Employee Turnover Rate: What It Is And How Can You Reduce It?
Replacing employees in an organization is quite expensive, and so, many companies usually monitor the turnover rate of their staff closely. Principally, companies consider generally various costs before replacing their employees. Essentially, these costs are either indirect or direct. Replacing employees also involves processes that consume money, time, and at worse, both. Moreover, this process of employee replacement affects productivity between the replacement period and the recruiting and induction period. Usually, new employees take time to settle in well and deliver just like the former employees. Retaining, maintaining, and developing appropriate relationships with clients becomes a difficult task especially when dealing with the former employee’s customers.
Similarly, several factors affect an organization’s employee turnover rate. Essentially, these aspects influence both the employees and employers of particular firms. Benefits, wages, job performance, employee morale, attendance, and workplace environment are some of the critical factors that significantly influence employee turnover.
Factors Causing Happy Employees to Leave
There are several reasons why employees can abandon their jobs. For instance, some employees accept better offers from other companies while others leave because of moving to new areas. Moreover, some employees quit their jobs because they want free time to deal with personal issues that make working infeasible. Usually, employees are obligated to issue a written or verbal notice to the employer in case they intend to end their employment agreement. Nevertheless, employees who quit are not necessarily disloyal or incompetent.
A negative reputation regarding the rate of turnover does not always affect the performance and stability of an organization. For example, there is a desirable type of turnover in an organization, especially if an employee with depreciating productivity quits. In such a situation, the company can appropriately replace the former worker with someone who can meet its anticipation or beyond. Principally, this type of turnover is usually known as desirable because of the costly and poor job performance is replaced with a desirable output. Therefore, companies can improve their productivity by replacing poor performers with competent employees.
Moreover, desirable turnover can also come up when employers replace employees with workers containing new skills and talents to give the entity a competitive edge. Comparatively, undesirable turnover arises when an organization losses employees with exceptional qualifications, skills, and ability, and whose performance is high.
How to Manage Increasing Turnover
Turnover of approximately 10% is considered to be normal. However, if the turnover continues to creep up, employers should find out where it emanates from, particularly within the organization. You should find out if the turnover affects only one team or several. If the effect is on a single team, then the management should assess the leadership of the group. If the turnover arises due to a specific demography, then an evaluation of the impacting policies should be done. Similarly, the HR and other organizational leaders can find an idea of where to initiate their actions by knowing exactly where employee turnover happens.
Staying Ahead of the Curve
Offering employees benefits and salaries ensures their satisfaction. However, employees do not consider the overall remuneration when new opportunities arise. This happens because there are no strict regulations for employees to follow, and therefore, employees will choose the best offer in most instances. A pleasant workplace environment and satisfactory remunerations are strong motivators for employees, and they can help organizations to retain their employees.
Praise Who You Pay
Bosses and superiors in an organization should always motivate their employees because they find inspiration from this appreciation. Besides, employees deserve credit when their productivity exceeds expectations or when they do something exceptional to the organization. This aspect serves both as an incentive to employees whose productivity is low to improve their efficiency. Moreover, companies have an obligation of recognizing and rewarding their employees.
Catch Up With The Times
Keeping employees on board goes beyond just formulating policies and implementing them to regulate the rate of employee turnover. Organizations should always have consistent and constant efforts towards understanding workplace issues and the techniques of improving the organization to control employee turnover. Therefore, ensuring employees are comfortable will result in higher productivity in addition to reducing retention costs and turnover.
Organizational leadership should always figure out if their employees feel involved. The organizations should always find the means of showing employees that they value them. For example, employers should authentically show their employees that they care about them by creating a sound working environment. Employees can quickly turn down exciting and fresh projects with hefty remunerations if the work environment and culture is right.