What is employee turnover?
Employee turnover is the outflow of people from a business and is usually expressed by the proportion of employees who leave within a specific timescale. This is typically measured annually but can also be monthly or quarterly.
Turnover includes both voluntary and involuntary leave (such as an employee leaving due to personal reasons, for a new employment opportunity, or retirement) and those whose employment has been terminated due to poor performance or behaviour, or redundancies.
Benefits of a low employee turnover rate
A low employee turnover rate can:
Increase stability
When employees stay with a company for a long time, it leads to stability and continuity within the organisation.
Reduce costs
High employee turnover can be costly as it requires resources to recruit and train new employees. With a low turnover, these costs are reduced.
Enhance reputation
A low turnover rate can boost your employer brand making it easier to attract and retain top talent.
Increase morale
When employees see their colleagues are happy and content with their jobs, it can boost morale and job satisfaction.
How to reduce a high turnover rate
Every company will have some degree of turnover and the optimum levels will vary from business to business and sector to sector.
If your employee turnover rate is high for a long period of time and uninfluenced by the changing market, you need to consider internal factors that may be affecting your retention rate.
Here are some ways you can reduce high turnover:
Hire the right people for the job, first time!
This may sound like an obvious tip, but many businesses struggle with this, especially when they need to find staff quickly to minimise impact on existing employees and projects. This has become even more challenging in recent years as the lack of available talent on the market means organisations are having to streamline their recruitment process to secure professionals – giving them less time to thoroughly assess suitability and fit.
It is vital that even a streamlined recruitment process is effective. Having an initial telephone interview can quickly reduce your longlist into a shortlist of those who meet the minimum requirements. Following this up with a virtual interview is a great way to assess a candidate’s suitability, and virtual interviews are more convenient - and quicker - to plan and organise.
Ensuring all job adverts accurately describe the role requirements, as well as the company culture, benefits and rewards, and salary on offer, is another way to attract the right applicants. And be sure all hiring managers have the interview skills needed to effectively assess candidates – jobseekers are provided with many tools and techniques for interviewing, but hiring managers are often left to fend for themselves. Successful interviewing requires proper training to know how to ask the right questions.
Closely monitor employee satisfaction
Employee satisfaction and engagement are essential to the success of any organisation. To raise employee satisfaction, organisations should treat employees with respect, recognise their effort and achievements, encourage autonomy to inspire greater fulfilment in their role, clearly outline expectations, and provide suitable training and development to ensure growth.
To achieve this, organisations need to be willing to ask for employee feedback at regular intervals – and act upon it. For more information on how to improve employee satisfaction in your organisation, download our free guide ‘Employee satisfaction: building a happier workforce’.
Be vigilant with toxic workplace practices and employees
You may have heard the phrase ‘people don’t leave bad jobs, they leave bad managers’. Well, the same can be said for toxic employees and practices. Does your company have a blame culture? Is there a lack of openness and trust? Are employees not given the support they need to grow? All of these can indicate a toxic workplace culture and if not addressed, can lead to an increase in turnover.
Offer a competitive salary and benefits package
In today’s climate – where candidates are scarce, and the cost of living is high – offering a competitive remuneration package is essential to retaining staff. While there are many factors that motivate people at work, most work for the money – and when times are hard, they will look to their employer to support them. If you are failing to properly compensate your employees with a comfortable wage and meaningful benefits, you may find more people leaving and looking elsewhere.
Reed’s 2023 salary guides are a great tool for effectively benchmarking salaries against the regional average, covering 14 sectors from accountancy and finance, to technology and human resources.
Conduct exit interviews
Exit interviews are a valuable tool for reducing employee turnover by providing employers with valuable feedback and insight into why staff are leaving the company. By actively listening to the reasons behind an employee's departure and addressing any underlying issues, employers can identify patterns and make changes to improve employee satisfaction, retain top talent, and reduce future turnover.
Take time to invest in your employees, consider the reasons why people are leaving, and put steps in place to make sure your organisation is a positive workplace. A high employee turnover leads to increased costs in recruiting and training, decreased productivity, and reduced morale. It also results in the loss of both valuable knowledge and time as new hires learn the ropes and integrate into the company culture. It can reflect poorly on your organisation too, making it harder to attract talented professionals. Combined, all these factors can negatively impact your company's bottom line, making it essential to strive for a lower turnover rate.
Are you looking for a talented professional to join your team, get in touch with one of our specialist consultants today.
