Staff Turnover

Employees leaving could affect 6-8 months of productivity in an SME. 9 reasons why staff leave - lack of growth, work burnout, lack of recognition, independence to reach goals & more. Save 26% costs by retaining staff.
  • Author: Siva
  • Last updated: October 18, 2022
  • 5 Minutes
staff turnover and employee attrition affects a small business owner in the UK explained by Papershift

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Having a high staff turnover can lead to two things: 

  1. A negative impact on company performance.
  2. A negative atmosphere within the workplace.

A business can reduce its staff turnover rate by implementing a staff retention strategy. But what exactly is staff turnover and what can you include in your retention strategy to make staff want to stay?

In this article, we’re going to explore some of the critical things you need to know about employee turnover, retention, and more.

Let’s begin.

What is staff turnover?

Employee turnover is the number of employees who leave a business over a particular period. 

When a business is having to refill job positions because staff are leaving frequently, they have a high staff turnover.

If workers rarely leave and a company infrequently has to look for new hires, then they have a low workforce turnover, or a high retention rate.

1 employee leaving costs you 6-8 months of productivity
Employees leaving impacts small businesses more. It impact business continuity. Time is spent on retraining and onboarding new employees. The cost of an employee lost in a small business could be equal to 6-8 months of productivity lost. Keep a check on healthy attrition to deliver consistent customer service.

What can cause a high staff turnover rate?

There are many things that can cause a high staff turnover rate. These include:

  1. Lack of growth and progression. If an employee feels trapped in a dead-end position, they are likely to look towards other companies for the chance to improve their situation.
  2. Being overworked. Asking workers to choose between their work life and personal life will contribute to a higher turnover. It is imperative to maintain a good work-life balance for staff. 
  3. Lack of feedback and recognition. If an employer avoids giving feedback, they might be pushing their employees away. Ignoring the opportunity for feedback, or providing unhelpful feedback, will leave employees to flounder, become disheartened, struggle and, eventually, giving up.
  4. Little opportunity for decision-making. Stifled, over-managed employees, are likely to grow frustrated with the lack of freedom, which can contribute to high staff turnover.
  5. Poor employee selection in the first place. Finding the perfect employee is difficult but forcing a match with an employee that is not right for the company culture or values will never end well.
  6. Your competitors are offering more. “More” doesn’t necessarily mean higher salaries, although it can. It can also refer to more flexible schedules, more benefits, and more of just about everything else.
  7. Poor management. Full-time employees spend the majority of their day at work. Overall, people give over 13 years of their life to the office. Poor management can mean a lot of things, from illegal activities (such as sexual harassment) to maddening issues, like lack of recognition, constant conflicts, or micromanagement.
  8. Toxic culture. This involves the type of corporate culture that sabotages morale, scares away new talent, and actively drives away its best people. That company might have the best possible people for the job, but those people will leave as soon as they connect their increasing stress levels, tanking physical and mental health, and eroding motivation with their toxic culture.
  9. Lack of purpose or meaning. Working with a shared purpose can increase motivation and performance, not to mention create more cohesive teams.

What are the consequences of a high staff turnover?

The following areas may suffer negative impacts when a business has a high rate of employee turnover:

  1. Financial aspects of the business. High turnover can bring higher direct and indirect costs to a business. Direct costs are things like expenses for recruitment, selection, orientation, workshop, and training for fresh employees. Indirect costs are costs incurred as a result of spending on education, stress on existing workers, and the collapse of social capital.
  2. Overall business performance. When good employees quit and less experienced workers are retained, the quality of the service provided to customers often decreases. 
  3. Daily task management. Apart from quality issues, employee turnover also affects the quantity of work completed. New staff need time to get up to speed and productivity can be compromised by constantly having to hire.
  4. Company image. A high turnover rate can result in a negative reputation for companies as potential employees will find it alarming that people are choosing to leave the organization frequently.
  5. Team dynamics. Frequent changes in employee line-up can have serious consequences on a team’s ability to establish rapport among its members. It can take a long time for teams to adjust to the work habits of a new employee, especially if that person is an outsider that’s been brought into the organization.
  6. Productivity and continuity. The new employee has to go through a period of adjustment in the workplace, which means that tasks may take longer to. Consequently, there might also be delays within teams that are relying on the newcomers help to get things done.

What can I do if I have a high workforce turnover?

There are many things a business can do to retain staff, including:

Offer competitive salaries and benefit packages

One way in which you can ensure your employee turnover reduces, and retention increases, is to offer more competitive salaries or offer benefit packages.

When hiring new employees, make sure the salary is competitive for the role and location. Check out other companies of similar size and recognition and see what they offer as a salary, or bonus packages, for the role similar to the one you’re advertising.

Ensure that workloads are fair

Nobody likes to feel overworked and exhausted. Make sure the workload is split fairly between each team and ensure each team member has the skills and knowledge to complete the task they are being set. 

Get to know your employees, and get them to know each other

One of the most important things you can do is to get to know your employees on a more personal level. This will make them feel wanted as part of the organisation, increase their morale and encourage them to stay.

Hire the right employees in the first place

Hiring the right people who have the correct skills and fit into the culture of the workplace will reduce staff turnover.

Allow for career development

If employees are leaving your company, it’s possible that they may just feel that it’s time to progress in their career, and that’s something you can’t offer them.

If you have the resources, promote employees up the ladder of job roles and offer career development advice within the company. 

In conclusion

Staff turnover can cripple a business and drain it of the talent and resources it needs to succeed.

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We hope you have enjoyed our guide. For more useful workplace best practices and guides, check out the rest of our website. 

Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)