How to Get A Grip On Employee Turnover

It is only natural that organizations lose employees from time to time. People want to further their studies, travel, retire, or find a job elsewhere that suits their desires, which is okay. However, companies must evaluate their processes when the employee turnover rate becomes undesirable or high. 

An inability to retain knowledgeable and experienced employees significantly affects the organization's growth. Hence, a high churn rate begs a critical question: how can you get a grip on employee turnover? Fortunately, that's what this article seeks to answer. 

But first, let's start go into detail on what exactly employee turnover is. 

What Is Employee Turnover? 

Employee turnover or turnover rate is the percentage of employees who take a leave from an organization in a particular time frame, typically within a year. It is the number of employees that quit an organization against the total workforce. 

It includes those who left voluntarily, i.e., voluntary turnover, and those who were sacked, i.e., involuntary turnover. 

What's the Difference Between Desirable and Undesirable Employee Turnover?

Employee turnover is divided into two main categories: 

• Desirable
• Undesirable 

If a team member with low performance leaves an organization, it is called desirable employee turnover. In this case, the decision typically comes from the employer. Desired employee turnover allows the company to replace slacking employees with high performers, significantly improving its growth and profitability. 

In contrast, an undesirable turnover occurs when a highly skilled and well-performing worker leaves an organization. This form is tagged undesirable because employers would rather have that worker on board. These turnovers can be costly to the organization since valuable skills are lost. 

How to Calculate Employee Turnover

Before taking steps against undesirable turnover rates in your organization, you should measure employee turnover. You can calculate turnover by dividing the number of employees leaving by the total workforce, including the employees leaving. Here is an example: 

If 40 out of 500 employees leave in a year, the employee turnover rate is 40/500 × 100, which is 8% 

What Does A Good Employee Turnover Rate Look Like? 

In the thick of the pandemic, there was a considerable rise in turnover rates, which has blurred the benchmark for employee churn. Regardless, it is still reasonable to estimate what an acceptable rate should look like based on what’s obtainable in your industry. For example, in retail, churn occurs at about 11.4% a year, while in tech it is about 12.9%.

While it is difficult to objectively state what is good or bad churn, there are noteworthy points when assessing your organization's turnover. For instance, a rate of 10% is considered good if it primarily consists of desirable turnovers. Meanwhile, a rate of just 5% can be disastrous for an organization if the workers leaving are highly experienced and difficult to replace.

What Causes Undesired Employee Turnover? 

Several factors influence undesired turnover. Here are some reasons why your organization might be losing valuable employees: 

• Poor working conditions: This is often due to there being an insufficient number of off days, uncomfortable office environments, and poor pay

• Dissatisfied with their work: If the organization's working terms and conditions are inadequate, it can make well-performing team members dissatisfied. 

• Poor communication in the workplace: When employees receive little or no feedback and appreciation, they often feel underappreciated and undervalued. 

• Lack of promotion or development opportunities: Highly skilled professionals often avoid environments that do not promote growth. They quickly leave for workplaces that offer development opportunities. 

• Excessive work pressure: Employees are typically motivated to work when they don't feel like they are on a non-stop treadmill. Workers fare better in low-stress environments.

Besides the reasons above, employee satisfaction contributes significantly to whether they leave or stay. Consequently, you should regularly monitor this metric with a reliable means of measurement.

What Are the Cost of Employee Turnover?

It is difficult to pinpoint how much worker attrition costs companies. However, several losses accompany turnovers, including the cost of employing new ones. Other expenditures include advertising, onboarding, training of fresh hires, and the productivity lost during the onboarding process. 

How to Prevent Employee Turnover 

Undesired employee turnover can be dreadful; however, you can limit the rate considerably. The more satisfied employees are with their work and you as an employer, the less likely they will leave the organization. On that note, here are five brief steps to curb undesired employee turnover in your business: 

• Offer well-paying working conditions.

Low pay and other unwelcoming working conditions can cause valuable team members to quit. With competitive pay structures, team member retention rates soar.

• Communicate properly with workers 

Employees like to feel heard, and serving as an audience willing to listen and respond appropriately is one way to do that. Show genuine interest in your employees and ask for their opinions often. Uncover the ways internal communication can push your company forward. 

• Focus on team-building activities

Creating a great camaraderie among team players is a great way to make employees feel at home. This is especially true for frontline employees. The more attuned employees are to themselves, the more likely they will remain in the workplace.

• Encourage development

Most employees are eager to rise in position and progress along their career paths. Therefore offering an opportunity for them to do so goes a long way. By providing a dependable avenue for employees to further their growth, you create an environment they won’t mind staying in. 

• Show appreciation and give feedback

Employees often feel overlooked, particularly the ones who man the frontline. Incorporating a practice of  showing appreciation and giving positive feedback is essential. This management strategy will motivate them to be more productive. 

Bottom Line 

Turnover is inevitable. However, there are various ways an employer can curb undesired employee turnover. With the proper systems, companies can create environments with willing workers who push up your bottom line.