Hiring new staff is no longer as simple or inexpensive as it once was. The market for exceptional employees is more competitive than ever. Finding ways to keep top talent and reduce employee turnover may be an even greater problem for HR departments.

What is Employee Turnover?

Employee turnover, also known as employee turnover rate, is the number of employees who leave a company at a given time, usually a year. While the total number of people that leave is commonly measured, turnover can also refer to subcategories within an organization, such as individual departments or demographic groupings.
According to the 2018 Retention Report: Truth and Trends in Turnover, around 42 million U.S. employees- or more than one in every four workers- quit their positions each year to work for another organization.

Voluntary vs. Involuntary Turnover

Any scenario in which an employee deliberately chooses to leave is referred to as voluntary turnover. This might occur as a result of better career possibilities elsewhere, workplace conflict, disengagement, and other factors. 

Involuntary turnover occurs when an employer decides to fire or permanently remove an employee from a group for a variety of reasons, including poor performance, toxic behavior, among other factors.

Remember that if you’re measuring turnover inside a specific team or department, turnover doesn’t have to refer to employees leaving the company — just the group you’re looking at.

Causes of Employee Turnover

Employers would have kept more than three-quarters of those who quit (77 percent). These types of turnover patterns are forcing many firms and managers to improve their game when it comes to employee retention. These businesses want to avoid the high costs of turnover by improving retention.

But why do the employees leave in the first place? Here are a few common reasons:

1. Lack of opportunity for growth or career development

2. Natural career progression

3. Internal promotion or transfer  

4. Feeling overworked/burnout

5. Negative feelings towards boss or management

6. Toxic work environment

7. Family or life event

8. Competitive offer

9. Lack of work-life balance

10. Involuntary departure

How to Reduce Employee Turnover

According to the most recent Employee Tenure Summary from the Bureau of Labor Statistics, employees stay with their employers for an average of 4.2 years. 

Given that a new worker can take up to two years to properly integrate into their role, companies can only expect two years of full production from any new hire. Employers can, however, take initiatives to encourage employees to stay longer than the typical 4.2 years.

1. Recruit the Right People

Improving the company’s hiring practices is one of the finest ways to boost overall retention rates. Employers should seek out people that not only possess the requisite skills but also fit the organization. Employers should create a strong employer brand that reflects the corporate culture.

2. Maintain Competitive Salaries and Benefits

According to a recent Glassdoor survey, 57 percent of respondents consider income and benefits to be the most important criteria in selecting whether or not to accept a job offer. 

As a result, reevaluating your wage and benefits package regularly will assist you not only recruit top performers but also reduce employee turnover.

3. Recognize and Reward Employees

Employees are more likely to stay with a company if they are recognized frequently, according to a new Gallup study of over 4 million employees. Employee appreciation appears to enhance productivity, workplace safety, and employee engagement, in addition to retention.

4. Remove Toxicity from Workplace

Toxic individuals can devastate company morale and cause even the most devoted employees to look for work elsewhere. Employees who either contribute to a poisonous workplace environment or fail to achieve the company’s objectives should be let go.

5. Promote Development and Growth

Employees place a high emphasis on advancement chances. A Cornerstone poll found a strong link between a lack of development opportunities and a high likelihood of turnover. You are not investing in your people if you do not develop them.

6. Promote Work-Life Balance

Employees today want a flexible work/life balance. This has a direct impact on retention. In fact, according to a Boston College Center for Work & Family study, flexible work arrangements had a favorable influence on retention for 76 percent of managers and 80 percent of employees.

All managers and businesses should understand why their people join, remain, and leave. Employee retention tactics that work must be based on a thorough understanding of the requirements and expectations of employees. This means that managers and executives should ask for feedback in a way that elicits the truth. 

Understanding the factors that contribute to employee turnover can assist firms in making the required adjustments to keep their workforce at the appropriate level.