Employee turnover
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The biggest asset of any organization is the human resource. A company’s success lies in its strategy of hiring, managing, and retaining the employees. Proper HR policies and reward systems contribute in attracting potential candidates and hiring the best talent. Nevertheless, companies have to face employee turnover; it is inevitable! Employee churning is a major part of the business cycle. Companies have to maintain the balance between the hiring and the employee turnover rates.
Employee turnover can happen due to various reasons; the leaders need to gauge the market forces as well as their business strategies in order to retain the top talent.
Employee turnover refers to the total number of employees that leave the organization within a specific period of time. It includes voluntary exits and involuntary exits e.g lay off / firing. It is different from attrition because attrition does not include involuntary exits.
Employee turnover can happen due to various reasons; the leaders need to gauge the market forces as well as their business strategies in order to retain the top talent.
Employee turnover refers to the total number of employees that leave the organization within a specific period of time. It includes voluntary exits and involuntary exits e.g lay off / firing. It is different from attrition because attrition does not include involuntary exits.
Calculating Employee Turnover
- The quality of culture and psychological safety that impacts the tenure of the employees in the organization. Poor work culture and less psychological safety can increase the turnover rate.
- Compensation and rewards can also determine the rate of turnover wherein employees join other companies for salary hikes and various rewards.
- The working conditions.Today’s working generation has higher awareness about the healthy working conditions than the older generations. This has put the companies under pressure to improve their office and working conditions. Unhealthy working conditions lead to employee turnover.
- Discrepancy between the demanded skills and the supplied skills leads to involuntary employee turnovers.
- Managers with poor abilities cannot provide a good environment for the employees. Poor management has been seen as an important reason for the employees to leave the organization.
- Less career development opportunities and future prospects including promotions also lead to employee turnovers.
Reasons for high employee turnover -
Employee turnover has serious implications on the business. Hence, calculating the turnover and keeping a check on it quarterly or annually can be a good practice. SHRM (Society for Human Resource Management) advises Calculation of Employee Turnover by dividing the number of employees departed during a month by the average number of employees on a company’s payroll, then multiplied by 100.
Interestingly…
Gallup research shows that employee turnover is financially burdening for the companies. To replace one employee, the company has to spend one-half to two times the salary of the employee being replaced.
Gallup research shows that employee turnover is financially burdening for the companies. To replace one employee, the company has to spend one-half to two times the salary of the employee being replaced.
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