Academic journal article New Zealand Journal of Employment Relations (Online)

Turnover and Retention in a Tight Labour Market: Reflecting on New Zealand Research

Academic journal article New Zealand Journal of Employment Relations (Online)

Turnover and Retention in a Tight Labour Market: Reflecting on New Zealand Research

Article excerpt


In recent years, New Zealand has experienced a dramatic drop in unemployment and the overall unemployment rate is amongst the lowest in the OECD. The resultant tight labour market has made skills shortages, staff turnover and retention the topic of widespread media reports. Staff turnover and retention has also become a key focus of employers, managers and HRM specialists. This has prompted, as detailed in the article, renewed research interest in staff turnover and retention in New Zealand. Key findings of turnover and retention research are discussed and it is emphasised how age, income levels and (industry and geographical) location are major explanatory factors. It appears less clear how generational differences impact on job attitudes and behaviours. Using case study evidence from New Zealand call centres, it is detailed how employers have reacted to a tighter labour market and a relative small pool of suitable labour. In contrast to the prevailing picture of 'sacrificial' human resource management in international research on call centres, our case study research shows a 'mixed picture'. In some of the organisations researched, managers have experimented with various approaches, including new human resource development strategies, in order to attract and retain skilled and experienced staff.


In the 'War for Talent' book (Michaels et al., 2001), it is suggested that in the current service and knowledge society, the power has shifted from the organisation to employees, who have a growing propensity to shift from job to job. In similar vein, staff retention and turnover have become a major public policy and employer concern in New Zealand in the last five years. This article explores why this is the case, what New Zealand research has found about retention and turnover, and what the reactions of employers have been. Overall, the article points out that the increased managerial interest in employee concerns, employee-focused flexibility and improved pay and employment conditions is in sharp contrast to previous management approaches.

To develop our understanding of staff retention and turnover in New Zealand, we draw on publicly available literature and statistics and in particular, we apply insights obtained through research projects on employment relations changes, adjustments to workplace relationships and organisational performance, gender and call centre employment, and two projects on retention and turnover. While the significant changes to employment relations legislation in the post-1999 period have influenced employer and employee approaches (see Haworth et al., 2006; Rasmussen, 2004; Waldegrave, et al., 2003), we have focused more on labour market trends and specific changes related to retention and turnover in this article.

As we show, employees have started to vote with their feet and the higher level of turnover is fuelled by both 'push' and 'pull' factors. The 'push' factors are related to the search for more interesting work, more training and development, appreciative managers and, sometimes, more money while skills shortages and a strong labour demand provide many 'pull' factors. This retention and turnover scenario is illustrated by our discussion of nursing in the health sector and, in particular, our analysis of employment practices in call centres. The health sector has experienced growing skill shortages since the mid 1990s and this has prompted more aggressive employee reactions, a comprehensive change to bargaining arrangements, processes and outcomes, and re-thinking of managerial strategies (Powell, 2005; North et al., 2005; Rasmussen et al., 2005). In call centres, renowned for their high levels of turnover, we are focussing on emerging employment practices which try to attract and retain experienced staff. As we suggest, New Zealand call centre experiences have always been somewhat at odds with the prevailing image found in the international literature (Hunt, 2004a and 2004b) and this disparity has been further accentuated by the recent tight labour market. …

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