It has become more important than ever for employers to be able to exert some control over staff turnover. It’s only natural for employees to move on from a business, but a large staff turnover can have a big effect on the organization, therefore managers look to reduce it wherever possible. A study by Employee Benefits News* found that the average employee exit costs 33% of their annual salary. It’s expensive to hire new people it may be hard to find talent that is a good fit for your business and there may be damage to motivation and internal culture if you’re constantly losing people from teams. As well as the time in sourcing and resource. So how do you overcome this situation and find a way through?
What is employee turnover?
To start with the basics, employee turnover is simply the number of people who leave your business within a specific time period. For most types of enterprises, a low employee turnover rate will be preferable, especially in a market where it can be difficult to tap into a fresh supply of enthusiastic and available talent. Sometimes, an employee leaving might be positive for the organization - for example if they had caused a lot of tension internally or just weren’t right for the job - but most of the time it’s something that businesses are keen to avoid.
What does employee turnover look like in reality?
- Voluntary resignations. These are the people who go elsewhere, potentially for any number of different reasons, from better career prospects to simply not enjoying the work.
- Involuntary terminations. Employees who are in breach of their employment terms will find themselves part of turnover figures.
- Redundancies. Sometimes it’s necessary for businesses to streamline and the employees that are made redundant will feature in turnover figures.
If you want to work out your turnover percentage then it’s simple: take the number of workers who left divided by the average number of workers in the company x 100 = turnover percentage. Turnover rates can vary from industry to industry but somewhere around 10% is ideal for non-seasonal businesses.
How can you overcome employee turnover?
- Identify the biggest issues in the business when it comes to keeping employees. For example, are there problems with current management styles, a lack of opportunity to make progress along a career path or too much stress leading to burnout?
- Create more training opportunities. This has been found to reduce employee turnover rates by more than 50%. Training provides a way to occupy workers, help them improve and build confidence in what they’re doing every day.
- Design a more flexible working environment. Flexibility with respect to working hours is a big factor for more than 80% of employees. Especially since the start of the pandemic, worker expectations about how much more flexibly they can do their jobs have risen significantly.
- Make sure you recognize progress and achievement. We all want to know that the people we work for recognize when we are doing a great job. That’s why reward and recognition programmers can be so vital when it comes to reducing employee turnover.
If you’re keen to overcome the challenge of employee turnover, then it’s time to take a good look at the your talent strategy and what you could do to improve your employee experience and retention.
If you would like to talk to Volt, the experts in global talent management needs, get in touch.