Staff turnover or employee turnover is the percentage of the staff leaving an organization within a specific period, typically within one year. The turnover comes with a hefty price tag.
Employee turnover can cost employers 33% of an employee’s annual salary. It consists of several direct and indirect costs, such as recruitment fees (or in-house recruiters’ time), job ads and decreased productivity. On top of that, you have to consider the time used to train and onboard the new hire again.
High turnover hurts your company’s growth and the morale and productivity of your staff. If employees frequently leave your organisation, people start building the general assumption that your company is not the best place to work. These assumptions may tarnish your organisation’s reputation and scare away potential employees. It is safe to say that high employee turnover can hold you back from sourcing top talents in the future.
What are the leading causes of staff turnover?
Employee turnover can have devastating impacts on staff morale, productivity, and general business growth. If your organisation is experiencing this issue, it would be prudent to look at the root causes.
Some of the most common causes of the staff turnover are:
1. Lack of reward or recognition
No single employee love working hard for minimal reward. The reward doesn’t always necessarily need to be in monetary value. Words of appreciation and a sense of responsibility may mean a lot to your employees. Employees who rarely get appreciation will always be demotivated and will only use your organisation as a stepping stone to pursue better opportunities elsewhere.
2. Poor company culture
Employees spend a lot of their time at work. Therefore it is vital they feel happy and comfortable there. Suppose they feel dissatisfied with the company’s culture and can’t build healthy relationships with their workmates. They are likely to get disengaged, unproductive, and disoriented and leave.
The current candidate driven market makes it challenging to source and hire top talent, so you want to pay extra attention to your organization’s work environment. Toxic culture is a fast track to high turnover.
3. Overwhelming workload and low flexibility
The workload in an organisation can be affected by many factors. For example, you may have picked more businesses, or some employees are off, forcing the remaining staff to work more hours or pick up extra work. The overworked staff may withstand this scenario for a short period, beyond which they will get discouraged and look for other companies for a healthier work-life balance.
4. Lack of growth or development opportunities
Most employees love working in an environment where they can grow their skills or join a better career path. If you don’t offer or prioritise your employees’ career growth and development, they may feel dissatisfied and plan to leave.
5. Poor team dynamics
Organisational managers play a significant role in the daily life of their employees. As a manager, you need to understand the individual traits of your staff and devise the most appropriate problem-solving strategies. While your managerial skills may encourage some, they might discourage others. It’s good to be mindful of the different approaches needed to address issues within the team. Support open communication and foster positive relationships between individual team members.
How can you reduce employee turnover?
If your organisation is experiencing high turnover, all hope is not lost. Fortunately, there are many ways to improve retention.
Hire the right employees
Retaining employees begins with hiring the right people. Identifying the right skills and competencies fit for the role is one thing, but you also want to make sure they fit the company culture. Psychometric assessments, such as personality questionnaires and ability tests as part of the hiring process, can help you predict job performance and better identify the candidates whose values, traits, and behaviours match your company values and the job role.
Psychometric assessments offer a robust, science-backed way of assessing candidates. When used in conjunction with other methods such as structured interviews, assessments can help you improve your employee retention rates through better hiring decisions.
Invest in good onboarding
A well thought out onboarding process can be the difference between new hires feeling overwhelmed or disengaged and thriving in their new work environment. In most cases, a poor onboarding process will leave your new hires feeling bewildered, undervalued and disengaged, leading to low productivity and high turnover rates. A great onboarding process can improve employee retention by as much as 82%!
Listen and effectively respond to your staff
How can you effectively manage and solve employee-related problems without knowing what the problem is and its root cause? You need to get in touch and frequently respond to the issues affecting your employees at the grassroots before they escalate.
Many employees find it challenging to be open and honest with the HR department or business leaders concerning their daily issues. As a good leader, you should create a culture where feedback is embraced. Developing a confidential survey tool that will allow you to check-in and address issues affecting your employees will go a long way in maintaining a happier staff.
Frequently appreciate your staff for a job well done
Employees feel discouraged if their hard work and commitment go unnoticed and unappreciated. The recognition doesn’t necessarily always need to come from top managers. You can cultivate a culture where anyone can pick a colleague they want to praise and post it for others to see. Incentivizing good performance doesn’t hurt the motivation either. If employees see this appreciation, they will remain motivated and engaged.
Show the career path and professional development
Professional development and a clear career path are effective ways to keep your retention rates high. Employees are generally more engaged when they have a clear view of their career at the company they work for and feel less need to look elsewhere to advance their careers.
At least some training budget and the possibility for the staff to attend external training courses will help demonstrate that you care about their professional development. Such developments have, of course, mutual benefits. As you help the employees push through their career path, they gain additional skills and experience that will likely benefit your organisation at a later date.
Allow flexible work-life balance
The pandemic accelerated the emerging trend of remote working. With the great resignation sweeping across workplaces, it’s now more important than ever to challenge the old ways of working and adapt to the new normal of work life.
Remote working became a norm during the pandemic. However, employees still expect the same flexibility in the post-lockdown world. Not every company can adopt the work-from-anywhere mentality. Still, every company can think about the perks they can offer to employees to make their working environment as flexible and enjoyable as possible.
As a business leader or a manager, you may do everything within your reach and still realize some employees choose to leave. But that’s only natural. There will always be that group of people who will land higher-paying jobs, decide to start businesses or want to experience something else for a change.
You can rest easy as long as you have a healthy organisational culture and people are not leaving you because of a lack of respect and growth opportunities. People who have felt appreciated at your company or team can be your best advocates and help you find your new top talent.