Employee turnover is one of the most crucial HR metrics in 2023, and a part of that is because it is a high-cost problem. Employees leave, which gives no other choice to the company but to find a replacement. Unfortunately, that process could take away a lot of time and money. According to a study from The Society for Human Resource Management (SHRM), it costs a company 6 to 9 months of an employee’s salary to replace them. In this article, we will cover what could be the factors of the turnover and how to try and reduce the employee turnover rate.
Here is an overview of the content in this article:
- What is employee turnover?
- What happens if you have a high turnover rate?
What is employee turnover?
Employee turnover is defined by the number of employees leaving the company. After they go, the company has to find their replacement.
We are measuring it through the employee turnover rate. The formula for it is pretty simple, the number of employees who left the company divided by the average number of employees in a certain period. To present that number in percentages, multiply it by 100.
If you wonder what the difference between employee turnover and employee attrition is, employee attrition is just the process of losing a part of your workforce, and then the process of employee turnover begins when you start to search for a replacement for the reduction. If you look to reduce employee turnover, your goal is also to reduce employee attrition because the two are related.
What happens if you have a high turnover rate?
After calculating your turnover rate, you should ask yourself whether that rate is higher than it should be. But how to evaluate it? Look up average turnover rates in your sector. According to the XpertHR survey in the UK, the occupational group with the highest turnover rate today is Sales & Marketing at 31%.
But don’t wrap your head around the statistics; often, the situation is contextual. For example, there are a lot of positive employee turnover scenarios. Such as; gaining fresh ideas and improving diversity.
Hereafter, we will go through some of the potential factors of your high turnover rate and how to try and decrease it.
Human beings are social by nature. Therefore, they need to nurture everyday relationships and be a part of a community. That is when they can truly thrive. Employees could often feel separated from their company. Maybe they don’t feel like part of your culture or find it challenging to fit in. Often, this problem is ignored, but it is also crucial to employees’ productivity and satisfaction. According to a McKinsey report, well-connected teams see a productivity increase of 20-25%.
How to fix that?
There are a lot of ways to conquer this problem. Firstly, you should evaluate your current communication channels and your employees’ opinions on the relationship with their colleagues. To understand your employee’s needs, you need to have their feedback. That type of survey should be anonymous as it allows your employees to be honest.
Secondly, you could introduce your employees to a new communication channel. Maybe the nature of the problem isn’t on the personal level with their colleagues, but they just find it hard to connect and communicate using your active communication channels.
Our next step
According to Haiilo, companies with a highly engaged workforce are 21% more profitable. But sometimes, it’s hard to change your everyday behavior to be more engaged with your employees. Instead, you can use a tool that enhances company culture and enables two-way communication between the company and the employees.
Jenz makes sure that you regularly keep in contact with your employees and colleagues as it makes you more invested in their private and work life. And on the other side, if employees are regularly informed about the company, it makes them more invested in its work. Using Jenz, you create a culture and a community inside your company that benefits your employees’ productivity. Two-way communication and company culture is key to today’s success.
Many employees could feel like their role in the company is unimportant as they don’t seem to be recognized by their superiors.
According to Achievers, 44% of employees switch jobs because of not getting adequate recognition for their efforts.
Don’t hesitate to give kudos to your employee.
A nice word is a simple gesture, which means a lot to your employees and could ultimately help you reduce employee turnover. For example, you could praise your colleagues and employees in person or through your communication channel.
Jenz allows you to give kudos to your colleagues, and the best part is that it is visible to everyone, and you can see how many times the person has been recognized so far.
There is little doubt that maintaining a healthy, productive workforce is a goal worth striving for—and not one that you ever want to ignore. Bearing these few simple steps in mind, you can make your employees happier, more productive and reduce employee turnover.
We know that getting out of your way to use that approach is sometimes difficult. That is why we developed Jenz as your employee engagement app that will help you optimize that process. Make your employees as satisfied and productive as ever with our support in Jenz.
At the end of the day, the goal is simple; Happy people, profitable companies.