Employee turnover is unavoidable. Everyone will one day leave their current role—it’s all part of gaining new experiences and building a great career! The key for organisations is trying to retain talent for as long as possible by giving them plenty of reasons to stay and minimising the reasons to leave.
So to make sure you’re on track to retaining talent for as long as possible, let’s jump into an employee turnover 101—including what it is, the causes, and how to improve…
What is employee turnover?
Employee turnover is the proportion of employees who leave your organisation over a set period (usually measured on a year-on-year basis). So if you have 50 employees and five have left in the past year, then your employee turnover is 10%.
Why is high employee turnover a problem?
Every employee is an investment. It costs time and money to go through the recruitment process (especially if you use a recruitment agency), to onboard your new hire and to train them—not to mention the loss of income while they get up to speed. Researchers have estimated that it costs around 33% of an employee’s salary to replace them.
And then there’s the unquantifiable factors, like the risk of the new hire not being able to fill the shoes of their predecessor, or the disruption it might cause to the delicate balance of your organisational ecosystem.
In short, employee turnover may be one of the most expensive problems your organisation is facing. But, it’s not just about the cash. Organisations should want to look after their people and provide an employee experience that they love purely because they care about them.
Causes of high employee turnover
Research shows that organisations aren’t as familiar with the reasons behind employee turnover as they might think. It turns out there are a few things that are more important to employees than their employers tend to appreciate:
- Sense of belonging: A job is more than just a transaction of time in exchange for money. People want to feel welcome, comfortable and that they’re part of the team.
Having a flexible schedule: Life is often erratic and unstructured, so it’s important that our jobs can accommodate that in some way—whether that’s remote working or shift-swapping.
Feeling valued by their manager: Managers have a huge influence on employees’ happiness. So much so that employees whose managers consistently acknowledge them for good work are 5x more likely to stay.
Feeling valued by the organisation: People need to feel that they matter, that they play an important role in the bigger whole—something that’s evident in the 90% of people who say they’re more likely to stay at an organisation that listens and acts on employee feedback.
Having career development opportunities: We all like to look forwards in anticipation, so if you believe your career path has come to a dead end, then you’ll probably start seeking an alternative route with another organisation. Unsurprisingly, 22% of people have left a company for professional development.
Having caring and trusting teammates: Unsurprisingly, people are at the heart of the employee experience. A strong and supportive team can turn an overwhelming amount of work into an achievable goal. And since employee burnout is responsible for up to 50% of turnover every year, that’s a valuable attribute.
How to reduce employee turnover
Only your people truly know what’s not so sparkling about your employee experience, and the impact that can have on their intent to leave. So, when you’re looking to reduce employee turnover in your organisation, your people have to sit at the very heart of that process and influence the decisions you make. Here’s an easy (but effective!) three-step process for you to follow:
Step one: listen to your people
The true causes of employee turnover are unique to every organisation. Sure, there are some key themes that come up time and time again—like relationships with managers, wellbeing or reward and recognition—but there’s no one-size-fits-all solution. That depends on how your people are feeling.
So make sure you provide enough opportunities for your people to speak up, make sure they’re comfortable doing so, ask the right questions in surveys and listen to what they have to say (even if it’s hard to hear). Without truly listening to what your people have to say, you’ll lack the insights you need to fully understand what’s driving employee turnover in your organisation.
Step two: analyse what your people tell you
Once you’ve listened to the thoughts, concerns, ideas, suggestions and everything in between from your people, look at their feedback both holistically and broken down into smaller pockets, taking the time to follow the threads and understand the root causes.
Start by identifying the key themes that emerge. What issues and concerns seem to pop up more than others? Do this right, and you should end up with at least one answer to the question “why do people leave?”.
Step three: act on what you learn
Then, of course, the most important step is to implement new ideas and strategies that help to improve the issues you identified when gathering your employee feedback. There’s no point in going to all the trouble of investigating your employee turnover if you aren’t prepared to do what’s necessary to make it better.
Make sure you close the feedback loop and keep your people updated on progress. Share some headline feedback results with them, communicate your action plans, and even let them know why you might not be acting on certain pieces of feedback you have received.
Thinking long-term strategies, not short-term solutions
And, as with any challenging and long-term task, it can be wise to lean on a little expert help in your journey. Our team of People Scientists are dedicated to supporting our customers in projects just like this—harnessing the power of employee voice to improve employee experience and organisational performance.
To help you on your employee voice journey and truly gather the insights you need to reduce employee turnover, our People Scientists have pulled together an employee survey question set that’s ready and waiting for you to use. Covering the proven drivers of employee retention to help you uncover turnover hotspots, simply download your copy below!