A high staff turnover can be difficult for businesses to deal with, especially start-ups and small companies. Sometimes there are steps that can be taken to stem the flow, at others it’s simply the industry, bad timing or other uncontrollable effects that impact on staff retention.
As globalisation stalls and populist politics place a threat on international hiring, as best described by RSM, it could make retention even more of an issue. With certain industries experiencing better and worse retention levels, should your business be worried?
Sectors with the Lowest Retention Rates
Information gathered by LinkedIn shows that the average worldwide turnover rate was 10.9% in 2017. From this same data the industries with the highest turnover rates (and therefore lowest retention) were compiled, with the top three being:
- Technology (Software)
- Retail and consumer products
- Media and entertainment
One similarity that can be easily drawn between these three industries is that they are all developing. That’s the main aim of technology, while retail and media are adapting to have a more online focus. Plus, with technology there can be a strong battle for the best talent that lures a lot of specialists to move between competitors.
Within the retail sector it can be quite a vast spread of experience. It’s little surprise that restaurants and supermarkets experience low levels of retention, as they rely on a lot of inexperienced, young and part-time employees. Many of these will only aim to work in low level and seasonal positions for a short period. The rise of online shopping is changing the business model for many retail companies as well, that may rely on fewer staff.
The Highest Retention Industries
At the other end of the scale, the industries with the best retention rates tend to be government positions, with finance and insurance, wholesale trade and engineering performing highly within the private sector. Clear progression, strong pensions and retirement paths and little competition besides moving abroad can explain why governmental positions regularly have some of the best retention rates.
The finance and insurance industries are renowned for offering well paid positions, and similar to engineering, require professionals with specialised skills and qualifications. Therefore, most employers in these industries will do as much as possible to attract and hold onto staff, especially as there may be a lot of competition and difficulties in hiring employees from overseas.
Reasons and Solutions to High Employee Turnover
The same findings from LinkedIn showed that the main reasons for professionals leaving their jobs was:
- Lack of opportunities for advancement
- Unhappy with leadership of senior management
- Unsatisfied with the work environment
Other factors included the desire for more challenging work, unhappiness with the compensation and rewards for contributions. These are the main problems that employers in all sectors need to address to improve retention rates. Depending on your company the ways these are approached may differ, but common solutions involve employee recruitment, increased training, improved pay and/or introducing benefits.
If you run a business in an industry suffering from low retention rates then it can be worth putting into action a strategy to lower your turnover as soon as possible.
