High Employee Turnover Rate? Here's How to Fix It

Are you starting to feel like every day you hear about another coworker who has decided to leave your organization?

You’re not alone – employee turnover is a real problem that many companies struggle with, which could be a sign that your recruitment process isn't as effective or as thorough as it should be. As an HR professional, it can be frustrating to see employees cutting ties with your organization regularly without any idea what’s wrong or how to go about fixing it. 

Finding a solution for employee turnover and improving employee engagement can seem difficult if you've never done it before or are unsure where to start.  While there is no one size fits all solution to employee retention, there are a few things you can do to get your company on the right track. 

What is employee turnover?

Before you can work to improve employee turnover at your organization, you need to define it properly.

Employee turnover is defined as the loss of talent within an organization over time, usually over one year. This includes everything from resignations, layoffs, terminations, retirements, and location transfers. 

There are several types of employee turnover that your company should be aware of. They include:

1. Voluntary turnover: When an employee chooses to leave on their own. This occurs when they have been offered a better opportunity elsewhere, are feeling disengaged in their current role, or there’s a conflict in the workplace.
2. Involuntary turnover: When an employer chooses to terminate an employee, for the reason of poor performance, toxic behavior, or a reduction in force. 
3. Healthy turnover: When the ending employment relationship is best for both the employee and the employer. 
4. Regrettable turnover: When an employer loses an employee that they deem to be important to the success of the business.
5. Avoidable turnover: When the reasons an employee has decided to leave are within the employer's control or influence. 

How to calculate employee turnover

It’s common to calculate employee turnover to predict trends in employee morale, customer service, and employee productivity over a month, quarter, or year. You can find your organization’s employee turnover rate with a specific equation.

For example, you work at a company with 200 average employees, and you’ve had 25 employee departures over the last year. To find your company’s turnover rate, you’d apply the equation like: 

25 / 200 x 100 = 12.5% employee turnover rate

As you calculate employee turnover, don’t include temporary hires or employees who go on temporary leave, whether it be on a sabbatical or paid parental leave, in the equation. 

How to reduce employee turnover

The hardest part of fixing employee turnover is that it takes an incredible amount of work to identify the cause and then create a solution. You’ve taken the first step in finding one by recognizing a problem that needs to be solved.   

If you’re skeptical that those six steps are all you’ll need to repair your employee retention, you should be. This process will take several months of planning and cooperation from everyone in your organization.

What causes employee turnover?

The cause of employee turnover will vary from company to company, as there is no singular reason why employees quit. According to industry research, employees cite many common reasons why they want to leave their jobs.

These common reasons given by employees as reasons for quitting should serve as a jumping-off point for your own internal investigation. Chances are, at least you’ll find at least one of these problems as the reason your own employees don’t want to stick around.

Unsure which of these might be the root of the problem at your company? It may be time to invest in talent management software that can help you track employee engagement, employee satisfaction surveys, and more. 

Employee engagement software offers HR managers the opportunity to solicit and track employee feedback, recognize employee achievements, and promote positive activity. While it's not required, it can significantly assist HR departments in dealing with many employees.

The hidden cost of high employee turnover

Believe it or not, the cost of high employee turnover is more than just the money you’re losing. Choosing to ignore your employee retention problem could be inadvertently harming your brand reputation and employee morale.

These hidden costs can penalize you more in the long run than an employee taking their talent and skill elsewhere. Every employee that leaves your company is an unofficial brand ambassador for what it’s like to work for you. The longer you leave your employee retention problem unsolved, the more frustrated employees will leave and become detractors of your brand.

Do you feel confident that former employees will speak about your company in a flattering way? If not, it’s time to focus on fixing your employee retention problem as soon as possible.

How to tell if your company has an employee turnover problem

The big question you’re probably asking yourself right now is, just how bad is my company’s employee turnover? One thing to keep in mind during this process is that employee turnover is an unavoidable part of doing business. You will always have employees who leave your company regardless of the changes you make, and in some cases, employee turnover can be a good thing.

It’s normal for a company to occasionally lose high-level and tenured employees due to career progression, life changes, and more. This is an inevitable part of any company’s lifecycle. Alternatively, losing low-level or underperforming employees can be a good thing for your company because it offers you the chance to hire fresh, new talent.

