Staff turnover can say a lot about a company.
Here we will look at both the advantages, and disadvantages of high or low turnover, and what they might mean about your business culture.
What Is Staff Turnover?
There is no number that defines what is high or low, however, the average turnover is around 15% (i.e. for every 100 employees who are employed at the beginning of the year, it is expected that at least 85 will still remain by the end). This can be a good method for businesses to understand whether they have good staff retention or a large turnover of staff.
It is important to note that different industries may have very different averages, so it is beneficial to do research and ensure the rates are applicable to your business. Understanding the rates of turnover within a company can tell you a lot about its culture.
Staff turnover rates can also affect recruitment, for example, how often a company recruits and how much it ultimately costs them to do so.
Advantages and Disadvantages Of Low Staff Turnover
It may seem like low staff turnover is an advantage, but there are also some disadvantages.
The most common reasons for low staff turnover are:-
- A young team, so no significant numbers retiring.
- Employees are willing to stay in the same role, demonstrating a lack of desire to progress in their career or gain additional responsibilities.
- Niche or specialist industry with a lack of opportunity.
- Good benefits and pay mean employees would struggle to match this elsewhere.
- Economic instability – jobs are difficult to find, so a change could be risky.
Some of these reasons may appear positive, but if you work in HR this is still something to be mindful of. Although staff turnover may be low, it doesn’t always mean that staff morale is high. It’s important to ensure that your management and HR team are coming up with new and fresh perspectives to allow the business to progress. Low staff turnover can risk creating an environment of poorly performing employees which can make it hard for talented employees to make progress.
Recruitment And Low Staff Turnover
In relation to recruitment, low staff turnover can be a helpful factor. It’s more attractive for potential candidates who are looking to join the company. It also allows the business to be more selective and only choose the highest quality candidates for their vacant positions.
Advantages And Disadvantages Of High Staff Turnover
High staff turnover could be because of an internal issue like company culture, but it could also be more nuanced than that. There are many reasons for high turnover, for example:
- Poor pay and benefits.
- Seasonal or short-term employment where retention rates are expected to be low.
- Retirement of staff.
- A competitive industry, with employees consistently being head-hunted for other roles.
- Springboarding – someone using a role for experience before advancing their career elsewhere.
- Poor company culture and inconsistent management.
If your business appears to have a higher staff turnover than normal, implementing exit interviews can be a good way to gain insight from leaving employees as to the reason behind their resignations. This will allow your HR and management team to gather information and address any issues that may arise.
Recruitment And High Staff Turnover
A businesses recruitment costs are likely to be quite high where there is a high turnover of staff.
This cost, in addition to new recruit’s salaries, can be a large expense for a business so it’s important to understand and address any issues internally where they are raised. Potential candidates may be reluctant to apply if they are aware of constant recruitment at the same business or organisation.
While ‘growth’ of the business is often used as a tactic to entice candidates, underlying issues are likely to reoccur if they are not addressed.
Organisational Coaching with Inclusive Consulting
At Inclusive Consulting we offer a range of coaching and mentoring services. If your business or organisation is experiencing difficulties in relation to staff, it is important to ensure that you have processes in place (could specify what processes are/are for?) as well as a positive work culture, and great leadership.
We offer the following services which help to address company culture and in turn, improve talent retention:-
Leadership Coaching
We support clients as they work through the inevitable tensions between managing personal and organisational needs.
Leadership Coaching focuses on networking skills, relationship building, strategic thinking, and developing a personal but organisationally attuned, authentic leadership style. We work with current and future leaders to look at the role of the unconscious, and how past relationships can impair the view of current situations.
Organisational Coaching
Building a coaching culture
We work with clients who want to create a coaching culture within their organisation – whatever stage of the journey they may be on.
We provide external coaching services or train internal employees in coaching skills. Then we provide ongoing supervision and development to ensure these behaviours are embedded.
Team building and leadership development
We are accredited to run a team development and strength profiling activity called SDI (Strength Deployment Inventory).
This is particularly useful for helping new teams get to know one another, or in situations where conflict is affecting productivity, morale, or employee turnover.
Organisational Change
We are experienced in working with managers on organisational change programs: coaching through decisions on where and when changes need to be made, drawing on our knowledge of employment law where necessary.
We help in creating employee skill review matrices, reviewing role locations, building selection criteria for potential redundancy, and managing job reduction projects.
To find out more about our coaching and mentoring services, contact a member of our team today.