Voluntary termination rate was 18.7% this year, with 5.1 percentage points up compared to 2017, according to the human capital efficiency analysis, PwC Saratoga 2019. A similar trend, but not of the same magnitude, is observed in the case of involuntary termination rate, with 4.1 percentage points up compared to two years ago, to 23.3%, as well as for layoffs, 1.4 percentage points higher to 4.3%.
Almost one third (32.3%) of the individuals who left on their own initiative in 2019 had less than a year in the company, a share higher by 7.3 percentage points than in 2017. About 60% of those who have voluntarily left belong to generation Z (born after 1995).
The average tenure of employees in a company is of 4 years, the most stable being the Y generation or Millenials (born between 1977 and 1994), which in fact represents majority of employees (over 60%) within the analyzed companies.
“The competition between employers has become very strong, in recent years, due to the workforce shortage. As a result, both salaries and benefits or the working environment have become more attractive throughout the market, as companies have improved their job offers and made investments in training and development programs. The opposite is that this competition has increased the fluctuation of the employees and, implicitly, the costs of the employment. The good news is that, overall, the return on human capital, the productivity indicator, has increased by about 10% among the respondents”, says Ionuț Simion, Country Managing Partner, PwC Romania.
The human capital return on investment increased from 1.35 two years ago, to 1.54 in 2019, as a result of both increased consumption and internal optimizations with the help of technology.
Also, another important trend is the amount allocated for training and development programs, which increased by 30% compared to 2017, to 762 euros for one employee.
“Formal education, even in countries with efficient educational systems, is less adapted to the needs of developing digital skills, sophisticated cognitive skills related to emotional and social intelligence. In this context, companies are aware that they need the conversion of employees – “upskilling” – which means the development of new skills, but also a change of attitude, adaptability and continuous learning. Thus, HR departments need to be creative in rethinking jobs and processes, in flexible approach to the concept of human resource, beyond the employment relationship (for example, by encouraging entrepreneurship or using freelance networks, the “uberized” workforce), learning and development programs and support in professional reorientation”, shows Oana Munteanu, Senior manager, People & Organization, PwC Romania.