Companies with high employee turnover generally have lower service quality, lower productivity and lower profitability.  If not managed effectively, turnover can become a vicious circle that eventually can lead to company failure.  Retaining employees is the foundation of every company’s success. There can be many different root causes of turnover and here are a few of them:

  • Toxic Workplace -  Low morale, high stress, poor communications, exclusion instead of inclusion, overwork, unrealistic performance expectations, boredom, low levels of trust
  • Low Performing Manager – Micromanaging, plays the blame game, shows favoritism, arrogance, lack of clarity, overly critical, does not lead by example
  • Lack of Career Growth - No opportunities for advancement or promotion, low quality training and development, lack of a clear career path
  • Lack of Purpose or Meaning - Meaning enables employees to have hope for the future and an opportunity to create value for customers. Does the work provide identity, purpose, teamwork, resilience and a sense of accomplishment? Does the work give employees something to believe in?
  • Low pay and benefits - When a business fails to provide employees with a competitive level of pay, there are long-term effects: reduced ability to attract talent, reduced employee wellbeing and health, and reduced employee engagement and productivity. Gallup’s State of the Global Workforce (2017), found that disengaged employees are 45% less productive.

What Is Employee Turnover Costing Your Company?

It costs money to replace an employee. Every aspect of losing an employee and hiring another has a cost: recruiting, hiring, onboarding, coaching and developing, and bringing the new hire up to the same level of productivity as the previous employee.  The time lost for doing all of the above can cost months’ worth of work for the company. Employee turnover includes monetary and intangible costs, such as lost productivity, lost time and role expertise.  High turnover often has a negative effect on the morale of the remaining employees. Whether workers are being terminated or leaving of their own volition, the remaining employees often have to take on additional duties when someone leaves, leading to resentment and lower morale. For those who want to estimate the actual cost of turnover, HSD Metrics provides a free online Turnover Cost Calculator.

Turnover Decreases Profitability

The quality of an organization’s workforce determines its overall performance and profits.  Performance in sales production and quality of service delivery can easily be traced to the quality of the organization’s recruitment and hiring practices for these positions.  Check out our Pre-employment assessments USA for sales and service positions:  Prevue Assessment, Customer Service Profile and First View Assessment

Reducing and Preventing Turnover

Employee turnover is one of the most important issues facing business organizations. Preventing turnover requires listening to your employees. Learning why they leave is important but so is understanding why they stay. You can identify the common factors for both.  Use Pre-employment assessments USA to match people to jobs, teams and managers. If managers don’t show recognition and appreciation employees will seek a different workplace.  Assessing candidates for your specific positions will result in a better quality of hire.  For more information on turnover go to:  What Predicts Turnover?

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