When one views any turnover statistics, perhaps the old maxim about the 3 types of lies should come to mind: 1) Lies; 2) Damn Lies; and 3) Statistics. This is because employers utilize different criteria when calculating their turnover rates. However, a business owner doesn’t really need to rely on a numbers analysis to know that there is, or is not, an issue with employee turnover.
Just as with advertised turnover rates, the numbers tossed about with regard to the cost of turnover are all over the board. The actual dollar cost would of course vary by industry and position. Suffice it to say that turnover negatively impacts a business. Some of the cost factors to be considered are: recruiting (acquisition); training; lost productivity; lost knowledge; lower employee morale; and possible adverse effect on client relationships.
If a business has a turnover problem, the first step to address it is to attempt to determine the cause. Is it related to a certain position, shift, or supervisor? Is the most significant turnover coming in the initial 30-90 days of employment? Are pay rates and benefits competitive? If the turnover is involuntary, is it related to a policy, such as attendance; or inability to perform the job duties?
There are a number of actions that can be taken to improve employee turnover. Unfortunately, it often is not a quick fix, and an effective turnover reduction plan requires the knowledge and skills of experienced HR professionals.