Possible €1.2 billion cost for Irish businesses in post-pandemic talent exodus

Irish businesses are sleepwalking towards a costly talent exodus, with over half (55%) of employees looking to change roles in either the next 6 or 12 months or once the economy has strengthened. That’s according to new research from Personio, the all-in-one HR software solution, which is calling on businesses to prioritise their people as we emerge from the pandemic, or risk paying the price.

The research finds that while six in ten (60%) Irish employers are rightly worried that staff will leave once the job market improves, only just over a fifth (22%) state that talent retention is a priority for their organisation over the next 12 months – suggesting many businesses are leaving themselves vulnerable to huge costs.

In fact, economic analysis reveals that, overall, the cost of additional staff turnover over the next 12 months could amount to an estimated €1.2 billion toll on businesses in Ireland – equating to €4,759 per business – with Irish SMEs alone facing estimated costs of up to €538 million.

Resignation reasons

When it comes to reasons for leaving, the research uncovers a worrying disconnect between Irish employers’ perception of what will encourage their staff to leave and their employees’ reality. Whilst employers are right to believe that a pay freeze or cut (36% HR decision makers vs 22% employees) and a worsening work / life balance (20% HR decision makers vs 23% employees) are key factors that could cause workers to look elsewhere in the near future, they drastically underestimate the pushing power of toxic workplace culture. Almost four times as many employees than HR decision makers consider workplace culture to be a significant push factor (6% HR decision makers vs 23% employees).

For employees looking elsewhere, the top two most influential factors are a lack of career progression opportunities (38%) and appreciation for the work they do (28%). However HR decision makers believe these factors to be less significant, with only 18% and 16% stating lack of career opportunities and appreciation to be push factors in the next 6 months, respectively.

Indicative of a broader disconnect that could be contributing to a lack of loyalty amongst employees, the research also finds that employers believe they have supported teams and managed people strategy better than employees suggest they have. HR decision makers are over 80% more likely than employees to rate their business’s support for career development as ‘good’ (72% HR decision makers vs 39% employees), and more likely to see its support for work / life balance (70% HR decision makers vs 53% employees) and mental / physical wellbeing (68% HR decision makers vs 44% employees) in a positive light.

The cost of productivity losses

The research also found that while large numbers of employers and HR decision makers think that productivity has improved during the pandemic, a similar number think that it has decreased. Four in ten employees (43%) state that the pandemic has made them more productive whilst at work, but over a third state their productivity has fallen (35%). Meanwhile, nearly half (48%) of HR decision makers say they have noticed an increase in employee productivity, whilst (44%) have noticed a decrease due to the pandemic.

Among businesses in Ireland that said they suffered productivity losses over the past 12 months, this is already estimated to have caused a significant drop in economic output of around €7,953 per employee, on average – including €4,709 per employee in medium size businesses, and €3,671 in small businesses. Meanwhile, on a national scale, overall productivity losses are estimated to have cost Irish businesses €1.77 billion.