What is employee turnover?

Put simply, turnover is the number of employees who leave your company and have to be replaced within a given period. Turnover can be high or low. We talk about low turnover when a small number of people leave your company within a given period. High turnover means a large number of people leave within that period. Measuring turnover can produce a great deal of insight, into what it costs, for example.

When is turnover high or low?

Unfortunately there is no magic percentage that tells you whether your turnover is high or low. The easiest way to find out whether your turnover rate is too high or too low is to compare your average with the average of other organisations in the same sector. In the Netherlands the average sits at around 17%. Well above that? Then your turnover is probably too high.

Is it bad to have high or low turnover?

There is nothing wrong with low turnover. It can be a very good thing when few people leave your company, because you keep the knowledge in house. High turnover, on the other hand, can damage your organisation. What matters is looking at who is leaving and why. It does not always mean your organisation is an unpleasant place to work. People may be retiring, going travelling or changing career. In those cases there is not much you can do. It is a bigger problem when valuable people leave, because they are joining a competitor, for instance, or because they are unhappy at work.

Why can high turnover be a problem?

Replacing people can be expensive. Although the costs vary by organisation and by role, various studies have shown that they can run to 60% of the departing employee's salary. On top of that, the total cost of replacement, including training and lost output, can range from 90% to 200% of an employee's annual salary. The people who stay are also less productive , because they have to absorb the responsibilities of vacant roles.

What are the main reasons for employee turnover?

The main reasons people give for leaving a job are:

• Lack of opportunities to progress
• Poor management
• Lack of organisational fit
• Lack of the training, support or resources needed to do their job well

How do you reduce turnover?

High turnover is costly. It also has a negative effect on the people who stay. The more often you see colleagues leave, the sooner you start asking yourself whether this is still the right organisation for you. If you want to keep good people, these are the steps to take:

1. Select people who fit
   In your selection process, look first at whether people fit the culture of your organisation. If they do, move on to your other selection criteria. That way you avoid a mismatch of 'DNA': the core values and standards.
2. Make development paths visibleDevelopment and growth matter to people. Those opportunities often exist internally, but they are not clear. So make sure people can see their own competencies, that others can find them on the basis of those competencies, and that it is clear how they can put those competencies to further use in the organisation. In other words, give them a prospect of growth.
3. Show your people you value themShow appreciation when people do something well. Make it clear that you value their work. That is how you create a positive working environment.
4. Listen to your peopleBe open to your people's experiences and suggestions. With a Treams pulse survey you can take the temperature of your organisation in a targeted way and ask anonymous follow-up questions about what is really going on. It gives you a sense of whether people feel free to speak up. Psychological safety is an essential condition for satisfaction, engagement and growth.

The Treams growth platform gives you everything you need to get started with all of this straight away. Easy to pick up and woven into everyday practice.

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