High staff turnover is more important and more of an indicator than you may think. It has negative connotations for your business, but the good news is, it is possible to manage once you know what is causing it. Some things you may be able to control, but others can also be outside of your control.
So, what does high staff turnover mean for your business? It means you are, first and foremost, wasting time. This waste of time translates into a waste of money. The recruitment process does have costs associated with it and to have to repeat this process over and over again, in a short space of time, accumulates to a giant waste of money.
Even if you’re content with your turnover rate, high staff turnover can make you less attractive as an employer, which can be problematic if you’re in a highly specialised industry with a small talent pool. The constant coming and going of employees also impacts negatively on staff morale and hinders your business’s ability to solidify a good company culture.
Clients experience company culture and relate to this unified feeling when dealing with staff members. They are also exposed to this negative undertone with the added frustration of having to deal with trainees as a new point of contact each time. There is a loss of trust and credibility that causes stakeholder relationships to suffer. Overall reputation takes a huge knock in the form of a ripple effect, from staff to customers, to the community, but that is all worst-case scenario.
It is important to note that a degree of turnover is normal and just a cost of doing business. LinkedIn recorded a worldwide average for employee turnover annually as being 10.9%. Some industries naturally have higher turnover rates than others. For example, the hospitality industry that relies heavily on student and part-time work would understandably have a higher turnover rate.
This begs the question, why is my employee turnover rate so high?
- Your staff could be leaving if their salaries are not market-related, they will constantly be job hunting for a more fair salary for their skill set.
- Not having a safe space for your employees to raise concerns. Having an open channel for employees to highlight issues will help them feel valued and more comfortable to communicate openly. This will also help you keep your finger on the pulse, with regards to morale and lingering negativity.
- Employer and employee expectations might not be aligned. This means that both parties were unclear about the responsibilities and details pertaining to the job at hand. This can be a result of poor employee selection which can in some cases be linked back to an unclear and vague job spec.
- Staff might be leaving due to a lack of sufficient progression and growth potential. This might not be any fault of your own if you have a small business with only two organisational levels in the hierarchy, but it is important to keep in mind when analysing your turnover rate.
- Overworking or expecting too much of employees can lead to burnout and can ultimately cause unhappiness. In this case, staff will start to apply to for other jobs and only stay as long as necessary to secure a new job.
Most of these causes can be managed and minimised if you: are aware of them and alter your management styles to manage individuals, be really clear about expectations, appreciate and appropriately compensate your staff with market-related salaries and overtime (if required).