How do you actually equate employee turnover in real numbers… well SHRM, the Society for Human Resource Management, have published estimates for replacing employees, taking into account all the costs that are involved.
So let’s say you are an organisation that has a reasonably large workforce all on 8 clams per hour, and you lose approximately 100 employees over the course of the year. That’s 350,000 clams that you’re spending just to keep your employee numbers stable… that’s not even growth of your workforce.
Putting your head in the sand won’t work
If you are not measuring turnover and its related costs, you really should be. Identifying the reasons for employees leaving early on can prevent overly high turnover rates
If your costs are high, you need to figure out who is leaving and why, work out solutions to control it and measure your success over time. Lots of organisations might know there’s a problem with unhappy managers or employees, but their turnover is low, the market is bad and people don’t want to be on the job market. When things pick up and workforces become more mobile… there will always be a place to go for employees who are talented.
Identify, Assess, and Develop
As a starting point you should identify the costs associated with turnover and track this over time. Next, assess and identify the reasons for turnover. Finally, develop action plans to reduce turnover and track their success over time
Exit interviews are common but they don’t always elicit insightful information. They can vary in quality and, let’s face it, people aren’t always honest, particularly if they are being interviewed by someone internally and don’t want to burn any bridges.
It’s generally thought best practice to get someone independent to run either focus groups in areas where there is high turnover, or interviews with employees after they have left. You could also run some quantitative research that provides hard data, and allows you to analyse trends and monitor improvements.
Leaving so soon?
There are lots of reasons why employees might leave an organisation… some of them you have no control over (personal circumstances, desire to learn a new skill/ trade, change in career path etc) but in most cases, turnover is absolutely within the control of the employer.
- You’ll lose people early on if expectations don’t match reality
- Poor line management
- Not feeling valued or recognised for a job well done
- The job itself… lacks challenge, overworked, safe, isn’t important, provides no sense of accomplishment
- Limited career opportunities and uncompetitive compensation and benefits
- Other reasons such as a lack of confidence in leadership, poor internal communications, lack of flexible working options or if employees feel they have been subject to unfair treatment
Now while these are common reasons, they don’t necessarily apply to every organisation. And the important thing is to prioritize and really focus in the areas which are impacting turnover in your company.