Europe Leads All Regions for Workforce Stability



In 2013, worldwide employee turnover (including both voluntary and involuntary departures) was stable throughout the year across the technology sector — averaging 18.5%. Digging deeper into this result, we observe a similar trend for voluntary turnover, which held close to an average rate of 11.3% over the same timeframe. One could argue turnover rates inched up slightly during the year, but in comparison to the ups and downs of the recession years, 2013 was a remarkably consistent year on a global basis.

While global trends may be somewhat yawn-inducing these days, the turnover story is far more nuanced on a regional level. Latin American countries lead the globe in workforce turnover, whereas European nations lag far behind the global average. For those responsible for workforce deployment and compensation strategies, the implications are significant.

In Europe, for example, low voluntary turnover rates mean a lack of workforce departures could eventually impede upon the hiring of the next generation of employees, result in over-leveling of employees into increasingly packed senior roles, and generate increased labor costs due to employees maxing out pay within their respective salary ranges.

On a positive note, European firms or business units will likely feel more confident in their ability to retain key employees, and will likely face lower overall talent recruitment/training costs.

Looking ahead to 2014, turnover sentiment is generally consistent with the stable trends cited above; with more than one third of companies confident they can retain key employees in the year ahead. Of course, this feeling is not universal, and one in five companies globally are either concerned or very concerned about employees leaving their companies. These fears are typically most acute in highly competitive industries or regions (e.g., software firms in places like Silicon Valley and key technology hubs in Western Europe, the Nordics, Eastern Europe and the Middle East).

Among companies tracking the reasons why employees leave their posts, the primary drivers for turnover are improved compensation opportunities and career advancement. Approximately 50% of companies also cited plans to change careers and/or attend school as a reason why workers leave. These observations highlight the importance of solid retention programs – ranging from pay to recognition to training – to help reduce turnover rates.

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