Voluntary vs Involuntary Staff Turnover – the Covid years!
The relationship between Voluntary and Involuntary Staff Turnover used to be consistent and was directly related to the strength of the economy.
In a good year of economic stability and growth, voluntary turnover would increase while involuntary turnover decreased.
Employees are more confident to enter the employment market looking for their next career opportunity.
In a bad year, the opposite would occur. Voluntary turnover would decrease and people hunkered down, waiting for better times to seek a new job.
Involuntary turnover would increase as more businesses took direct action on staff numbers through forced restructures and/or the need for cost reduction.
In recent years this relationship has become more tenuous
In 2017 we saw a 10.5% increase in voluntary turnover to 16.9% and a 27.8% decrease in Involuntary turnover to 2.6%.
Although the average turnover rate remained stable, these were significant movements in the underlying components of average turnover.
Refer to the following graphs
In 2018 we saw a large movement in involuntary turnover which was a key driver in the national average turnover increasing to 20.5%.
A large movement in voluntary turnover is more commonly matched by a drop in involuntary turnover when an economy is in a growth phase.
Voluntary turnover however, remained steady while involuntary increased significantly which indicates that there was real variability of performance across industry sectors in New Zealand.
In 2019 we saw this trend continue, this time with a drop in both voluntary and involuntary turnover resulting in a 4% decrease in the level of average national staff turnover.
In the first half of 2020 we saw a small decrease in involuntary turnover against the full 2019 year from 3.6% to 3.1%.
From this we expected that the full year would show a significant increase over 2019.
The final figure (see below) was 4.5% which was a 25% increase on 2019.
Although this is significant, 2 key factors have contributed to this lower than expected increase in involuntary turnover.
Firstly, the provision of financial support by the government throughout 2020 slowed the impact of Covid on businesses enabling them to maintain higher staff numbers than expected.
Secondly, many businesses were able to perform well through 2020 again alleviating or delaying the need to reduce staff numbers with some taking on extra staff to respond to demand.
