The rate of voluntary resignations from Australian companies has risen to over 12%, according to the Australian Institute of Management’s latest instalment of its national salary survey.
At the same time, the average rate of salary increases monitored by the survey declined by 0.3%, which survey author Matt Drinan says reflects the wider state of the Australian economy.
The AIM survey looked at more than 300 job profiles across 458 organisations during February and March.
It found the average rate of voluntary resignations increased from 11.7% to 12.2% in the past 12 months. For the same period, the rate of salary increases declined from 3.6% to 3.3%.
Drinan told SmartCompany the lower rate of salary increases indicate the labour market in Australia is “softening”, which is consistent with other economic indicators such as low interest rates, but workers are still moving between jobs, with voluntary resignations on the rise.
But Drinan says there is not necessarily a causal relationship between the two factors.
“Pay is still an important factor in why people move around, but in the current environment everyone is in the same boat,” says Drinan.
“It shows how important it is to keep staff engaged,” he says. “Businesses need to be creative in looking at how they pay people. Things like bonus schemes or incentives can be a win-win for the organisation and employee.”
Drinan recommends companies consider the other benefits they can offer to retain employees, with looking for a “new challenge” nominated as the top reason for leaving a company by survey respondents.
Close to 80% of respondents said looking for a “new challenge” was the main reason behind voluntary resignations, followed by limited career advancement and insufficient pay. Other reasons nominated included conflict between staff or managers and lack of training opportunities.
Drinan says employers of choice are those companies that offer their staff training opportunities and flexibility, especially for older workers.
This year’s survey found the number of organisations changing their policies to adapt to older workers has risen from 8% to 12%, indicating that employers are changing their ways.
Drinan says employees will also switch workplaces if they are attracted to what a company stands for or believe they will have more say in how things are done. And this works in small businesses’ favour.
“Small businesses are quite well placed in this low wage increase environment,” says Drinan.
“It takes some of the pressure off having to compete with large firms and they have the advantage of employees feeling they can contribute more to the organisation,” he says.