News article

Stingy employers feign dismay

Reporter: Paddy McBride 

With the unemployment rate in Australia running at it's lowest for many years it should be obvious to stingy employers that competition for labour can be fierce, even for the most menial of jobs - but not so. At least, this appears to be the case in our capital cities. In Sydney, Melbourne, Adelaide and even Perth many positions traditionally considered the most poorly paid - in hospitality, the rag trade and production lines, for example, remain unfilled. Furthermore, closer investigation reveals that many who do take up these positions are desperate for work. Typically they're country people, those on working holidays, or students prepared to put up with low pay in return for flexible hours and (their words) 'not having to think too hard'. 

Surely, the financial consequences of a high turnover cannot be lost on employers, even in these industries. The constant advertising and recruitment costs must be huge, let alone the cost of training. Not to mention the 'hidden' costs - i.e. of reduced productivity while learning the job, slow decision-making, breakages and losses due to inexperience - the list goes on. 

A recent survey of employers in these industries found that a majority of employers (68%) considered high staff turnover a 'fact of life' and felt that little could be done to solve the problem. When asked whether they felt that higher hourly rates and/or improved benefits might help to stem the flow, the cry, resounding and overwhelming was 'we can't afford it'. Surely, even the most simple of cost benefit analyses would reveal that an extra $1 or $2 per hour paid to valuable employees would be better than the average of $3,000 plus it costs to replace and train their replacements? 

It appears that this phenomenon is not confined purely to the more menial roles in these industries. Sales and marketing positions, functions and banquets managers, and supervisor/team leader roles in manufacturing and assembly are all notoriously high turnover positions. When asked to explain why this is so, employers maintain 'we can't afford to pay what our competitors in other industries pay'. Is this really the case? A little bit of private research by this reporter revealed that of ten people who have recently resigned from such roles, eight have stayed in the same industry - having gained better money and/or improved conditions in their new jobs. Over half of those interviewed had been in their previous jobs for more than two years. So why couldn't their original employer come to the part on a better deal? Is it stupidity, naiveté, stinginess or plain greed? Certainly one man's loss is another's gain.