Do you know the true reasons for turnover in your organization?

One of the key metrics any manager needs to understand is turnover.Turnover is the percentage of employees whom leave an organization over a given time for a variety of reasons including resignation and termination.

Why Turnover Matters

Turnover is very important to managers because it can be incredibly distracting for busy organization.

Some of the ways turnover can impact an organization include;

-Cost of hiring a replacement– One of the greatest and most direct costs of turnover are the costs associated with hiring a replacement for the person that has moved on. It has been reported that the cost of replacing an employee is 33% of that employee’s annual salary. To put that in dollar terms, replacing an employee who earns$45,000 would cost the employer organization $15,000. For technical or C-Suite positions, the cost can be even higher.

-Productivity costs –Another major cost of turnover is lost productivity. As employees stay in their roles they develop relationships and expertise which allow them to perform the duties of their roles quicker and with more accuracy. When employees leave an organization, much of this knowledge is lost. In most roles it can take three to six months for an employee to gain full competency. This period of lower competency can delay projects and lead to dissatisfied customers.

Understanding Drivers of Turnover

We know we must pay attention to turnover because it can devastating impacts on our businesses. The challenges is understanding the drivers of turnover. Turnover is the symptom associated with underlying issues in the workplace. But why is it so difficult to understand the drivers of turnover?

-Insufficient exit interview system – Many organizations simply do not have a structured exit interview system in place to capture candid feedback at this critical time of the employee life cycle

-Narrow Performance reviews– Many organizations have performance review systems that do not give employees sufficient latitude to communicate issues affecting them,

-Perception Issues – Many employees have the perception that management is indifferent to the employee experience

-Anonymity Issues – Most employees simply do not feel comfortable providing direct feedback to their managers about their experiences and thus have no anonymous way to provide feedback about what drives their dissatisfaction

Join us next week when we explore the ways organizations can learn more about the drives of turnover in an organization