Irish businesses are sleepwalking towards a costly talent exodus, with over half of employees looking to change roles over the next year or once the economy has strengthened.
Recent research from Personio, the all-in-one HR software solution, is calling on businesses to prioritise their people as we emerge from the pandemic, or risk paying the price.
The research finds that while six in 10 Irish employers are justly worried that staff will leave once the job market improves, only just over a fifth state that talent retention is a priority for their organisation over the next 12 months — suggesting 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 €1.2bn in Ireland — equating to €4,759 per business — with Irish SMEs alone facing estimated costs of up to €538m.
When it comes to reasons for leaving, the research uncovers a worrying disconnect between Irish employers’ perception of what would prompt their staff to leave and their employees’ reality.
While employers are right to believe that a pay freeze or cut (36% HR decision-makers vs 22% employees) and a worsening work/life balance (20% HR decision-makers vs 23% employees) are key factors that could cause workers to look elsewhere in the near future, they drastically underestimate the pushing power of toxic workplace culture.
Almost four times as many employees than HR decision-makers consider workplace culture to be a significant push factor (6% HR decision-makers vs 23% employees).
Hanno Renner, co-founder and CEO of Personio, said the last year has been a challenging one for businesses and HR teams who have often found themselves ‘firefighting’ 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,” Hanno said.
“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.”
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 need to come up with a long-term people strategy.
“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.”
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 six months, respectively.
Ross Seychell, chief people officer at Personio, said that it’s not surprising that people are looking to move roles as the economy improves. Many people decided to stay put and postpone job changes while the labour market was more uncertain.
“However, now, as the economy recovers and people have more confidence in the job market, not only will people have more opportunity and confidence to leave their jobs for pastures new, but burnout and frustration with lack of employer support during the pandemic may push them out the door.
“As employers plan their return to the office, they should make sure to handle this process with care and consideration.”
Indicative of a broader disconnect that could be contributing to a lack of loyalty among employees, the research also finds that employers believe they have supported teams and managed people strategy better than employees suggest they have.
HR decision-makers are over 80% more likely than employees to rate their business’s support for career development as ‘good’ (72% HR decision-makers vs 39% employees), and more likely to see its support for work/life balance (70% HR decision-makers vs 53% employees) and mental/physical wellbeing (68% HR decision-makers vs 44% employees) in a positive light.
