Management ill-equipped to handle turnover: report

Retention is a key business issue but turnover rates are increasing across the United States

As turnover rates across the United States continue to rise, retention of key talent is a major business priority for executives, a new report found.

Of the 391 firms interviewed, 73 per cent of them said that employee retention was either an extremely important or a very important business issue.

Employee turnover is a business problem, stated the report by employee retention research and solutions firm TalentKeepers, adding that stemming the loss of talented employees can no longer be viewed as the sole reponsibility of the human resources department.

Unfortunately, companies report that the majority of their managers and supervisors — 89 per cent — range from minimally skilled to only moderately skilled in retaining employees.

“The impact of employee turnover on business performance continues to grow, and the combination of slowing labour force growth and a widening skills gap worsens the situation,” said Fredric Frank, chief executive officer of TalentKeepers.

“With retention rising as a strategic business issue, accountability for retention among senior executives also will grow.”

The study found that turnover rates remained the same for 45 per cent of companies, while 46 per cent reported an increase in turnover rates. Only nine per cent of companies reported a decrease in the past year.

However, as executives look ahead for 2006, 22 per cent predict turnover will fall for their organization and only 33 per cent see turnover increasing. That view is tempered, however, because when asked about their industry as a whole organizations are much less optimistic. Only 5 per cent believe turnover will decrease in 2006 for their respective industries and 44 per cent predict it will be worse.

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