Staff turnover: how your organisation should tackle it
It is helpful to know how exactly you need to deal with your workforce. A large proportion of companies and businesses suffer from high staff turnover rates; so here’s what this means for organisations and highlight how dire the situation is, as well as offering a few potential solutions for the issue. The Covid-19 pandemic has made it difficult for companies to keep staff in their current roles.
What is staff turnover?
Staff turnover refers to the number of employees leaving a company or business over a certain period of time. Depending on the percentage of staff leaving the organisation, the end result demonstrates that organisations need to make a few changes to the way they run things. There are usually three types of categorised staff turnover. There’s involuntary turnover, voluntary turnover, and total turnover. Experts suggest that a thorough examination of turnover rates can help with employee retention methods to prevent this in the future.
What is staff attrition?
While it may seem like a subject employers would want to avoid, staff turnover can be controlled; this is where staff attrition comes in. This refers to the slow and deliberate scaling down of staff numbers and not filling in their position afterwards. This is also called a hiring freeze; companies find that this method is a less disruptive one of downsizing the workforce and minimising the payroll. Attrition can occur due to several reasons including lack of adequate pay or insufficient working conditions.
Calculating staff turnover
The majority of companies need a heads up when it comes to staff turnover, and there is a proven method to make that calculation, and it only takes up a few minutes of your time if executed the right way.
Firstly, if you wish to calculate your staff turnover by month, you need to identify the number of staff you had at the beginning of that month, then add that figure to the number of staff you had at the end of that month. Once, you divide the total by two that leaves you with the average number of employees that month. Next, you need to divide the total number of employees who left that month by the average number of employees, and then multiply that figure by 100 - this gives you the figure for staff turnover that month.
The calculation for staff turnover by year is essentially the same. You start by adding the number of staff at the beginning of that year, and add it to the number of staff left over at the end of that year then divide that figure by two which gives you the average number of employees. Divide the number of employees who left by the average, then multiply it by 100 - this leaves you with the percentage of staff turnover for that year.
Turnover rates by industry
Government statistics show that on average, 49% of businesses had a decrease in turnover rates in the beginning of September 2021; this was due to high percentage turnover rates from the hairdressing and beauty industries. Half of the businesses are shown to have been unaffected by staff turnover rates in September; the real estate industry reported that over 75% of businesses had been unchanged by turnover rates.
On the other hand, there was an overall increase of 4% in staff turnover this year, with businesses that had more than ten employees seeing a big 16% increase in turnover rates compared to other small businesses.
Costs of staff turnover
HR platform Personio found in May 2021 that almost 40% of employees in the UK were looking to change jobs. In addition to this, only 26% of companies stated that talent retention was their main priority, which could lead to retention and productivity issues. Economic analysis conducted by Personio has revealed that the cost of staff turnover for businesses in the UK could amount to £16.9 billion.
Causes of staff turnover
There are several reasons why staff would choose to leave their position in their organisation, this includes but it not limited to the following:
1. Lack of growth
Providing opportunities for employees is integral for preventing staff turnover; helping them develop their own skills and allowing them to progress in their position. Not giving employees the chance to improve their status will leave them feeling trapped and unhappy with their role. Statistics state that up to 36% of employees will leave their job if they feel that they are not getting anywhere.
2. Being overworked
This is one of the main reasons why employees feel frustrated in the workplace. To a certain extent, asking your staff to pick up the slack caused by their demotivation and working slightly longer hours or even weekends is somewhat acceptable - but it should be a temporary solution until the issue has been resolved. Employees who are overworked can feel drained, eventually refuse to take on these extra responsibilities and leave the organisation.
3. Lack of recognition
Not giving your employees feedback for their hard work is the equivalent of ignoring them; it is important to tell staff that you recognise their efforts every now and then. Lack of recognition or helpful feedback will leave staff to struggle with their problems and eventually give up trying to solve them. A study by Office Team in 2020 found that 66% of employees would leave their job due to lack of appreciation for their work.
4. The wrong role
The process of finding the right person for a particular role can be gruelling and you may want to get it over with as soon as possible. Using this approach will result in hiring the wrong person for the wrong role; this will leave your staff feeling discontent in their new position. Harvard Business Review found that 80% of employee turnover is the result of bad hiring decisions.
5. Toxic work culture
The overall company culture can have a huge impact on how members of staff feel and their productivity levels. Small amounts of communication, little or no holidays, and micromanaging are all signs that there is a toxic work culture at hand. If employees have minimal flexible working hours or feel uncomfortable in the workplace, chances are they will start looking for a job that offers more for them.
Reducing staff turnover
As daunting as it might seem, there are several proven ways of preventing a high staff turnover:
1. Hire the right people
One way you can do this is by improving the recruiting process. When interviewing potential candidates, be transparent about the company culture, and give an honest account of how things are run. That way, you can weed out the people who come with different expectations and employ those who know exactly what role they are signing up for.
2. Reward and recognise employees
This can all start with a simple ‘thank you’ or ‘well done’ when an employee has accomplished something or exceeded your expectations when completing a task. Rewards can come in the form of time off, bringing in food, small prizes and even a raise if the company has the budget for it.
3. Prioritise work-life balance
This can be a big struggle for some employees; if not handled properly, it can lead to burnout, then another job search. To avoid this, try offering staff flexible, remote, and hybrid working hours. This minimises turnover and increases retention; workers won’t have to worry about commuting and stressing too much about their job.
4. Performance reviews
This can be useful when it comes to correcting certain methods the employee may be using and can improve the relationship between the manager and the workers. Giving employees a realistic set of goals that will significantly improve their overall performance in the workplace will engage them and motivate them to do better.
5. Learn from past mistakes
Staff turnover is the biggest hint as to what exactly an organisation is doing wrong; the data collected from turnovers should be analysed thoroughly in order to identify the main reasons why staff have decided to leave and how the organisation can counteract. For example, if a certain demographic is high up on the turnover list, go in depth and assess why that is the case; ask questions and get to the root of the problem.
