Retaining and nurturing talented individuals is a growing concern for many organisations, and the first step of highlighting the issue can be tricky. But once cleared, an organisation can soon take strides towards truly valuing their talent.
This week Oxford Economics and Unum reported findings from recent research that highlight the true cost of staff turnover to an organisation. Their report shows that the average fee for replacing a departing staff member is £30,614, with the total cost to the UK economy now hitting a startling £4.13bn per year. But how do organisations retain a talented workforce and avoid their purse-strings being stretched too far?
This monumental figure not only highlights the financial incentive for rethinking how to retain key talent, but also the wider productivity implications of ignoring the issue. For many businesses it may at first appear attractive to bring on new talent, but these numbers demonstrate how expensive an exercise that approach can be. A better strategy for embedding long-term value to retain staff within the organisation is needed – businesses need to offer incentives such as training, or perhaps the potential for employees to move to other departments if they’ve outgrown their own. In essence, they need to look beyond the simple employee churn.As well as looking at the immediate financial implications of staff turnover, organisations also need to consider the ‘hidden’ costs to the business in terms of energy and time - in other words, productivity. It is better to plan ahead in order to reap the rewards in the long-term, by committing time and energy in initiatives which invest in developing your people. The risk for many in this strategy is obvious - once trained an employee may look for pastures new to invest their ‘human capital’ - but that's where an understanding of how to leverage human capital becomes paramount.
At the CIPD we recognise the challenge of realising human capital potential, and we’ve launched a project called Valuing your Talent in partnership with CIMA, UKCES, and Investors in People, CMI and the RSA to investigate further. This research programme is designed to help organisations of all sizes to better understand better their human capital, and thus invest in it more strategically. For more information visit Valuing your Talent
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