Studies show that only a small percentage of companies realize the real negative effects of employee turnover. In this article, we will explore them and try our best to help you overcome the challenges they present.
First of all, you must understand that high employee turnover must be taken seriously. Losing employees can be quite challenging, but what’s more dangerous is the domino effect that this can trigger in your workforce.
Concerns pile up, employee morale goes downhill and they start questioning the reasons why they even work at your company.
This low morale leads to low productivity, which in turn results in reduced profits and growth for your company. It’s a vicious circle process that is hard to stop once it begins.
Negative Effects of Employee Turnover
Hiring new staff, replacing experienced workers, training, it all comes at a cost. Your HR department will need to post job offerings which will cost money. Conducting interviews cost time.
Additionally, you might have to pay your other workers overtime or bonuses because they need to take on extra responsibilities, while you are looking for a replacement.
It lowers morale
Speaking of extra responsibilities, no one wants to work extra for the same pay. Added responsibilities can be a factor in burnouts, increasing employee turnover risk.
Plus, we all hate losing long-time colleagues, and it can be the last straw for some to reconsider their job engagement.
It lowers Productivity
A disengaged workforce with low morale results in lower productivity. When the employee leaves, productivity will usually take a downturn because other workers may have to add the former employee’s duties to their own workload, at least temporarily.
Furthermore, you lose experienced and trained staff that know the policies and goals of the company. So, high turnover means having many inexperienced employees, which will eventually lead to lower employee productivity.
It lowers Growth and Profits
And the circle is complete. The reduced productivity and extra costs have a direct impact on your profits, reducing the growth of your company.
Businesses often take months or years to achieve profitability and unexpected costs like high turnover can increase the time it takes a new venture to make a profit or break even.
After going through the negative effects, we can see clearly that high employee turnover shouldn’t be taken lightly. As Millenials become more present in the workforce, job-hopping has become much more prevalent in recent years.
So turnover should be expected, but keeping it to a minimum and being able to quickly overcome the negative effects is important.
Overcoming the challenges
While prevention is the best approach in this matter, there are some direct solutions on how to mitigate the negative effects of employee turnover.
Take a step back and assess your company flaws
Conduct exit interviews. Assessing why an employee wants to leave your company will help you gather insights on how your workforce sees you.
Ask the right questions and try to find the problem so you can fix it for the future. It’s never easy to hear criticisms and concerns, but you’ll never get to the root of problems without asking questions and then listening.
Best practices in having an objective view are hiring a third party to conduct exit interviews, as managers might be involved in the problem.
Expose key concerns and correct them as soon as possible. It’s easy to get distracted and not follow through.
Companies should have dedicated teams or individuals that can analyze gathered data and create an employee retention plan.
If there’s a manager with high levels of turnover, use feedback to coach them. If the salaries in your company are too low in your niche, try to match your competitors.
Any new changes instituted show current and former employees that you truly care about. If left forgotten or unfinished, that sends a bad message to your remaining workers.
Restructure the hiring process
Again, this is a prevention-solution, but it can’t be stressed enough. Once you have analyzed the data, have a good look at your hiring process.
Are you getting the right people for the job? The best way to ensure employees don’t leave you is to make sure you are hiring the right employees to begin with.
Define the role clearly, both for yourself and the applicants. Finally, make sure the candidate is a fit not only for the job itself but for your company culture as well.
Cross-train your employees in different job positions. That way, you will have employees that are able to help pick up some of the slack while you find a good new recruit.
Having a system in place where tasks can be effectively distributed while looking for the perfect replacement will be invaluable. Your remaining workforce will know beforehand that there’s a plan, and that their responsibilities won’t be increased indefinitely.
Turnover being inevitable, sooner or later, someone in your company will have to take some extra work while you look for the perfect candidate.
With the aforementioned task distribution plan, make sure you compensate for the extra work accordingly. Whether it’s extra paid vacation or bonuses, this will show to your remaining workers that you value their work and keep morale high.
Unlike several decades ago, employees don’t typically stick with the same company for the majority of their careers.
You should always be prepared for the negative effects of employee turnover, and nip the problem in the bud. This will help you avoid the domino effect of your workforce crumbling and losing entire teams of experienced employees.