If you find yourself in this category, you probably have an employee turnover problem on your hands. Employee turnover on a large scale can cause problems for any company, and any combination of the above issues can spell trouble for an organization.

How to improve employee retention

Now that you understand the cause and cost of employee turnover, it’s time to go about fixing it. The process of reducing employee turnover takes time and special attention to repair. As an HR professional, you’ll need the full cooperation of everyone in your company to address the problem correctly.

1. Analyze your company's turnover rate

The first step to fixing your employee retention problem is figuring out just how big your problem is. You’ll need to take an inventory of all the relevant information to decide your employee retention problem before you move forward.

You may find a pattern emerges once these questions are answered. Once you can identify a pattern for your company’s poor employee engagement, you can focus on how to fix it.

2. Be transparent with your employees

Once you’ve determined the depth of your employee retention problem, it’s time to talk with your current employees about it in hopes that they can offer a direct insight into what the issues are and provide solutions for how to fix it.

There’s a good chance that your current employees are already aware of the company culture and the problem with employee retention. Some may only be passively aware of it, while others may be actively looking to leave your company because of it.

One step you may consider taking is conducting an employee engagement survey designed to address employee retention specifically. Ask for direct feedback about their experience and allow them to be open with criticism. Your employees should always have the option to fill out their employee survey anonymously. This step may be one of the most difficult, but it can also be the most valuable.

You’ll want to keep communication open during the process and inform your employees about the steps you’re taking to fix things. Let employees know that your office is open and that you are willing to listen to their complaints and suggestions without fear of repercussion. You need to include your current employees in the process of fixing your employee retention problem.

3. Reexamine your hiring and onboarding process

If you’re having a problem retaining employees, there’s likely a problem with the process you’re using to hire and train new employees. One of the first projects you can tackle during this process is reexamining your hiring and onboarding process. This is another part of the strategy to speak with current employees about what specifically they think can be improved upon. It’s easier to train someone on the job than forcing someone to be a good culture fit.

As you continue changing things and working to improve your employee retention, remember to follow up with surveys and questions to gauge the effectiveness of this new strategy. Conduct a survey for each new candidate after they are hired and onboarded; ask what worked during the process and what they thought could have been better.

Here's how to fix your employee onboarding process:

• Consider investing in employee onboarding software to make everything as seamless as possible
• Ask current employees what they wish onboarding covered
• Involve your employees in onboarding and training new hires
• Ask managers how you can support them in the onboarding process
• Make yourself available to new hires during their first couple of weeks
• Create a mentorship program and partner new employees with current ones
• Offer continued support and training after the onboarding process is complete

4. Focus on employee happiness

The best way to keep employees from quitting is to keep them happy at work. Employee motivation will vary from person to person, which is why you’ll want to take a holistic approach to keeping your employees happy.

A simple way to figure out what motivates your team is to ask them. Have your managers meet with their employees one-on-one and find out what they are inspired by, and use this information to boost your employee retention plan.

Many of these improvements will take time to implement, so it’s essential to communicate with employees as the process unfolds. Focus on a few quick wins you can accomplish immediately from the list above to help improve morale and employee retention.

5. Don't be afraid to make tough choices

There’s a chance that the problem causing your employee turnover problem isn’t just a lack of benefits or career growth, it may be other employees. This is one part of the process that will take time and a delicate touch to maneuver, but it may help save your company culture and fix your employee turnover problem.

You shouldn’t be too quick to fire someone simply because employees complained about them. It’s important to get both sides of the story and give everyone a chance to explain themselves before making any decisions.

Unfortunately, there will be some cases where you run out of options with some employees and you may need to let them go. You should be prepared to make some tough decisions during your quest to repair your employee retention.

It's never too late to fix employee turnover

You may have already lost some great employees to poor talent management, but that’s okay – there’s no reason you can’t start on fixing the problem. Employee retention is a tricky thing to manage, but with the help of this article and your coworkers, you’re one step closer to closing the door on employee turnover.

When an employee has decided to part ways, make sure you carry out employee offboarding the right way to avoid burning bridges.