In today’s rapidly evolving, competitive business environment, maintaining a stable workforce is essential for creating success in a company. High staff turnover isn’t just a statistic, but a challenge that hugely disrupts companies. However, it can be mitigated by implementing the right strategies. This article will look into key insights around staff turnover, provide you with insights and strategies to address the challenges and offer ways to measure it.
What is staff turnover?
Staff turnover is the number of employees who leave a company within a given period, it is usually measured by year. It includes employees who are leaving for a new job, retiring, have a long-term illness or leaving for further education. It is crucial that employers understand why their employees leave. This then enables them to do something about it. Further, high turnover rates also lead to increased recruitment costs, loss of knowledge and disruptions. The parting of employees can be split into two terms, voluntary turnover, when an employee chooses to leave their position, and involuntary turnover, when an employee is usually terminated and it is not their decision.
Key insights into staff turnover
Research by the Chartered Institute of Personnel and Development has sought-after data that enables organisations to benchmark. They have used figures from the Annual Population Survey undertaken by the Office for National Statistics. CIPD states that the turnover rate is 34%, with 27.4% of employees moving to a new employer and 6.6% leaving the workforce entirely. Turnover rates range from 25% in public administration and defence to 52% in hospitality. This shows the difference in the sector. Two-thirds of employees remain with the same employer year-on-year, which shows the importance of retention strategies.
The impact of staff turnover
Staff turnover can have a large impact on businesses. While in some cases it could have some positive impacts, such as introducing fresh ideas by new people, excessive turnover can be bad. Replacing employees is expensive. The CIPD Resourcing and Talent Planning Report highlights that companies often underestimate the costs of, for example, having to train new employees, coverage during vacancies, recruitment costs and administration. Further, losing employees with specialist skills or knowledge can disrupt operations, especially in industries with hard-to-fill roles. Frequent turnover can also often demotivate staff and increase workloads, as well as create a sense of instability when turnover is high. High turnover can really damage your brand and make it harder to attract top talent.
Key strategies to reduce staff turnover
Understanding why employees leave is crucial in addressing turnover, and there are many ways to reduce it:
- Offering competitive benefits and compensation is a good way to reduce turnover. Companies can do this by regularly benchmarking salaries and benefits against industry standards to ensure competitiveness. Many will offer perks, such as flexible working, health and wellness programmes and rewards based on performance, to boost satisfaction.
- Fostering employee wellbeing is another way to invest in initiatives that support physical and mental health, such as wellness programmes, therapy services and ergonomic workplaces.
- Opportunities for growth are appreciated, as many employees value them. When providing training programmes, mentoring or creating clear career pathways, employees will feel the Company is invested in their development.
- Remote work encourages a good work-life balance, as well as compressed hours, which allows employees to manage their responsibilities effectively and reduce burnout.
- Managers should focus on building trust and offering good feedback, which will foster a positive workplace. Good leadership is crucial to keeping employees engaged and happy. It is also important for workplaces to be inclusive, and employees should feel valued and respected.
How to measure and analyse staff turnover?
Measuring turnover rates and analysing patterns is important to gain insights for improvement.
To calculate your average turnover rate, you should divide the number of employees who left by the average number of employees, then multiply it by 100. Here is the calculation:
Hospitality should expect a higher churn due to its unique workforce structure, but public sector companies will have a lower turnover due to their stable roles and structured career paths.
Addressing challenges in staff turnover
There are challenges when addressing staff turnover, such as conflict, disengagement or financial pressures. Companies should conduct regular surveys to gauge employee sentiment and catch potential issues early. They should also implement conflict resolution mechanisms to address disputes well and offer personalised support, such as development plans or flexible working for at-risk employees.
How COVID-19 has affected staff turnover
The COVID-19 pandemic has had a huge impact on staff turnover across many industries. During the height of the pandemic in 2020, many employees chose to stay in their jobs, instead of seeking new opportunities, as the economic side of it was very uncertain. Many companies halted recruitment to cut costs, which reduced mobility in the labour market.
The UK Government introduced a Coronavirus Job Retention Scheme. The furlough scheme provided financial support to employers, which preserved millions of jobs and reduced turnover as employers were less likely to make staff redundant.
However, as the UK emerged from lockdown, turnover rates grew. People used the pandemic to reconsider their careers and sought after roles that offered better benefits. Essential workers, especially doctors, faced immense pressure during the pandemic and experienced burnout. However, the pandemic introduced the possibility of remote work for many businesses. It allowed companies to be more flexible.
Conclusion
Overall, staff turnover is an inevitable aspect of organisational life, but by understanding the causes and creating ways to tackle its impact, companies can foster engaging and stable workplaces, which will allow for better performance. Creating a supportive culture, training managers to support their team members and to effectively manage performance, giving staff a voice via an employee engagement survey, and offering appropriate rewards, organisations can turn turnover challenges into growth and success.