Expats working in Hong Kong experience a very high job turnover rate, which can be a challenge for both employers and employees. This issue of high turnover rate creates pressure on salaries and it follows that employers focus on staff retention strategies. It also highlights the advantages of offering medical insurance to all employees.
The average staff turnover rate across employers in Hong Kong reached 17% in 2012, which is the highest level it has ever been since 2003. This means that a company that has 100 employees will see 17 of those employees leave over the course of a year. Some of the highest turnover rates are in the food and beverage, delivery and shipping, financial and human resources industry. The companies with the highest turnover rate, on average, are those with more than 500 staff.
Having a high turnover rate like this can create a lot of issues. It means that each employee who resigns could cost the company money, because all of the money invested into training and educating them. The company will also need to spend more money on a recruitment campaign to hire a replacement.
A high turnover rate also costs the company a lot of time. This time is lost through advertising, interviews, training and much more. There is also a risk of losing out on team dynamics, productivity and continuity. Of course, one of the biggest losses is something that you really can’t measure – the cost of lost opportunity. These are all of the opportunities that you couldn’t take advantage of because you didn’t have the staff to do the work.
Offering health insurance benefits to employees might be an additional way for companies in Hong Kong to better retain their staff. According to the 2010 Aflac WorkForces Report, almost four in 10 workers who feel that their employers don’t care about their staff are likely to leave their jobs within 12 months. Of those employees who are considering straying, approximately 40% say that a comprehensive benefits package would help to change their minds and convince them that their employers care about them.
Health insurance can also make for happier and more effective employees. There have been scientific studies that have shown that having health insurance has a beneficial effect on the job-related performance and behaviour of employees.
One of the reasons for the high turnover problem in Hong Kong is that employees are willing to change jobs in order to take either additional benefits or a small increase in earnings. Companies should be considering offering the best employee benefits possible so that they can retain their staff. This also may benefit the Company from a taxation point of view. Many industry surveys in Hong Kong are showing that people want extended benefits that include retirement solutions, life cover (Death in Service)and critical illness insurance. If your company can offer this, you may well be able to rise above the high turnover issue.
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