One of the biggest management problems is employee turnover. High employee turnover can drive up the costs of the company and keep productivity down. Use a turnover cost calculator to make it easier to calculate.
Types of Employee Turnover
Many companies will classify their turnover by the reasons for leaving. This helps identify which turnover matters the most and can help managers find solutions. Some of these categories include voluntary/involuntary and uncontrollable/controllable. The thought behind this is that if the companies fire the employee, then the turnover doesn’t count. However, it’s important to know that all turnover will cause costs and disruption, whether or not the employee left on his or her own or if he or she was fired. Terminating an employee that isn’t productive is the right thing to do. However, productivity can be improved in the long run by spending dollars on hiring, training, and coaching non-productive employees. Companies wouldn’t be able to ever know if employees could have been successful if he or she had better help and coaching.
Employee Turnover Cost
Using a turnover cost calculator can help determine the cost of employee turnover. This is probably the most important part of turnover data because it’s what causes employees to act. Executives will speak in terms of dollars, so the fact that the company is losing money because of turnover is something important to note. Find a comprehensive turnover cost calculator that will measure both the direct costs to find and train a replacement, as well as the costs associated with lost productivity while the job is open and the new employee is being trained. Lost productivity can usually be the biggest cost.
Employee Turnover Causes
There are many reasons that can lead to employee turnover. Some of these examples can be poor communication, lack of recognition, low pay, non-competitive benefits packages, no employee development, bad work environment, and zero career advancement as some of the top reasons why employees quit. This data comes from employee surveys. To determine turnover reasons, employees will conduct exit surveys to see why employees leave, as well as conduct engagement surveys to see what a company needs to do to keep employees engaged. Once surveys are done, then the executives ask human resources to develop solutions based on survey results. However, this may not be the best solution because there may not be a one-size-fits-all approach that works for all employees.
Reducing Employee Turnover
One of the biggest reasons people quit is because of trust between immediate managers. To find a retention solution, it begins with first-line managers building trust with their teams. This approach contradicts with the one size solution that is often used, but it can be more effective.