Predictive AI can identify staff thinking of quitting

Kiwi companies will soon be able to use AI to identify employees who are thinking about resigning, according to an industry expert.

The technology will allow managers to anticipate career movements in their workforce before they happen and proactively approach staff to address any issues they have.

Latest Government figures show around 21 percent of New Zealanders switch jobs annually. Research also shows the cost of replacing a staff member is 50 percent to 200 percent of their annual salary which represents an annual cost to businesses of over $18.5 billion.

Sharon Davies (pictured), managing director of recruitment marketing agency Talent Propeller, says while AI can be associated with job insecurity, international experience shows it can play a crucial role in employee retention and workforce planning.

She says her firm is in discussions with developers of the technology to investigate how it could be implemented within New Zealand workplaces.

“Too often in the workplace managers are blindsided by the unexpected loss of key staff.

“This is a multi-billion-dollar problem for Kiwi businesses and according to new Government research[1], the rate of staff transition has increased since the pandemic – as increasing numbers of employees become disillusioned with their career path and seek change.

“What we have learned during this time is that skillsets are more transferable between industries than first thought and that many people have taken the opportunity to move to more stable roles or to improve their employment situation in a tight labour market.

“Globally more firms are turning to AI to help reduce this churn and with New Zealand’s workforce in international demand, there is a role for technology in helping to reduce the loss of our workforce to greener pastures offshore.

“Companies measure attrition as a total figure, that is ‘we have 30 percent turnover rate’ but the ability to produce a more granular analysis that can inform managers which specific divisions are experiencing higher rates of turnover and detailing it right down to individual employees could make a significant difference in workforce planning,” she says.

Davies says the technology uses machine learning and HR data to predict staff that are at risk of turnover by customising algorithms to individual organisations that can learn common patterns and triggers that lead to a staff member leaving the firm.

She says data is inputted into the software from a number of sources to identify the causes of staff attrition but also the reasons employees stay with the company.

“We know that workers will switch careers for a wide variety of reasons. The traditional way of measuring this has been with employment satisfaction surveys.

“These rely on an individual personally inputting their perceptions which can be somewhat skewed.

“AI is able to take a deeper dive into this and can more quickly identify employees at higher risk of resignation by giving each an expected longevity rating and allowing the organisation to put in place definitive retention or recruitment strategies to mitigate disaster, which can come in the form of a mass exodus, strikes the firm.

“This may give managers the opportunity to develop their employment brand and talent bank in areas of high risk as well as incentivising staff retention through promotion, wage increases, training and progression plans.

“The technology is designed to reduce the impact of close-contact bias – where a manager may have formed preconceptions about an employee – which can limit their potential career growth.

“It can also give management greater clarity over the outcomes of different actions – such as if you increase an individual’s salary by five percent you will reduce their chance of leaving by X percent,” she says.

Davies says the tech is best suited to organisations with over 250 staff as it requires large amounts of data to build a clear picture of employee intentions.

“When a firm has a high attrition rate, this can often be traced back to problems with workplace culture and engagement.

“The ability to look at this proactively, rather than after the fact, creates an opportunity to instigate internal brand strategies and provides an opening to have direct discussions with specific employers at risk of leaving – potentially months in advance of their resignation.

“These conversations allow the disgruntled employers to talk about how they are feeling and what they want to get out of their role in order to retain them,” she says.