What is staff turnover?
Staff turnover is an important HR issue. It has a direct impact on the stability and performance of an organisation. Every time an employee leaves and needs to be replaced, it costs time, money and energy. But what exactly does staff turnover mean? Why does staff turnover occur? And how can you reduce staff turnover? In this article, you will learn everything there is to know about staff turnover.
Discover how you can reduce staff turnover in your organisation and keep your team motivated.
Table of contents
Staff turnover is the number of employees who leave an organisation in a given period. This is often expressed as a percentage of the total workforce.
- High staff turnover means that many people are leaving the organisation.
- Low staff turnover indicates stability and satisfaction within the team.
Other terms that are often used are outflow or retention. Outflow refers to the number of employees who leave. Retention, on the other hand, emphasises the retention of staff. Together, these concepts provide insight into an organisation in the field of personnel management.
- Voluntary turnover: when an employee resigns of their own accord. This may be to find a better job or for personal reasons.
- Involuntary turnover: when the organisation decides to terminate the employment contract. This may be due to reorganisation or poor performance.
- Preventable turnover: can be prevented or reduced by organisational interventions. This may be due to a poor working atmosphere or a lack of career opportunities, for example. This is a sign that something is wrong with the organisational culture or the management team.
- Unavoidable turnover: turnover that you as an organisation can hardly or not at all influence. Examples include employees who retire or move abroad. This type can often be limited with good planning.
- Functional turnover: the departure of employees that is actually positive, for example in the case of underperformers.
- Dysfunctional turnover: the loss of valuable employees with knowledge and experience.
It is important to distinguish between these categories. This allows an organisation to better understand where the problem lies and which turnover is truly harmful.
Causes of high staff turnover
High staff turnover often has multiple causes. These can be internal or external. An organisation that understands the causes well can take more targeted action.
In general, an annual staff turnover of around 10% to 15% is considered average. But this does, of course, depend on the sector in which you work, the size of the organisation and the region in which you work. In the hospitality industry, it is normal for companies to have average percentages of 40%. This is because they hire temporary workers during peak seasons. Tip: focus on the average within your organisation.
High staff turnover is rarely caused by a single reason. It is often a combination of factors within and outside the organisation.
Internal causes
For example, a company where staff turnover has been remarkably high in recent years, employees indicated that they felt they were not being listened to sufficiently.
Communication between teams was difficult. In addition, managers rarely took the time for feedback meetings. There were also few opportunities for growth or further development. This combination caused many talented employees to seek their fortune elsewhere. By improving internal communication and training programmes, staff turnover decreased significantly.
Such internal causes are common. When employees see no prospects or feel unappreciated, motivation quickly declines. High work pressure, a poor work-life balance or a management style that inspires too little confidence further reinforces that feeling.
External causes
But not all causes lie within the company. External circumstances play at least as big a role. In times of a tight labour market, employees have more choice than ever. Young professionals in particular are quicker to switch to an employer that better suits their values or lifestyle. Economic trends also influence staff turnover. When the economy picks up, competition for talent increases and people are more likely to switch jobs.
In addition, we see that demographic changes and social shifts have an impact. Younger generations want more flexibility, meaning and autonomy in their work. They stay in one place for less time. Not because they are dissatisfied, but because they value change and growth.
Direct costs
The direct costs are easy to calculate. These include:
- Recruitment costs: advertisements, job sites, recruitment agencies.
- Selection and interview time: managers and HR spend many hours on this.
- Induction and training costs: new employees need to be trained.
For highly specialised positions, these costs can be even higher. This is because new employees need more time to fully master complex tasks. In addition, the extra guidance and selection efforts required from managers and colleagues cost a lot of time and money.
Indirect costs
Indirect costs are more difficult to measure, but are just as important:
- Loss of knowledge and experience: departing employees take valuable knowledge with them. Knowledge that new employees may not yet have.
- Lower productivity: new people need time to get up to speed.
- Negative impact on morale: high turnover can lead to uncertainty within teams.
- Damage to employer brand: high staff turnover can damage reputation.
- Career development: Give employees the opportunity to grow. Offer training and career advancement opportunities. This makes people feel valued and less inclined to leave.
- Good communication: Make employees feel heard. Schedule regular feedback sessions and hold open discussions. This helps to identify problems early on and increases engagement.
- Appreciation and job satisfaction: Recognise achievements, even with small compliments. This improves both customer satisfaction and employee satisfaction.
- Work-life balance: Offer flexible working hours or opportunities to work from home. Employees with a good work-life balance are more productive and stay longer.
- Use of data and tools: Monitor turnover, absenteeism and satisfaction. This allows you to identify trends and take timely action.
- Fair remuneration policy: Offer fair salaries that are in line with the market and good fringe benefits. Transparency and appreciation prevent employees from leaving for a better offer.
By applying these strategies, employees remain engaged for longer and staff turnover is significantly reduced.
- Regular performance reviews help with this. Employees can share their wishes, ambitions and concerns. This makes them feel heard and appreciated. It increases loyalty and reduces the likelihood of them leaving.
- Exit interviews are a second important tool. Departing employees often give honest feedback about the organisation. This information can help improve processes and culture. This can prevent future departures.
- Satisfaction surveys are also valuable. By regularly gauging how employees feel, you can identify problems at an early stage. This enables timely action and increases engagement.
- Career opportunities and development plans keep employees motivated.
- Training and education show that the organisation is investing in their future. Recognition is also crucial. A compliment, a small gesture or appreciation for effort increases satisfaction and commitment.
- Strong onboarding helps new employees get started quickly. They learn about the role and culture of the organisation. This reduces stress and strengthens the bond with the team. Team building and collaboration also create a closer-knit group of employees, which reduces turnover.
- Managers are essential in this process. Coaching leadership promotes communication and motivation. Transparency about policy and changes reduces uncertainty and strengthens trust.
- HR tools such as those from Protime provide insight into turnover, attendance and engagement. With this data, organisations can take targeted measures. This allows you to build a team that remains satisfied, loyal and productive.
Would you like to gain insight into staff turnover, attendance and engagement? With Protime, you can easily keep track of your team and reduce staff turnover. Start with Protime now and build a loyal and productive team.
What is the difference between employee turnover and employee turnover rate?
Both terms are often used interchangeably. In practice, the employee turnover rate refers to the numerical indicator, while turnover refers to the overall phenomenon of departures and arrivals.
How should a high employee turnover rate be interpreted?
A high rate should always be analyzed within its context (sector, type of employment, time period, growth strategy). It's not just the number that matters, but its evolution and distribution.
What HR indicators should be analyzed in addition to turnover?
For a complete analysis, it is recommended to monitor absenteeism rates, employee engagement, average seniority, and internal mobility.
Can HR software help reduce employee turnover rates?
Yes, effective HR software allows you to centralize data, identify trends, and manage specific actions. HR data analytics is now a key tool for sustainably reducing employee turnover.