Thursday, May 31, 2007

The Fight for Staff Retention

This is a recent post by Jeremy Gordon, the writer for the China business Blog. He goes into great detail about studies conducted in China profiling the high employee turnover.

I have already commented that there is a talent squeeze at the top and bottom of the market. Now, a new report by Mercer Management Consulting indicates that retention of staff is becoming a major issue. Mercer’s survey of 114 companies (including many multinationals) in China (as reported by Forbes) found that, compared to last year:

  • 42 percent experienced increased turnover for support staff
  • 54 percent have experienced higher turnover for professional staff
  • Average tenure for employees aged between 25-35 years was 1-2 years in 2005 (3-5 years in 2004)
The turnover of staff not only disrupts business, but also increases HR costs significantly – especially for senior hires, as staff replacement costs are 25-50 percent of annual salary (but up to 200 percent for senior staff).

In order to combat this problem, firms are spending plenty on “soft” benefits, but it seems that not enough is being done in many cases, and 44 percent think their employees are dissatisfied with their benefits. The benefits provided include the following:

  • 24 percent offer flexible working conditions
  • 41 percent provide health and fitness plans
  • 26 percent offer mentoring programmes
  • 42 percent provide staff with overseas assignments as part of career development plans
  • 51 percent offer individual career development plans
  • 83 percent of companies provide their employees with health insurance

To view the entire article at its original location click on the title of this post.

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