What Is a High Turnover Rate?
A high turnover rate means that the number of your organization’s employees leaving their job is higher than what’s expected in your industry or niche. Aside from the real financial hit a business takes from high turnover (more on that below), when companies fail to reduce employee turnover, their employee productivity decreases, morale plunges, and innovation suffers.
Before leadership can make changes and take steps to reduce high turnover of staff, it’s important to understand the reasons employees choose to leave. Traditionally, it’s been assumed a high employee turnover rate was the result of unhappiness with pay, benefits, and other financial offerings. Today, it’s understood that other variables like stress, job satisfaction, and work environment are just as big, if not bigger, causes.
Common reasons employees leave their job include:
- Skills mismatch. This is a growing problem and occurs when employees don’t “feel right” in their job.
- Low job satisfaction. If an employee doesn’t feel challenged they’re more likely to disengage and eventually quit.
- Ineffective management. Have you heard the expression “people don’t leave jobs, they leave bosses?” Micromanaging, poor communication skills, and unrealistic expectations are common complaints.
- Few or no growth opportunities. Employees want to know their employer is willing to invest in ongoing professional development. The opportunity to advance if desired is vital to many employees.
- Workplace conflict often leads to increased absenteeism, decreased engagement, and turnover. Some conflict is inevitable but getting chronic conflict under control is paramount to your company’s success.
- Poor work-life balance. Employees need to know management will support and help them in any struggle with meeting work and home obligations.
- Feeling unappreciated. Nearly 70% of employees say they would quit their job if they felt unappreciated. The importance of consistent, authentic acknowledgment and recognition of good work is essential to employee engagement.
Importance of Lowering Employee Turnover
Is there a link between working to improve employee engagement and retention and reducing employee turnover? Yes. And the advantages to finding ways to reduce employee turnover are immense.
- Productivity improves.
- Costs are reduced.
- Customer experience is enhanced.
- Employee morale is higher.
To gain the benefits of reducing employee turnover, it’s also important to educate management on what the financial costs are to your organization.
Cost of Employee Turnover
Along with intangibles like greater productivity, morale, and customer experience, there are real financial hits your organization takes as a result of high employee turnover. What Gallup calls a “fixable problem” costs U.S. businesses $1 trillion per year, with the cost of replacing one exiting employee ranging from one-half to two-times the employee’s annual salary.
Costs include off-boarding the employee, recruiting and hiring a replacement, transitioning the new employee, and alleviating productivity disruption. The loss of an experienced employee also means a loss of the knowledge and expertise they developed while in your employ. Getting a new employee up to the same level of familiarity with your organization’s processes takes precious time. Finally, the decreased productivity and poor morale that results from high turnover affects company performance, which ultimately affects its overall profit.
There are a number of metrics and calculations you can use to see how employee turnover is affecting your business. Regularly monitoring these numbers can help you stay on track in your efforts to reduce employee turnover.
Best Ways to Tackle Employee Turnover
The list of reasons for why employees leave makes it clear that employee engagement and retention go hand-in-hand. Providing challenges for employees has many positive outcomes, including reducing employee turnover.
Some popular methods for tackling employee turnover and creating a culture of engagement include:
- Increased flexibility in the workplace. This contributes to a better work-life balance and lets employees know you value their personal needs.
- Recognition and appreciation. Positive feedback on employee achievements goes a long way in increasing job satisfaction and reducing turnover. How do we know? Because employees say so!
- Ingrained transparency creates a bond of trust between employer and employee. Employees encouraged to contribute and collaborate on important organizational goals are more engaged and motivated to succeed.
- Foster teamwork because people who connect are more likely to want to continue to work together.
- Finding meaning. Together with flexibility and a work-life balance, employees say work with a purpose is one of their top three priorities. Many say they’d be willing to take a pay cut if it meant they could do more meaningful work. Helping employees find their purpose gives you a competitive advantage and makes employees more likely to stay.
- Activities, initiatives, and incentives. Employee initiatives and internal goals can work to boost team morale, show appreciation, and increase employee happiness. Gamification software is an ideal way to improve employee engagement and reduce employee turnover.
Whether it’s training and onboarding, enhancing job performance, or boosting employee communication and collaboration, gamification as part of an overall employee retention strategy helps improve motivation, engagement, and job satisfaction. It also promotes teamwork through shared success, encourages the adoption of best practices across your employee network, and gives employees control over their learning experiences.
High employee turnover hurts employees and your organization’s bottom line. The solution is simple: if you want employees to stick around, you must show them why they should. Want them to engage? Give them something to engage with. But though it may be a simple solution, it’s not an easy task. Gamification makes the challenges easier to overcome.
BeeLiked offers customizable gamification solutions that can help you reduce employee turnover and improve productivity and engagement while giving employees the recognition and appreciation they crave. Get in touch with us today to set up a no-obligation discovery call and to learn more.