Minimizing Employee Turnover: Effective Strategies

Workplace problems may arise when many employees gradually quit. Employee turnover may be normal, but it remains crucial to keep the best ones and maintain a stable team. Else, you'll spend too much time hiring and training new employees. To keep your top talent, take account of how many employees are leaving, find out why, and then try these essential methods.

What Is Employee Turnover?

Employee turnover means how often workers leave a company and get replaced by new ones. It shows the number or percentage of workers who leave a business at a certain time, often a year. In a case where many people gradually leave, there may be problems in the company, such as employees not being happy or the management not doing a good job. On the other hand, it can mean the workers are content and things are going well when too few of them leave.

Turnover can happen because employees want to leave, or the company wants them to leave. Voluntary turnover happens when workers decide to leave because they find better jobs, get burned out, aren't interested in their work anymore, or have conflicts at work. Involuntary turnover happens when the company decides to let a worker go because they're not performing well or they're causing problems.

Employee turnover can cost a lot for companies. By figuring out turnover, companies can see how much money they lose when workers leave, and new ones need to be hired. It helps them see where they can do better, making the company more productive and successful.

Types of Employee Turnover

Different types of employee turnover can affect your business and how well you keep your employees. There are six main types which are the following:

• Voluntary turnover: When an employee decides to quit. This can happen due to finding a better job opportunity, personal reasons, moving away, or simply not liking the job anymore.
• Involuntary turnover: When the company asks an employee to leave because of poor performance, breaking rules, or other reasons.
• Retirement: When an employee stops working and decides to retire.
• Internal transfer: When a good worker gets promoted or moves to another department within the company.
• Functional turnover: When low performers leave because they feel they've reached their limit.
• Dysfunctional turnover: When top workers leave, maybe for better pay or because they didn't get what they wanted from the company.

Turnover can be voluntary or involuntary, and it can be good or bad for the company. For example, it's bad when a good worker leaves (voluntary but undesirable turnover), but it can be considered good when a low performer leaves (voluntary and desirable turnover).

How to Calculate Employee Turnover Rate

Step 1: Count your total employees

Include almost everyone who works for you but leave out temporary workers and those on temporary leave. Adding them in can make your turnover rate look higher than it really is.

Decide on the time period you want to measure, like a year or a quarter. Find out how many people worked for you on average during that time and how many left, even when their job hasn't been filled yet.

For example, you have around 140 workers in the first quarter and 26 of them left during that time, none of whom were temporary or on leave.

Step 2: Do some math

Divide the number of people who left (26) by the average number of workers (140). Multiply the answer by 100 to get the turnover rate.

Considering the sample figures, the equation will look like this:

(26/140) * 100 = 18.57. That means the turnover rate is 18.57%.

This figure tells you that about 18.6% of your employees left during that quarter.

What Causes Employees to Leave Their Jobs?

High turnover can hurt a company, so it's important to understand why employees leave and find ways to keep them happy. The following are the main reasons why people leave their jobs.

• Lack of purpose: Employees want to be part of a company with a clear mission. When a company has a strong culture and clear goals, it keeps employees around because they feel inspired.
• No career growth: Employees will leave when they don't see any future in their current job. Without training or chances to grow, they'll look for better opportunities elsewhere.
• Bad management: On some occasions, it's not the job but the manager that makes people leave. Managers who don't support their team can stress them out and make them want to quit.
• Work-life balance: People prefer jobs that allow them to balance work and life. A job that is too stressful or takes up too much time can drive employees to leave.
• Too much work: Employees get burned out when there's too much work. Some busy times may be normal, but constant overload will push people to want to quit.
• Culture clash: When a company's values don't match the employees', they will choose to leave. A bad work environment or feeling left out can also push them to quit.
• Not feeling appreciated: Employees want to feel valued. They will look for appreciation elsewhere when they feel that their hard work isn’t noticed.
• Low pay: Good pay matters. Employees will leave for better-paying jobs when they’re not paid enough for what they do.

Ways to Reduce Employee Turnover

A great business plan is important, but having the right team to carry it out is more essential. To keep your business running smoothly, you need to hire skilled employees and make sure they stick around. Here are seven tips to help reduce employee turnover:

Flexible work policies

Many employees leave because they find companies with more flexible work options. Consider offering flexible schedules, remote work, job sharing, or compressed workweeks to give your employees more freedom.

Improve manager-employee relationships

Employees who get along with their managers are less likely to leave. Help your managers develop better relationships with their team by having regular one-on-one meetings, providing training for new managers, and setting clear expectations for projects.

Prioritize professional development

Ambitious employees want to keep growing in their careers. Offer orientation and onboarding programs for new hires, training opportunities to improve skills, and clear paths for career advancement.

Implement employee feedback

Don't guess what your employees want—ask them. Conduct stay interviews to find out what they like about their job and company and send out regular employee engagement surveys to gather feedback on how to improve.

Foster team building

People enjoy working with their colleagues, so create opportunities for them to bond. Plan team events, hold regular all-hands meetings to discuss goals, encourage extracurricular groups, and set up a mentorship program.

Strengthen your DEI efforts

Build a diverse, equitable, and inclusive workplace to increase morale and engagement. Support employee resource groups, provide diversity and inclusion training, and use inclusive hiring practices.

Create employee recognition initiatives

Make sure your employees feel appreciated for their hard work. Offer equity compensation, bonuses, and employee appreciation initiatives such as celebrating work anniversaries and team accomplishments.

Employees leaving your company can cause huge problems—it costs a lot of money to find and train new people and can make your company less productive.

To keep your best employees, it's important to pay attention to what's happening in the job market and make your workplace a better environment for everyone. These steps can help you keep your top employees and save money in the long run.