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The Great Resignation means that employee turnover is one of the biggest issues confronting companies today. Unprecedented employee mobility, a lack of available talent in certain industries and fields, and a lack of understanding as to what really drives employee turnover are a combination that’s toxic for organizational success. But your enterprise isn’t helpless when it comes to retaining the talent it needs to stay competitive. By leaning into the new normal and grappling with the actual reasons employees choose to leave organizations, your company can turn employee turnover into a strength rather than a weight on the bottom line.
What is employee turnover?
Employee turnover includes every instance of an employee leaving your company, whether voluntarily or otherwise. This means that turnover encompasses employees resigning, being laid off, or getting fired. Understandably, however, organizations are focused most on voluntary employee turnover and the reasons behind it. These root causes range from a lack of recognition from management, to cultural differences, to a lack of work-life balance and eventual burnout.
Tracking and reducing employee turnover should be a priority for every company. Along with losing talent your organization has spent valuable time and effort acquiring and cultivating comes the additional expense of hiring new workers and the difficulty of finding them. From a reduction in service or product quality to a loss of institutional knowledge, the ways high employee turnover can drag your organization down are nearly endless.
Calculating employee turnover
Employee turnover is calculated by dividing the number of employees to leave a company over a specific period of time, whether monthly or annually, by the average number of employees. Multiply that number by 100 to get the percentage of employee turnover. Employee turnover varies significantly by industry, but in general, an ideal employee turnover rate is below 10%, although the average rate lands closer to 20%.
6 causes of employee turnover and how to address them
The drivers of employee turnover vary from organization to organization — which is why frequently collecting employee feedback is so important — but there are some common causes that have an outsize impact. Here are six of these major drivers, together with strategies you can employ for each.
1. Not enough recognition
Employees who give their all day-in, day-out but rarely or never receive thanks for their efforts aren’t likely to stay with their employer for long. No matter what financial compensation or benefits they receive, a lack of recognition leads to disengagement, a lack of satisfaction, and, ultimately, higher turnover. A real culture of recognition isn’t defined by the number of times a manager says “thank you” — although frequent recognition is important — or the monetary value of rewards given out. Instead, it relies on genuine, specific appreciation that calls out the behavior being recognized and is personalized for the recipient.
Encouraging this approach to recognition across your organization is much simpler with a recognition and reward platform. Whether it’s congratulating a coworker on a personal milestone while working remotely or receiving a batch of reward points you can redeem for a huge range of things you actually want, technology enables effective recognition in the modern workplace.
2. Failure to listen
Every employee has ideas about how their organization could be improved, whether it’s encouraging a different management style or focusing more on employee wellness. But finding team members who are comfortable sharing input honestly is less common, often because leaders appear to disregard their feedback whenever they provide it. If management and HR don’t listen closely when employees speak — or if they fail to act quickly in response to the feedback — team members are likely to feel they don’t have a real voice at the company. If your enterprise doesn’t seem to value their input, why wouldn’t they find a company that will?
The first step to combatting this problem is training leadership on why and how to listen to employee feedback. Once your organization has laid this foundation, it’s time to build easy-to-use, always-on channels for employee feedback, so team members don’t have to rely on catching their manager at the right time or scheduling a meeting with HR. Look to an employee engagement platform with tools for regularly taking the pulse of employees across your company and guiding managers as they build collaborative action plans with their teams.
3. Lack of cultural alignment
Company culture is the bedrock of organizational success, and few things drive employees away more quickly than a culture that doesn’t meet their expectations. Cultural alignment starts with hiring employees who actually match the type of organization you want to build, rather than simply checking off boxes in terms of skills and experience. Developing cultural alignment continues beyond the hiring and onboarding process with continually recognizing positive employee behavior and working to change aspects of your culture that don’t align with your company vision or your organization’s core values.
4. Poor leadership
Poor leadership can be the result of individual actions or problems endemic to your company culture. Hiring empathetic leaders who know to coach rather than micromanage is crucial to improving all employee retention. A good leader should also seek out constructive criticism and hold themselves accountable to that feedback. And they should serve as examples for the entire company, especially when it comes to showing appreciation and establishing a sense of belonging for all employees.
Many employees experience burnout at one time or another, but it should remain the exception rather than the norm. If work-life balance is skewed too much to the former and there’s no relief in sight, team members are bound to seek relief by moving to another company — or by simply quitting and figuring the rest out later. Prioritizing employee wellness with strategic initiatives, offering flexibility in when and where employees work, and ensuring team members’ workloads are appropriate are some of the most effective ways to combat burnout.
6. Lack of opportunities for growth
You wouldn’t hire an employee that didn’t have the drive to grow. So why would a motivated employee want to stay with a company that doesn’t provide opportunities for growth? If you want to keep strong employees at your company, you must give them opportunities for professional development. Take a broad approach to talent development and address everything from establishing clear paths for career advancement to offering continuing education reimbursement and establishing in-house training opportunities. This last option is easier than it may seem thanks to online course offerings and the ability to easily customize and administer learning programs with modern training solutions.
Reduce employee turnover with Achievers
If employee turnover at your organization is higher than you’d like, there’s hope for improvement. The Achievers Experience Platform is your ticket to developing a culture that helps attract the best talent and ensure they want to stay for the long haul. It’s powered by Achievers Recognize and Achievers Listen, which enable a one-two punch of organization-wide, fun recognition and increased employee engagement that will serve as your company’s most powerful tool for boosting retention.