What is employee turnover?
There is a measurement of employee turnover (sometimes also referred to as staff turnover), which measures how many employees leave a company each year.
Whenever an employee leaves, a company has to replace them with new employees.
Voluntary vs. involuntary turnover:
An employee can leave a company for various reasons, both voluntarily and involuntarily.
Employees leave voluntarily, usually because they want to work for another company.
Contrary to that, involuntary turnover happens when the employee’s decision to leave the organization wasn’t theirs. Also known as involuntary turnover, employees are terminated due to poor job performance, absenteeism, or non-compliance with workplace policies.
The importance of employee turnover for an organization:
A key HR metric is employee turnover.
Turnover of employees is usually mentioned in a negative light. This is because high turnover rates can lead to high costs for the company.
The cost of turnover:
The cost of turnover cannot be disputed, both in terms of time and money. So, how do you prevent it?
An organization’s cost of replacing and training employees is well-known. However, you might be surprised at how high it is.
With the help of the Center for Management and Organization Effectiveness (CMOE), we identified employee turnover statistics that shed light on the true cost of turnover.
Keep an eye on these statistics and helpful tips to retain top talent and keep talent poachers at bay.
1. It is estimated that the loss of an employee can cost an employer anywhere between 16 – 213% of the employee’s salary.
2. In most cases, bad hiring decisions are responsible for 80% of turnover. To avoid wrong hiring, you can ask a third party for a Pre-employment Assessment.
3. To replace an employee, employers must spend the equivalent of six to nine months of their salary.
Performance and Productivity:
4. Generally speaking, it can take up to two full years for a new employee to reach the same level of productivity as an existing employee.
5. It is believed by more than one-third of executives that, aside from performance issues, the number one reason for a failed hire is a poor match of skills.
Training and Development:
6. It is estimated that 40% of employees who don’t receive adequate training will leave their post within a year.
7. There is an average of a 24% higher profit margin for companies that invest $1,500 or more annually on each employee’s training, compared with companies that invest less yearly on training.
8. There is a 218% increase in the income per employee for companies that offer comprehensive training.
9. It has been reported that 76% of employees are not given enough opportunities for advancement at their current job.
10. There is no doubt that the top reason Millennials leave their companies is that they received a better job offer from another company (30%).
11. A 12% increase in productivity can be attributed to happiness.
12. After investing in the happiness of Google’s workers, the company saw its employee satisfaction rise by 37%.
There is a measurement of employee turnover (sometimes also referred to as staff turnover), which measures how many employees leave a company each year. Whenever an employee leaves, a company has to replace them with new employees. The importance of employee turnover for an organization.
Also read: Types of employees recognition programs
Sajid Hussain is a senior content specialist at wrightoneconsulting.com with proven digital marketing experience under his belt. He harbors a passion for writing on various topics related to futuristic technologies, innovation, and digital marketing to educate and inspire his readers.