Employee Turnover – The percentage of employees that leave an organisation during a given period of time
(Note: Employee turnover is not related to the term 'turnover' which means a business' total income.)
To remember what employee turnover means use the following mnemonic:
All the employees turned over (employee turnover) and one fell off the cliff, in effect leaving the company.
Employee turnover is typically measured as a percentage of the total workforce. For example, if 10% of employees leave a company in a year, the employee turnover rate is 10%.
There are two main types of employee turnover: voluntary and involuntary. Voluntary turnover occurs when an employee leaves a company of their own accord. Involuntary turnover occurs when an employee is terminated (fired) by the company.
There are many factors that can attribute to employee turnover, including:
- Salary and benefits: Employees are more likely to stay with a company if they are paid fairly and competitively. They are also more likely to stay if they have access to good benefits, such as health insurance, retirement plans and paid time off.
- Work-life balance: A good work-life balance, meaning the amount of time an employee can spend with their family and friends makes a big impact on whether or not a typical employee is likely to stay with a company.
- Quality of recruitment: Hiring workers who are not qualified or fit for the roles will increase the chances of them either quitting or being terminated later on.
- Company culture: Employees are more likely to stay with a company if they like the company culture. This means that they feel like they belong, that they are valued, and that they are working towards something meaningful.
- Career development opportunities: Employees are more likely to stay with a company if they have opportunities to grow and develop their careers. This means that they have the opportunity to learn new skills, take on new challenges, and advance their positions within the company.
- Managerial support: Employees respond better to managers who are supportive and create a positive work environment. If a manager is approachable, provides constructive feedback and helps employees success, workers are more likely to stay.
By taking steps to reduce employee turnover, businesses can save money, improve productivity, and boost their reputation. It costs a lot of money to train an employee to a high standard, so it’s key to keep employee turnover to a minimum.