of Irish employers are worried that staff will leave once the job market improves, just 22% state that talent retention is a priority for their company over the next 12 months.
This suggests that many businesses are leaving themselves vulnerable to huge costs.
Economic analysis reveals that, overall, the cost of additional staff turnover over the next 12 months could amount to an estimated €1.2 billion toll on businesses in Ireland.
This equates to €4,759 per business, with Irish SMEs alone facing estimated costs of up to €538m.
Today’s research shows that when it comes to reasons for leaving, there is a worrying disconnect between Irish employers’ perception of what will encourage their staff to leave and their employees’ reality.
Employers are right to believe that a pay freeze or cut and a worsening work/life balance are key factors that could cause workers to look elsewhere in the near future.
But they drastically underestimate the power of toxic workplace culture to make people leave their job.
Almost four times as many employees than HR decision makers consider workplace culture to be a significant push factor – 6% of HR decision makers compared to 23% of employees.
For employees looking elsewhere, the top two most influential factors are a lack of career progression opportunities (38%) and appreciation for the work they do (28%).
However HR decision makers believe these factors to be less significant, with only 18% and 16% stating lack of career opportunities and appreciation to be push factors in the next 6 months, respectively.
Hanno Renner, co-founder and CEO of Personio, said that the last year has been a challenging one for businesses and HR teams who have often found themselves firefighting, as they deal with multiple new tasks and concerns.
“For some, this has caused other areas such as people strategy to fall to the wayside – but this negligence comes at a cost. Falling out of touch with the workforce’s problems and priorities means that not only could people be more frustrated and ready to resign, but employers will be poorly prepared to prevent people leaving – resulting in lost talent and productivity, and damaged employer brand,” Mr Renner said.
“As businesses look to emerge from this crisis in a position of strength and turn the tide on the costs of a potential talent exodus, they now need to come up with a long term people strategy”, the CEO said.
“By prioritising their people and taking a more strategic approach to people management, employers can prevent an impending talent drain and drive their business performance as well as the wider economy,” he added.