Jobs and Skills Australia has just issued an update to its Employers experiences with retention issues report – which focuses on data from the Recruitment Experiences and Outlook Survey.
The new report presents the views and experiences of more than 3,300 employers surveyed between August 2023 and May 2024, and focuses on why staff leave, how that impacts businesses, and what employers are doing to retain staff.
It finds that nearly one in four employers who recently recruited to replace staff reported needing to replace staff at least every six months, with high turnover particularly prevalent in the Accommodation and Food Services (ie tourism and hospitality), Arts and Recreation Services, Transport, Postal and Warehousing, and Agriculture, Forestry and Fishing. Turnover was also higher in lower-skilled occupations such as Labourers and Community and Personal Service Workers. The most common reasons for this ‘regular replacement’ were cited as people leaving for better job opportunities or because of the nature of the job itself.
The impacts of high staff turnover are obviously significant. Employers reported that constant recruitment and the associated cost of onboarding and training new employees were the most significant burdens. For sectors like Construction, productivity and revenue losses were more pronounced, while Retail employers often observed negative impacts on existing staff who had to cover additional workloads. Importantly, only a minority of employers cited job conditions or salaries as the primary reason for turnover, although dissatisfaction with pay was more prevalent for Technicians and Trades Workers, Sales Workers, and Machinery Operators and Drivers.
For the VET sector, the training implications are clear. First, the ongoing need for replacement staff in key industries means a steady demand for skilled entry-level workers. Jobs and Skills Councils and training providers should also be thinking about how to ensure there are enough short, targeted courses that equip learners with foundational and job-ready skills, particularly in roles with high turnover.
VET qualifications also need to reflect the real-world demands of occupations where staff retention is a challenge, by emphasising resilience, soft skills, and managing work expectations as part of course design. Obviously the VET Qualifications Reform work aims to help address both of these issues.
Retention challenges also underscore the need for VET to support employers beyond entry-level skills. Some businesses (13%) are already responding by upskilling staff as a retention strategy, highlighting an opportunity for VET providers to promote customised or in-house training services, especially where employers struggle to attract or retain qualified workers and want to invest in staff development as a strategy to stabilise their workforce.
Sadly, the report also shows that not all employers are proactive about retention. Over a third reported using no specific retention strategies at all. For VET providers and the VET sector, this presents both a challenge and potentially an opportunity. Providers could help employers better understand the value of training in reducing turnover, by offering tailored solutions that include onboarding support, mentoring, and/or units/microcredentials in work-readiness. Jobs and Skills Councils might also be able to use their employer networks to help promote and explain the benefits of training in employee retention.
