Why Are the the Reasons Behind Employee Turnover and How to Fight Back?

The truth is that keeping employees at your organization for a long time is about the right numbers – and is totally not about the numbers – at the same time. 

How is that possible? 

According to Gallup research, just 31% of employees leave their positions within the first six months. Imagine the organization investing all of this time, money, and effort into the onboarding of this new employee, only to have to repeat the process after six months.  

But there is also an even more fascinating and encouraging finding: 52% of all resignations are avoidable! With the right induction, concern for the wellbeing and being proactive, high employee turnover rates can be reduced and controlled.

But to combat something, we first need to understand it. This week, learn what causes high employee turnover and what actions you can take to reduce it. 

What is Employee Turnover Rate?

Let us start with the obvious. Employee turnover is essentially the rate at which employees leave an organisation within a given time frame. Employees who leave of their own accord are considered part of voluntary turnover, while those who are dismissed are counted as involuntary turnover. 

How to calculate employee turnover rates? You need to: 

  1. Add up all the personnel who departed your company in a given time frame, like the previous six months. 
  2. Find out how many people were employed on average during that period. 
  3. After that, divide the total number of the departed employees from the average number of workers over the given time. 
  4. If you multiply your turnover rate by 100, you can easily convert it to percentage data. 

Employee turnover rate needs special attention as it affects a company's ability to achieve its growth targets. Therefore, it is crucial to know and understand the annual turnover rate in the company in order to reduce and improve it. In fact, some workers leave because of better career opportunities or benefits, others because of problematic managers, or still others because of unfriendly company culture. 

There are countless reasons for employee turnover, but they all mean the same thing - there are problems with the way your company manages or looks after its employees. We will go through the possible causes in detail to help you identify what's happening and suggest practical ways to remedy it.

There are, of course, certain areas where high staff turnover is an inherent part of the job - such as customer service and help desks in particular. In these cases, it makes no sense to focus on staff retention, as it is only natural that people working in these positions will get tired and move on and change jobs after 6-12 months.

As for the industries that are characterised by higher employee turnover rates, we have found some interesting statistics especially for you. Transportation (59%), construction (68%) and retail trade (69%) are the three industries with the lowest employee retention rates and the greatest need for new hires, respectively, according to the Bureau of Labor Statistics (BLS). The more solid ones include finance and insurance (25%) and information technology (44%). 

What are the Main Reasons for High Employee Turnover Rate? 

The reasons for a high annual turnover rate are very different.  

Very often the culprit is a short and poorly thought-out onboarding that does not prepare the employee for the new job, but rather discourages him and makes him feel out of place. Another example is the high monotony of daily tasks and the lack of challenges - and especially the fact that managers do nothing about it. Faced with a lack of ambition and boredom, it does not take long for people to get off track.

One of the most important reasons, however, is the daily interaction with staff and the general attitude towards the team.  

If the supervisor is a toxic person, prone to micromanagement or unable to clearly communicate goals or resolve conflicts - in this case, blaming low performance or lack of Tuesdays for the high number of quits will not help. Let us examine this a little more closely, shall we? 

Cause Number 1: Bad leadership

Managers who set excessive workloads or deadlines, claim credit for team successes and micromanage their staff are bad leaders. This leads to employees not trusting their boss and, over time, beginning to despise their jobs and look for a better opportunity. In this scenario, the company would have had the ability to stop the employees from leaving and it is a pity that they did not manage to hold the manager accountable and achieve this. 

Cause Number 2: Unfair pay

According to a 2019 report, one of the major reasons for American employees quitting is looking for a greater better compensation (25%). There is not much between the lines. Employees need a decent wage and the possibility of frequent raises. If they are underpaid, they lose interest and dedication to their daily tasks, develop a bad attitude towards the company and leave when a better job comes along. 

Cause Number 3: Overwork

Lack of proper work-life balance and burnout can occur when employees are expected or feel compelled to work long hours, overtime, or avoid taking days off.  Declining in mental and physical health, their performance and motivation fall too until eventually, they are unable to work at all and leave the company. Unfortunately, all of this comes from a lack of support and understanding from leaders. 

