IN A SIGN that the national skills shortage has started to bite, large companies have recorded higher voluntary staff turnover coupled with larger salary increases this year
IN A SIGN that the national skills shortage has started to bite, large companies have recorded higher voluntary staff turnover coupled with larger salary increases this year.
A national survey found the voluntary staff turnover rate for such companies was 11.1 per cent for 2004/2005 (up from 9.9 per cent in the previous year) and national salaries were up 4.3 per cent (up from 4 per cent in the previous year).
“With employees taking advantage of a buoyant job market, organisations have had to raise salary levels to both attract and retain qualified people,”said David Makin, general manager of education, training, research and HR consulting at The Australian Institute of Management (AIM), which conducted the survey.
“And with the skills shortage unlikely to be remedied in the short term, this upward trend in salaries looks set to continue into the year ahead.”
The survey took in a total of 844 companies: 543 large companies with more than $10 million turnover, and 301 small companies with $2 million to $10 million turnover. It forecast salary increases for 2005/2006 from 3.1 to 4.9 per cent across all industries, with the professional services and retail industries expecting increases of 4.8 and 4.9 per cent respectively.
Consistent with a stronger economic environment, just over a half of the large companies surveyed reported an overall increase in staff numbers in 2004/2005 compared to the previous year, while 28.3 per cent reported a decrease in staff.
The employment outlook remains positive with 44.7 per cent of large companies expecting to increase permanent staff numbers over the next 12 months and only 15 per cent tipping a reduction in permanent staff.
Moreover, there is a trend toward large companies offering more stable work arrangements, with a significant proportion of organisations that use temporary and/or contract staff (31.4 per cent) indicating they will replace temporary/contract staff with permanent staff over the next 12 months.
“In a job market where employees can pick and choose, it’s possible that organisations offering greater job security have a better edge in attracting qualified staff,” Makin said.
The survey also found many organisations anticipate increasing their spend on staff training. Of the 52.8 per cent of large companies that have a training budget, 42.9 per cent expect it to increase in the next 12 months while only 4.3 per cent envisage a reduction.
“Organisations have long been aware that investing in training and development is an important part of any staff retention strategy,” Makin said. “But in the current environment, we’re likely to see training becoming an even greater priority as organisations strive to control the rise in staff turnover,”
As the shortage of suitably qualified staff forces companies to make do with less experienced recruits, Makin also predicted a portion of additional training dollars will go toward bringing skills up to an appropriate level.
Also, the Recruitment and Consulting Services Association (RCSA) said more in-house training needs to be offered by Australian employers, as well as a focus on competency-based training rather than the inflexibility of time-based qualifications.
“To effectively work together, the workplace should offer training, new attitudes and support,” said Julie Mills, CEO of the RCSA.
“This will result in the workforce offering commitment, motivation and positive attitudes to work through increased self-esteem – particularly from those who may have been out of the workforce for some time.”
