Employee turnover is costing you more than you think. In addition to candidate sourcing, screening, interviewing, onboarding, training, and taxes, expenses related to reduced employee engagement, lost productivity, and burnout quickly add up.
Common Causes of Employee Turnover
These factors typically cause employee turnover:
- Employee and role mismatch: The employee is under- or overqualified, struggles to complete the work, or desires more challenging responsibilities.
- Unreasonable workload: Employees must stay late or take work home to complete on time.
- Micromanaging: Telling employees when and how to complete work lowers job satisfaction.
- Lack of recognition and rewards: Not acknowledging and incentivizing contributions and results encourages employees to find other employers.
- No advancement opportunities: Employees will find jobs with other companies that offer skill development and career progression.
How to Calculate Your Employee Turnover Rate
Understanding how to calculate your employee turnover rate and how to reduce it helps put money back into the budget. Use the following equation to calculate your employee turnover rate:
- Take the average number of employees leaving per month.
- Divide by the average number of employees at a given time.
- Multiply by 100.
- The answer is your monthly employee turnover rate.
For instance, assume you have an average of 4 employees leaving per month and 40 employees at any given time. Divide 4 by 40 to get 0.1, multiply by 100, and get a 10% turnover rate.
Tips to Reduce Employee Turnover
These methods can lower employee turnover:
- Hire the right employees: Ensure candidates fit the requirements, understand the role and expectations, and fit with company culture.
- Provide attractive income and benefits: Competitive salary ranges, customizable healthcare, a retirement plan with company match, generous paid time off (PTO), financial education programs, paid family leave, and tuition assistance are in demand.
- Offer flexibility: Remote or hybrid roles, a flexible schedule, and PTO support work-life structure and employee wellness.
- Prioritize employee recognition and rewards: Encourage managers to discuss specific employee contributions and their organizational impact. Include a bonus, pay increase, or promotion when appropriate.
- Offer professional development: Include customized career progression plans, guidance, resources, and support.
Partner with a Recruitment Firm
Corps Team can help you hire well-matched talent to improve retention and reduce turnover costs. Connect with us to find out more today.