Employee Turnover Definition
Employee turnover, in simpler words, is the percentage of employees who leave the organisation in a particular time frame. This helps employers and HR managers to understand the effectiveness of their hiring policy, loopholes in work culture, career progression opportunities and more.
Every business has to deal with employee turnover. When a number of employees leave at the same time, it can hurt the entire business in several ways.
As an employer, you will also want your employees to leave as late as possible. So, let’s dive in to understand everything about it and explore how you can reduce employee turnover effortlessly in your organisation.
Here, we will discover:
Understanding Employee Turnover Meaning
Employee turnover is the total number of employees who leave an organisation in a specific period. Having a tab on employee turnover rate is crucial for every business, both small and large. It helps employers and HRs get a sneak peek into the areas they are lacking to keep their employees happy and satisfied.
Why Employee Turnover Rate Matters?
A low employee turnover rate is a dream for every business. Look at some of the top reasons why your company should also have a low employee turnover rate:
Reduced Expense
The expense to run your business automatically cuts down when your annual employee turnover rate is low. When employees do not leave, you will not have to invest a large amount of time and cost to hire new people. This, in turn, will help you maintain workforce productivity and engagement effectively.
Consistency in Production
Also, when all your employees are working with utmost engagement and interest, your production will be more optimised, continuous, and accurate.
Stronger Customer Relationships
Employees who work with a firm for a long period of time get well-versed with their customer needs. Customers, on the other hand, will also feel more connected with the same faces. New hires may need some time to understand the pulse of the clients and build a strong relationship with them.
Higher Morale
There are often stronger bonds between teams that work together. Teams don’t have to take on extra work or worry about when open jobs will be filled when turnover is low. This makes the employees happier.
Types of Employee Turnover
To find and fix possible problems, it’s important to understand the different types of employee turnover.
There are four main types of employee turnover:
Voluntary Turnover
This happens when an employee chooses to leave the company on their own. The employee can choose to leave the company without any outside sources putting pressure on them to do so.
Involuntary Turnover
People are fired or asked to leave their jobs for a variety of reasons that can’t always be named. This is called involuntary turnover.
Desirable Turnover
When a company fires or loses inefficient people new ones take their place, this is called desirable turnover. A lot of employees might not like this process, but it needs to be done in order to keep the organisation moving forward.
Undesirable Turnover
This means when a company loses its best employees. Some people have a bigger effect than others, and it’s hard to find someone to replace them.
5 Effects of Employee Turnover
Losing Skills and Experience
Losing talented employees means losing their knowledge and experience. Your replacement wouldn’t know as much about your firm and how it works.
Cost of New Hires
The replacement may cost a lot of money, and if you recruit constantly, you’re losing money on advertising.
Reputation Suffers
Gone are the days when employees worked with any company. Today, even candidates research the company and their track record. No employee will ever want to work with a company that has a high employee turnover rate.
Demotivated Workforce
Employees find it hard to see coworkers go for fresh possibilities. It undermines team confidence since members don’t see the benefit in building short-term buddies.
Reduced Productivity
All the pointers will eventually affect the overall efficiency of your company. This, in turn, will impact the bottom line of your business as well.
5 Ways to Reduce Employee Turnover
Keep in Touch
Collaboration is the key. You should keep in touch with your employees. This will help you to identify when an employee behaves differently.
Use Technology
Use tools like HROne to get real-time insights into the performance and engagement of your employees and keep improving.
Engagement Activities
Think of something other than “Fun Friday”. Ask employees and know what they are interested in. Go on a mini trip or do some engaging activities to bring out their happiest selves.
Recognitions
Appreciate and recognize employees for their hard work. This will help them feel considered and valued.
Take Precautionary Steps
If you see an employee being inefficient or disengaged for a long time, do not wait and take immediate actions to address the issues they may be facing.
That is all about employee turnover you must be aware of.
That’s how you can keep your employees engaged and fulfilled for a lower turnover. You may also want to leverage HROne HR software at various touchpoints in the employee lifecycle. It will gather the data and help you understand better what’s increasing or decreasing the employee turnover. Get in touch with the HROne to learn more!