Turnover: What is and how to avoid it in your company

Published on 02/04/2024

Turnover: What is and how to avoid it in your company

Published on 02/04/2024
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Turnover: What is and how to avoid it in your company

What is Turnover

Turnover, also known as staff turnover or turnover rate, refers to the movement of employees within an organization, whether in terms of entry, new employees, or exit, employees leaving the company.

A high turnover rate can indicate various problems within an organization, such as low employee morale, job dissatisfaction, lack of development opportunities, negative work environment, among others. On the other hand, a low turnover rate can indicate stability and job satisfaction among employees.

It is important for companies to monitor turnover and understand the reasons behind employee departures in order to implement effective talent retention strategies and improve employee satisfaction and engagement.

Types of Turnover

Turnover, or staff rotation, can be classified into two main types: voluntary and involuntary.

  • Voluntary turnover: This type occurs when an employee chooses to leave their job on their own accord. Reasons may include seeking new career opportunities, job dissatisfaction, lack of recognition, personal issues, changes in personal life, among other reasons.
  • Involuntary turnover: In this case, employees leave the company against their will. This can include layoffs, staff cuts, termination of temporary contracts, forced retirements, among others.

It is important for companies to understand the nature of these two types of turnover and take appropriate measures to address all possible causes and maintain a stable and committed workforce.

Impact of Turnover on the Company

The impact of turnover on a company can be profound and multifaceted. In financial terms, the constant flow of employees can generate significant costs associated with hiring and training new workers. This can result in an increase in operating expenses and a decrease in short-term profitability.

Additionally, the time and resources invested in recruiting and training new employees can affect operational efficiency and divert attention from other key areas of the company.

On the other hand, turnover can also have a negative impact on team morale and cohesion. Employees who observe the constant departure of colleagues may experience uncertainty and distrust in job stability and the company’s direction.

This can lead to a decrease in morale and motivation, which in turn can affect productivity and the quality of work. The lack of continuity in work teams due to staff turnover can cause disruptions in projects and decrease the overall effectiveness of the team.

Practices to reduce turnover

Reducing turnover in a company requires a comprehensive approach that addresses both the underlying causes and the needs of employees. Here are some effective practices and strategies that can help your company:

  • Improve the recruitment and selection process: Make sure to hire people who not only have the necessary skills for the job but also fit with the culture and values of the company. This can help reduce the likelihood of employees leaving due to poor cultural fit.
  • Offer competitive benefits and compensation: Provide benefits that are attractive to employees and motivate them to stay with the company in the long term. This can include health insurance options, wellness programs, retirement plans, performance bonuses, etc.
  • Encourage professional development and growth opportunities: Offer training and development programs that help employees improve their skills and advance their careers within the company. The possibility of professional growth can increase retention by keeping employees engaged and motivated.
  • Create a positive work environment: Promote an organizational culture that fosters respect, open communication, teamwork, and recognition of performance. Employees who feel valued and supported tend to have higher job satisfaction and stay longer with the company.
  • Offer work-life balance programs: Implement policies that support work-life balance, such as flexible schedules, personal days off, remote work options, etc. This can help reduce stress and improve job satisfaction.
  • Recognize and reward exceptional performance: Publicly thank and acknowledge employees for their work and contributions to the success of the company. Performance recognition can increase morale and motivation and encourage long-term commitment.

By implementing these practices and strategies, companies can significantly reduce turnover and create a more stable, productive, and satisfying work environment for their employees.

How can we measure turnover in our company?

Measuring turnover in a company is essential to understanding its impact and developing effective strategies for its management and reduction. There are different metrics and tools that allow not only to quantify this phenomenon but also to understand its causes and design corrective actions.

Before looking at tools that can help us measure this phenomenon, it is important to understand the basic formulas for calculating turnover:

Turnover rate: It is calculated by dividing the total number of departures in a given period by the average number of employees in the same period, and then multiplying the result by 100 to obtain the percentage.

Thus, it would be:

Turnover rate = (Total number of departures / Average number of employees) x 100

Tools that can help us

WorkMeter offers a platform that allows the objective measurement of employee performance. Through its analysis, HR directors can:

  • Offer objective assessments. The assessments are based on real and measurable performance data, providing a solid basis for recognition and feedback. This helps ensure that employees feel valued for their work, increasing their satisfaction and commitment to the company.
  • Identify employees at high risk of departure. By analyzing behavior and performance patterns WorkMeter helps detect early signs of discontent, allowing the company to take preventive measures before the employee decides to leave.
  • Offer personalized advice. Based on performance data, department heads can provide specific recommendations for each employee, helping to improve their performance and job satisfaction. This includes suggestions for professional development, training opportunities, and tips for improving work efficiency.

So, as seen throughout the article, understanding and managing turnover is crucial for the success and sustainability of any organization. Effective management of turnover not only reduces the costs associated with hiring and training new employees but also improves team morale and cohesion, increasing productivity and fostering a positive work environment.

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