High Turnover Hurts
Losing an employee can cost a business 1.5 times** the employee's annual salary in recruitment and training costs. And this is a conservative estimate. What's more, each time an employee leaves it creates breakdowns in communication, a dip in productivity, puts strain on other employees to fill the void, and sees years of experience waltzing into the arms of a competitor.
There’s no two ways about it - high employee turnover hurts, and in Hong Kong this problem is particularly acute. An abundance of jobs has led to low unemployment and a fierce battle to recruit and retain good employees. This is clearly reflected in the level of staff churn - at the end of the first half of 2019, employee turnover was 12.7%*. That's more than 1 in 10 employees quitting their job in 6 months alone.
Hong Kong’s employees are regularly on the lookout for something better - hunting for the highest salaries and the best benefits they can track down. Some are even willing to leave their jobs without a firm offer - the 'Naked Resignation' as it's known in Cantonese - confident of securing another job with relative ease.
Because of this, it is now more crucial than ever for businesses to think creatively about how to retain their talent and protect themselves against the negative impacts of high turnover.
Reputation and retention
Perhaps counter-intuitively, while 65%*** of employees say the main reason they look for a new job is higher pay, it’s not their main reason for staying in their current job. 50%*** say they won’t work for a business with a reputation for treating employees badly, even with a pay increase, and would rather stay with a business that offers them better work-life balance, career advancement and benefits.
To this end, businesses in Hong Kong are waking up to offering benefits beyond a monthly pay check and bonuses - from flexible hours, to training and development initiatives.
Health can take the pain away
One of the most common employee benefits offered is health insurance, and for good reason. The price of private healthcare in Hong Kong is the second most expensive in the world, behind only the US. With a GP consultation costing up to HK$1,000 and childbirth HK$100,000 or more, support from businesses to cover these costs is extremely enticing for employees.
Additionally, 72%** of employees say the ability to customise benefits will increase their loyalty; something that, unlike other benefits, group health insurance offers. At Cigna, for instance, we provide tailored group plans with optional wellness benefits to cater to all business sizes and employee preferences. Businesses can offer employees the ability to choose what they want, and in return, cost-effectively boost loyalty.
With today's competitive and challenging business environment, SMEs need to protect their best asset - their employees - but doing this through pay checks isn’t enough. Businesses need to introduce multiple retention strategies to reduce high turnover, of which health insurance is a crucial component.
*Source: Hong Kong Institute of Human Resource Management
**Source: Ranstad.com.hk/ workforce insights
***Source: Hays.com.hk/ why employees stay