Research - The talent war heats up
As they compete in the market for the talent necessary to drive their business, many employers now routinely appoint contract staff in specialist positions. The flexible workforce model allows them greater flexibility in managing specialist projects and the associated risks. A recent study by Unisys Australia/NZ found that staff turnover will significantly cost Australian businesses over the coming 12 months. "At a time when the skills shortage is squeezing the Australian economy, staff turnover is turning into a major problem that is already costing the country's businesses more than $A100 billion a year. It costs more to continually replace staff, and in a tight labour market each new hire drives up wage levels for the same job role without a corresponding increase in productivity. When good staff leave, intellectual property and the valuable relationships they established with customers and business partners, go with them. All indications are that this has gotten worse in 2008," said Steve Parker, managing director of Unisys Australia and New Zealand. Unisys' analysis showed the cost of replacing a worker is around 1.5 times that person's yearly salary. Based on ABS figures, 1.2 million people changed jobs in the 12 months to February 2006. Using average weekly earnings, that potentially ended up costing the Australian economy more than $A100 billion a year. A study by the Australian Chamber of Commerce found that 69.9 per cent of businesses were concerned about wage levels increasing without a corresponding increase in productivity. "The Australian labour environment is challenging: we have the lowest level of unemployment in more than 33 years, around 21 per cent of Australians have a bachelor degree or higher, and almost one in five aren't in a traditional full-time role. In other words, employees are qualified, they are getting younger, they are on the move and they don't expect to stay with the same employer for the life of their career," Parker said.
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This article was published in the Australia Freelance Market Newsletter 56.