For a few years, staff retention was seen as the primary strategic objective of the HR function. Although it is still considered an important objective, it no longer holds the number-one position.
Does this mean that staff turnover has diminished? Or does it mean that employers are looking at the issue from a different perspective, such as increase employee remuneration, and as such, wage inflation becomes the challenge rather than staff turnover. Or have employers come to terms with it and consider it a fact of life to be accepted as it cannot be changed?
I am often asked what is the average staff turnover in this country? My answer is it depends on the economic sector and the employer.
The public sector holds on to most of its employees, even though they complain about staff turnover. A number of private sector employers are happy to hang on to their employees for at least 12 months. Some employers would tell you that they consider staff turnover a positive thing as it brings fresh blood. Others see it as a curse as they lose persons whom they would have trained.
Is there a magic number employers should be aiming for to ensure staff turnover levels are healthy? I had written about this issue last November.
In this week’s contribution I would like to focus on staff turnover and the so-called Generation Z. This is the generation that started to join the workforce some five years ago, and over these five years, have seen the economy grow. Gen Z has never experienced an economic recession, with the exception of the COVID years, and even that was a subdued recession.
A number of generalisations have been made about Gen Z. Like all generalisations, some of them may be wrong, but others are right. What is probably certain is the way Gen Z in Malta looks at a job is very likely to be different to the way Gen Z in other countries looks at a job, and this is primarily due to the economic growth we have experienced.
Long-term financial security may be out of reach for a significant part of them
Economic growth and increased job opportunities have fuelled staff turnover among this cohort. However, in spite of such growth, long-term financial security may be out of reach for a significant part of them. The reasons for this could be various. I will mention just three.
The first is the threat of artificial intelligence (AI). Many wonder whether they will still have a job once AI becomes mainstream. Some of the so-called non-traditional jobs, such as content writing, may disappear with the advent of AI as employers start seeing it as a way of replacing the human person.
The second is the housing prices. Various studies have now shown that getting on to the property ladder is a mirage for a number of young persons as housing has becoming increasingly unaffordable.
The third is the increasing number of non-Maltese workers. Gen Z have already seen low-level jobs being taken up by non-Maltese workers because they are paid low wages. If the trend of importing foreign workers continues at the pace it is happening today, they will start taking over higher-level jobs and edge out Maltese Gen Zs.
If long-term financial security is something to wish for but is unattainable, what is likely to drive Gen Zs to change jobs for reasons other than pay? There can be the usual reasons such as having a job that provides job satisfaction or a job where employee relations are healthy. However, something I have found quite prevalent is their expectation is that their employer invests in helping them build their career.
As such, while an employer could be looking for a person who already has the required skills, today we have persons applying for a job with the expectation that their employer trains them and sets them on a career path. This could well be what may drive staff turnover in future among the younger members of the workforce.