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The Importance of Retention Strategies
The importance of Employee Retention
Surviving the Great Resignation
In the aftermath of the pandemic, there’s been an increased focus - as well as a record level of investment - on public infrastructure to support our recovery. This has tested the limits of the industry to supply a sufficient workforce capacity and capability to deliver the huge pipeline of work.
It’s no secret the gap between workforce demand and supply has placed an enormous strain across all industries, with demand anticipated to reach unprecedented levels in 2023.
Adding to those challenges is “The Great Resignation”, triggering ‘pandemic epiphanies’ and creating tumultuous employment trends in the wake of the COVID crisis.
So what’s driving this movement - and how can you navigate the current landscape to sustain your organisation and retain top talent?
In our article below, we explore why employees are leaving and provide insights into the changing nature of the workforce.
What is employee retention and why is it important?
Employee retention can be defined as an organisation’s ability to retain its employees over a long term, as well as how proficient they are in maintaining a stable workforce.
Employers need to place retention as a priority because it promotes the health and success of their organisation. Experiencing a high turnover creates a high level of stress, time, and cost of hiring and training a new recruit. Not only can it negatively impact your business, it can also cause challenges including:
- High turnover expenses: Training a new employee is costly. According to a recent study, it’s estimated that replacing an entry level employee costs 50% of their salary. This figure increases when replacing highly skilled workers, such as engineers or construction workers.
- Low productivity and efficiency levels: Replacing a role involves hours of lost productivity due to training. It also takes a long time for a new recruit to reach maximum efficiency levels.
- Lost company knowledge: Specialised industry knowledge can be lost if experienced employees leave without transferring their knowledge to others.
The benefits of employee retention
With the war for talent and the current labour shortage landscape, candidates are spoilt for choice for new roles, especially paired with competitive salaries offered by competing organisations.
By creating a comprehensive employee retention program, organisations can reap the following benefits:
- Increased employee loyalty: Loyalty is improved when employees feel their employer values them. The longer they keep the employee, the less inclined they are to leave as they’ve invested a lot of time and effort in their job. Increased loyalty means more productive and ethical work is produced.
- Highly skilled workforce: When an employee is retained by the company long term, organisations can build a more effective, efficient, and stronger workforce by using their resources to train and develop their existing workers.
- Improved morale: Effective retention strategies can boost morale, which in turn creates a positive and happy workplace. Satisfied employees are more likely to stay and become great advocates for your company.
- Improved company culture: A survey has reported a staggering 72% of workers have cited company culture as an important factor when deciding to work at a company or not. A good company culture can engage and retain their employees, allowing them to feel more connected to their work and their team.
Key skills gap in the public infrastructure sector
For the first time in 48 years, Australia’s unemployment rate fell to just 3.5%. These figures reflect an increasingly tight labour market and a high demand of engaging and retaining employees.
With Australia currently experiencing a record level of investment in infrastructure, peaking at $52 billion in 2023, the overall infrastructure industry will need to rely on a wide range of skills and workers for delivery. Infrastructure is based on four main occupational groups:
- project management professionals
- engineers, scientists, and architects
- structures and civil trades, and
- finishing trades and labour
According to a report from Infrastructure Australia, projections show in 2023 the infrastructure workforce will be 48% short of demand - a deficit of 93,000 people. Shortages will be most prominent across engineering roles, as well as roles that require a high level of technical specialty.
With this in mind, businesses should place a great deal of attention and thought into improving and executing effective retention strategies to retain top talent across the above industries.
The infrastructure sector has been the backbone of the pandemic recovery - and the primary mechanism to create jobs and stimulate economic growth across Australia. This approach has tested the limits of existing capacity and capability of our highly skilled workers, with shortages being felt in the engineering and construction market.
That’s why urgent action is required in order to retain our workforce supply and avoid the risk of compounding shortages already prevalent in the workforce. An effective employee retention program ensures you create the best work experience for your employees - to drive job satisfaction, and ultimately the retention of highly valued top talent.
Stay tuned for more information on creating effective retention strategies.
About CGC Recruitment
CGC Recruitment is a specialist construction, infrastructure, engineering, and architecture recruitment consultancy. We view our clients as our partners and work closely with them to meet their business needs. We work with some of Australia’s largest construction brands through to specialist SMEs and boutique consultants. We have proven experience delivering permanent, contract and retained recruitment solutions, consistently providing the right candidates for the right roles at the right time.
If you have an active role you’d like to discuss or just want to talk to a specialist consultant, please contact us. Alternatively, you can complete our online client form and a member of our team will contact you.