Employee turnover is a major concern that every company, regardless of size, must address.
Whether it’s due to budget cuts or voluntary turnover stemming from dissatisfied employees, if employee turnover becomes a regular occurrence, it can have serious consequences for your company. High turnover can also negatively impact employee engagement, leading to a less motivated and productive workforce.
When your employee turnover rate is high, its effect will be rippled by reduced productivity and increased time spent recruiting, training, and onboarding new employees. High employee turnover can also lead to a decrease in employee morale, which negatively impacts your company’s reputation.
Here at Stratus HR, we can help you combat the detrimental effects of high employee turnover with our advanced turnover tracking technology, expert guidance on retention strategies, and competitive benefits offerings. We empower your business to retain top talent and thrive. Contact us today for a free consultation!
As a business owner, manager, or human resources professional, you need to understand how high turnover impacts your company and how you can remedy the problem.
Losing key employees not only sets you back with time and money spent recruiting, interviewing, hiring, and training a replacement, but it may also impact revenue generated from your client base.
For example, let’s say your best salesperson decides to leave your company due to poor compensation and takes a new position with one of your competitors who offers a higher base salary. Because they have cultivated meaningful relationships with clients they have serviced over time at your organization, these clients may follow the employee to their new company, even if it means switching to your competitor.
This risk is especially detrimental if you do not have a suitable replacement available immediately to take over the departing employee’s responsibilities and keep clients engaged. In the end, high turnover rates impact your ability to generate revenue and can ultimately benefit your competitors.
According to a HubSpot productivity report, businesses in the United States are susceptible to lost productivity costs of up to $1.8 trillion annually.
A negative employee experience can exacerbate productivity losses, as disengaged employees are less likely to perform at their best. Although some departures are unavoidable, losing a large number of experienced employees due to voluntary turnover can have a ripple effect on a business.
The departure of seasoned employees impacts productivity across the organization, especially when vacancies cannot be filled as quickly as you would like. When key employees leave, their responsibilities must be transferred to someone else, which frequently results in a shift in resources and a burden on existing staff. The remaining employees may become overwhelmed with an increased workload, which can raise stress levels and lead to under-satisfactory work.
While your employees struggle to juggle an increased workload, productivity takes a backseat as you try to find and train a replacement. This can be a time-consuming and costly process, adding to the already-existing difficulties of employee turnover.
High turnover can harm your company’s reputation, which is crucial when it comes to attracting top talent. The constant need to recruit and onboard new hires can strain your HR resources and prolong the time it takes to fill vacancies.
If your company is perceived as a revolving door, it may be difficult for your HR department to attract qualified candidates. Potential employees may be hesitant to apply or join your team, which can worsen the issue.
People in general make assumptions about companies with high turnover, from dissatisfaction with the work or management team to having a poor company culture. No matter the assumption, struggling to get quality prospective candidates to apply is an indirect cost related to high turnover problems.
Increased stress caused by high turnover can make your team feel overworked and burned out. Low employee satisfaction can further contribute to high turnover, creating a cycle of disengagement and attrition.
Existing employees may be given additional responsibilities until new employees are hired and up to speed, and even new employees may become disenchanted with the work aura. Overall, this amplifies the downward spiral of poor morale and employees wanting to quit.
Adding to this concern is employees who become increasingly disengaged and demotivated when their best friend at work decides to leave. When this happens, the employee who is left behind typically becomes distracted, inattentive, and questions whether they should look for a new job themselves.
While voluntary turnover often receives much attention, involuntary turnover can also be costly and disruptive.
Involuntary turnover occurs when employees are terminated due to performance issues, downsizing, or other reasons beyond their control. Though necessary at times, involuntary turnover can create a negative atmosphere as it erodes trust among remaining employees and increases the burden on those left behind.
The costs of involuntary turnover may include severance packages, potential legal fees, and the loss of institutional knowledge. Depending on the situation, your company’s reputation may also be at risk, making it harder to attract and retain top talent in the future.
Employee engagement plays a crucial role in reducing high turnover. Engaged employees are more likely to stay with a company, perform at a higher level, and contribute positively to the workplace culture.
Investing in initiatives like recognition programs, professional development opportunities, and open communication channels can significantly reduce employee turnover and improve overall productivity.
Employee turnover is a critical issue that every business should address. If you know that your turnover rate is high for your industry, here are steps you can take to remedy the problem:
Calculate employee turnover regularly to identify trends and root causes of your turnover issues. This may include low-quality benefits, poor compensation, onboarding problems, inflexible hours, poor company culture, manager problems, difficult work life balance, lack of employee recognition, and so on.
Invest in career development programs to provide clear pathways for growth and learning.
Survey employees about their workplace satisfaction. Find out what frustrations they have, what changes they’d like to see the company make, and what makes them tick for motivation.
Implement new initiatives that will make your workplace a more ideal place to work, focusing on employee retention strategies and employee morale.
Foster an environment that prioritizes professional growth and skill enhancement to keep employees actively engaged.
Regularly calculating your turnover rate is essential to understanding whether your retention strategies are working. Comparing turnover rates by department can help identify areas of concern, such as a problematic manager or a department with high stress levels.
When you calculate your turnover rate, you are also able to benchmark yourself against industry standards and set realistic goals for improvement.
For many industries, a good employee turnover rate is a sign of a healthy workplace. Knowing where your company stands can help you make informed decisions about where to focus your efforts.
When you outsource to an HR partner like Stratus HR, you gain access to technology that will track turnover for you. Our system has the ability to drill down to details such as timeframes, seasons, and departments.
You will also benefit from having your own certified HR expert to guide you in developing retention initiatives that boost employee retention. To aid in helping you retain talent, your staff will have access to our competitive employee benefits that make your company a more attractive employer.
To learn more about how Stratus HR can help you lower your high turnover rate, please request a free consultation.