When I Was a Lad... Staff Turnover in the 21st Century

We have all heard it. Sometimes it starts with 'In my day...' or 'Back in the good old days...' but every time the viewpoint is seen through rose coloured glasses. In the recruitment industry, this is most often heard when employers are considering the turnover within their teams. A job for life and lifetime employees were considered to be the best, and, on the employee side, keeping a job with a good company was envied.

What about in the 21st century? First, let's start our discussion by looking at some statistics.

The ABS has some interesting numbers comparing 1992 to 2012 and the percentage of employed persons and the amount of time they have been in their current role. What is clear is that the experience in the workforce varies enormously. 1 in 5 people change their role within a year, while 1 in 10 have been in their current position in excess of 20 years.

Why the variation? This is partly due to the industry. Here are some stats from the ABS and RBA within different industries.

So what about the merits of having a job for life? Is this good for either the employee or the employer? It is true that staff turnover does cost the business. Employers are hit with a loss of corporate knowledge and the cost of training any new staff member. Academics and punters alike have been working on placing a dollar value on staff turnover. I won't go into it here, but we can agree it is significant. Where I would deviate from the consensus is the hidden costs associated with excessive tenure. In recent times, Australia has been asked to embrace innovation. Controversially, I would argue that those employees with excessive tenure tend to take the road most travelled.

'That's the way we have always done it,' or, 'If it ain't broke, don't fix it,' are their mantra. It is easier to do this than it is to innovate, create and change. If a business does not adapt, innovate and change, will it stay in business? Conversely, intimately understanding your systems, procedures and, more importantly, the needs of your customers is profoundly valuable. When times are tough, many corporates 'get rid of the dead wood,' which is code for making those individuals with the longest tenure redundant.

So if you are in business or managing a team, what is best? I would argue that the best employees are those who embrace change and innovation and also stay with you. A mutual pact where the employee understands that they will be challenged and will have to adapt to change in exchange for longevity, career growth and financial rewards that match the market ensures that everyone wins.