Employee Turnover Rate: What It Is And How Can You Reduce It?

Companies like to closely monitor their employee turnover rate since replacing employees can get expensive. When a company decides to replace an employee there are costs both direct and indirect that it must consider. The processes involved consume time, money, or both.

Not to mention the loss of productivity from the time the former employee leaves and the new employee has been fully prepared for their position. Without a recruitment automation system, it becomes hard for some companies to maintain, retain or build relationships with clients which former employees had worked with.

What Affects Employee Turnover Rate?

It depends on factors like wages, benefits, attendance, job performance, workplace environment, and employee morale, etc.

But why people leave their jobs?

That is a very good question.

Over the years, several studies have found that employees leave their jobs because their business did not adopt automation in recruitment and the onboarding process was a nightmare.

I am just joking. See, there are so many reasons for someone to leave their job. It can be because they accept an offer with another organization, they want to relocate to a new region, or they simply might be dealing with personal matters and want to take time off.

Recruitment automation trends or not, when an employee chooses to terminate their employment contract, the employer is usually given a verbal or written notice of their intent to leave the job. This doesn’t necessarily mean that the workplace is incompetent or that the employee is disloyal.

Turnover rate is not all bad news!

I know what your thinking, “Whaaaaat?!”. But hear me out. Even though the turnover rate has a negative reputation as not adopting automation of recruitment process, it is not all that bad for organizations.

For example, desirable turnover is said to take place when an employee whose performance depreciates leaves the company and the replacement is either able to meet expectations or go beyond. It’s referred to as desirable turnover because poor job performance and attendance are costly to the business. Replacing a poor performer with someone who does their job effectively can improve the company’s profitability.

Desirable turnover also occurs when replacement employees, which you hire using a recruitment automation system, bring new talent and skills that give organizations a competitive edge. On the other hand, undesirable turnover is the loss of employees whose performance, skills, and qualifications are valuable for the organization.

How to Control Increasing Turnover

“Turnover happens – about 10% is normal – but if I see turnover creep up, I first look at where it is coming from in the company. Is it all on one team? Then look at that leadership. Is it a certain demographic? Then look at policies that impact them. Knowing where the turnover is happening can give HR and leaders an idea of where to start looking and what action to take. ” said Kelly Loudermilk, Academic Impressions and member of the Forbes Human Resources Council.

Stay Ahead Of The Curve

Providing competitive salaries and benefits not only keeps employees satisfied but when an opportunity arrives for them, their prime concern is not just the overall remuneration. Since there are no strict rules to follow, the employee will choose the better offer in most cases.

But having a good salary and a good workplace environment will work as a strong motivator for employees to dismiss offers that don’t fulfill their professional requirements.

Praise Who You Pay

Employees always find inspiration in appreciation from their bosses and superiors. When employees do something good or beyond expectations, they deserve the due credit. Not only this is an obligation for the company to recognize good workers, but it also works as an incentive for lower-performing employees to step up their game.

It goes without saying that the recognized employees perform thereon with higher morale and confidence.

Catch Up With The Times

Making policies and putting them in place to control the turnover rate of employees is not enough to keep employees on-boarded. To keep the employee turnover rate under control, there should be a constant and consistent effort to understand the issues of the workplace and how the organization can improve.

This doesn’t apply exclusively to the organization but the employees as well since the more comfortable the employees are, the higher productivity and less turnover/retention costs.

Happy? Happy!

“Ask yourself, do our employees feel cared for? And how is our organization showing it? Authentically caring about employees as human beings is the first step in creating a great place to work and is linked to a greater intent to stay.” – Laura Hamill, Limeade.

As pointed out earlier, why would a happy employee leave? Well, they won’t. Turns out that employees would choose to turn down a new, exciting project and even a hefty package based on the work culture and environment. At the end of the day, it’s people you’re dealing with, so it helps to keep humanity intact.

Editor’s Note: Originally published on 17 September 2019 at 6:34 PM. Updated 28 April 2021.