Staff turnover is about the number of staff who leave your business and need replacing in a set amount of time.
You may face low or high staff turnover. This can depend on the industry you’re in, but if you have to replace a lot of employees it can be time-consuming and expensive.
In this guide, we’ll take you through the process of reducing your turnover so you can maintain peak business productivity.
What does high staff turnover mean?
It refers to the percentage of employees leaving a company during a certain period.
It can occur for various reasons. An employee might resign or you may terminate their contract. A 2018 survey revealed the national average staff turnover level is set to be 11% this year.
Average staff turnover levels vary greatly from industry to industry but no business can afford high staff turnover.
High staff turnover reasons
Employees can leave your business due to a number of issues. Some of these you can look to combat, but others happen naturally for reasons out of your control.
Common examples of reasons why staff leave a company include:
- Lack of growth of role progression.
- Excessive workloads.
- Lack of recognition.
- Lack of salary reviews, bonuses, or perks.
- Poor recruitment process leading to bad employee selection.
The effects of high staff turnover include an impact on your annual budget as well as a loss of time and productivity.
Ways to reduce your turnover rate
There are certain strategies you can adopt to combat this problem.
If you reduce your turnover then it can have significant benefits, so it’s good business practice to act to improve employee retention.
Exploring benefits other than an increased salary will help to retain existing staff. The following is a non-exhaustive list of tactics you could consider:
- Invest in your workforce: Offer professional development—it provides your employees with advancement towards career goals and progression within your business.
- Offer rewards: Bonuses and company perks offer staff something to aim towards. These provide employees with something to aim for and look forward to—genuine rewards for their hard work.
- Improve your recruitment process: Be more thorough in how you go about your hiring staff. Define your role clearly, be thorough with skills and knowledge checks, and make sure they fit your company culture.
- Hold regular 1-1s: Providing regular feedback is an excellent way to guide your employee through each working month. But they can also use the opportunity to raise any concerns they may have with your business. This can help you spot any potential issues and rectify them before your employee decides to leave.
- Offer a solid work-life balance: Ensuring your employees enjoy their downtime is important, so you should look to offer perks such as flexible hours. In addition, offer remote work to individuals who can work from home—this can be an occasional or permanent arrangement. But it helps to alleviate stress and allow them to recharge properly.
The cost of high staff turnover
So, how much does this cost your business? It depends on several factors. Calculating your loss is more than recruitment fees. You should also consider:
- Productivity losses.
- Training requirements.
- Job advertising costs.
- Recruitment agency fees.
- Equipment costs.
In Ireland, it now costs around €13,100 to replace an employee in your business. For more specialist roles, this may prove higher.
As such, it’s important to look at ways to reduce high turnover rates. This can significantly help with your budget over the course of each year.
How to calculate staff turnover
Measuring staff turnover can help you to understand its impact on your business.
An annual staff turnover calculation is quite simple to do. You can follow the below formula:
- Add the number of employees at the beginning of a one year period to the number at the end.
- Divide by two—this will provide your average number of employees.
- Divide the number of employees who left your business during the period by the average number of employees.
This will help you find the employee turnover rate for your business. To make it a percentage figure, multiply the turnover rate figure by 100.
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