What Is Employee Turnover?

Employee turnover refers to the rate at which employees leave an organization over a specific time period.  It can be classified as either voluntary or involuntary turnover. 

Voluntary turnover is when employees choose the organization through resignation. Involuntary turnover is when employees are asked to leave the organization through termination or a layoff. 

What are the causes of employee turnover?

There are a number of factors that can contribute to employee turnover. Voluntary turnover may be driven by:

• The desire for better pay or benefits.

• An opportunity for career advancement or a more challenging role. 

• An interest in pursuing further education.

• Dissatisfaction with the company and its senior leaders or management.

• Personal or family-related needs.

Involuntary turnover is frequently driven by poor performance, a poor cultural fit, or the need to downsize or rightsize due to economic, market, or competitive pressures.

Why is it important to control turnover?

Reducing employee turnover has a direct impact on the organization’s costs and the retention of institutional knowledge. Turnover results in lost productivity as well as expenses associated with recruiting, interviewing, and onboarding new employees. Gallup has estimated that replacing an employee can cost anywhere from half to twice their annual salary. 

Turnover can also lead to the loss of institutional knowledge. When valued employees leave, their organizations can experience a significant loss of institutional knowledge that can be difficult to replace and that can negatively impact organizational performance.

What can companies do to minimize employee turnover?

Companies can take the following steps to minimize employee turnover:

• Ensure that compensation and benefit packages are competitive.

• Evaluate and enhance hiring and onboarding processes to ensure realistic job previews and an effective and timely acclimation to the company and its policies, procedures, practices, and culture. 

• Prioritize diversity, equity, and inclusion efforts which contribute to employee satisfaction and retention.

• Invest in employee personal and professional growth which has become a major driver of employee satisfaction and retention.

• Recognize and reward employee contributions to organizational success.

• Use surveys and polls to evaluate employee climate and sentiment and identify opportunities for improvement.

This list is not exhaustive. Leaders should look inward to understand the unique drivers of attrition at their organization, and take steps to right the ship. Technology can play an important role in helping to identify these causes, and minimize employee turnover.

What role can technology play in minimizing employee turnover? 

An ongoing, data-driven approach to analyzing employee turnover and employee sentiment can help identify why people leave and provide insights into actions that can help boost retention. Technology offers both the opportunity to gather and analyze input from employees and to continually measure and monitor key metrics that can be used to measure, monitor, and predict turnover risks.

Read more on employee turnover:    

• Turnover Contagion is Real—and The Clock is Ticking

• The Great Resignation’s Next Act: Manager Turnover

• 12 Strategies to Reduce Employee Turnover That You Can Start Using Now