For companies to succeed, they need to cultivate a reliable, skilled workforce. In many cases, organizations put the greatest emphasis on hiring. While choosing the right candidates is undeniably crucial, ensuring that your best and brightest stay on board is often more vital to ongoing success. As a result, managing employee turnover needs to be a priority.
Employee turnover often impacts an organization in several ways, some of which aren’t overly obvious. With that in mind, here’s a look at what employee turnover is and what it means for your business.
What Is Employee Turnover?
Employee turnover is a term that represents the number of workers that leave a company over a particular period. It’s a critical metric that includes voluntary and involuntary employee exits, encompassing quits, terminations, and layoffs.
This metric differs from attrition, which doesn’t factor in terminations and layoffs. However, in many ways, employee turnover is a far more critical metric to track, as it also includes involuntary exits relating to poor hiring, which often results in poor performance.
How Employee Turnover Impacts Your Business
Employee turnover impacts companies in several ways. The most overt is it leads to vacancies. A loss of a worker causes a business to be shorthanded until the spot is refilled. As a result, productivity often declines, and more pressure is placed on your remaining workforce.
However, employee turnover also affects businesses beyond vacancies. High turnover rates often impact a company’s reputation as an employer. Remaining employees may view frequent exits as a sign of dysfunction, particularly if they end up overloaded frequently to compensate for lower staffing levels.
When it comes to candidates, awareness of a turnover issue can make a company a less appealing employer. Many job seekers will assume that the business falls short in some regard when it comes to handling its employees’ needs. Additionally, they may attribute the high amount of turnover to cultural challenges, often leading them to assume that worker dissatisfaction is generally above what’s found elsewhere.
Finally, high employee turnover hinders productivity and increases costs. Recruitment is often expensive, particularly when positions need to be filled far more frequently than average. Couple that with productivity losses due to not having a full staff, and the financial consequences can be severe.
How to Reduce Employee Turnover
In many cases, businesses can have a far greater impact on employee turnover than they realize. Simple steps like offering competitive compensation, creating opportunities for advancement, taking steps to improve work-life balance, and cultivating a culture based on supporting its workforce, recognizing achievements, and extending respect make a difference.
Additionally, hiring practices impact employee turnover. Having a comprehensive onboarding process sets new hires up for success. Similarly, making wise hiring decisions can ensure that the chosen candidates are a strong match for the role and elevate the culture, improving the workplace.
Connect With Our Team
Ultimately, companies need to ensure their workforce has what it needs to thrive. If you want to update your hiring process to help reduce turnover, the team at GoSource wants to hear from you. Contact us today.