Cause Number 4: Toxic Work Environment

As per the analysis done by Human Resources Management’s, 57% of employees say that not only do they feel drained after work, but that toxic culture magnifies it. Every worker should be able to feel comfortable and supported at work. Unfortunately, the negative work climate causes stress levels to skyrocket - employees' health and performance deteriorate until they eventually leave the company. 

How to Reduce Employee Turnover at Work?  

How to reduce employee turnover? 

This is the question many employers are now asking themselves. As the market has shifted to the employee, there are usually more vacancies than people willing to accept the offer. Or if they accept the offer and after a few months - for the reasons mentioned above or others - no longer want to stay there, it is relatively easy to find a more lucrative and demanding counter-offer. And the fact remains that  costs of high employee turnover and onboarding a new joiner are high.  

This is why it is so important to focus on the long-term retention of your employees and create an environment that supports the team and allows them to grow, work and feel accepted. 

Step 1 - Take care of the alignment and onboarding 

Although not talked about much, the first phase of hiring process is the most important. Focus on picking the right people right at the beginning so they fit well with the company culture - and are more likely to stay for the long term. It's better to be selective now than to regret it later. Invest in effective and personalised onboarding that introduces employees well to their position and makes them feel well looked after and competent. You would rather stay in a place where you are helped to find your way around the company, would not you? 

Step 2 - Communicate goals, roles, and responsibilities 

Also, right from the very start of an employee's cycle in the company, talk openly about the responsibilities and tasks for each position and person. People need to know what is expected of them so that they feel part of the team and are not taken advantage of. Always check that employees are only taking on tasks that fall within their remit and that they are not being given something over their heads that exceeds their skills and competencies. 

Step 3 - Study employee satisfaction and act 

Remember that a practical, well-designed satisfaction survey is essential, not optional - it can work wonders! Conduct them regularly, e.g. every three or six months and complement these surveys with frequent meetings about what is happening in the organisation. The flow of feedback should go both ways - give honest feedback regularly so that staff know where they can improve and where they are valued - but above all, listen! Try to understand staff perceptions and needs, enhance processes that make their work difficult, and act when toxic behaviour occurs. 

Step 4 - Provide work autonomy and creativity 

Appropriate incentives at work and the opportunity to use creative thinking and skills are other elements necessary to improve employee retention. Routine and boredom destroy productivity very efficiently. Do not restrict employees but give them the chance to propose and communicate their own new solutions. Ask them how they can add value to the company's operations, because it is the first line that has the most authentic and practical approach. They just need an extra boost and care to remain engaged and productive every day.  

Step 5 -  Be competitive 

It's crucial not to remain in the comfort zone, but to constantly strive to upgrade processes, staff development or performance. There can always be a company that can do better, so don't sleep! Watch the market, offer new, up-to-date and attractive benefits and trainings. Most companies pay for medical care but don't offer psychological care? Be better and offer regular support from a psychologist! Find new ways to reward your employees, such as on-site lunches or outings, because everyone enjoys new things and surprises. 

Step 6 - Build powerful relationships in the team 

This is a game-changing matter for both the dispersed teams working from home and the onsite crews. Make building healthy and lasting relationships a priority. When we like our team and trust the people around us, we stay with the company longer, feel connected to the workplace and feel good about ourselves in general. Hold regular meetings, team building and sporting events - do not underestimate this, it is the basis for long employee retention. 

Step 7 – Help employee reach their full potential 

This is the last point, but by no means the least urgent. Take special care of career development plans to help employees achieve their goals. If you want to reduce the employee turnover rate in your company, you should clearly communicate development paths, possible promotions and training opportunities. Perhaps create a shared Google file or use an appropriate platform for such items? No one works in order not to grow and stand still. Define what each person needs to do to develop and learn something new.  

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High Employee Retention Within Your Fingertips  

There is no golden rule when it comes to building employee engagement and long-term dedication of your staff. You need to implement a comprehensive strategy at different levels - social inclusion, rewards, career development, leadership and communication culture. But it pays off! Do you want to promote employee retention and counteract rising staff turnover? Do you need help here? 

Grow Uperion's professionals can assist with our gamification platform that fosters integration, makes trainings more interesting, and reinforces motivation and sense of purpose in the workplace.