by If you’re in the cafeteria sipping shots of espresso this morning because you were up all night worrying about turnover at your company, you’re not alone. The latest research from 15Five shows that more than 80% of business leaders believe that a decline in employee retention poses a risk to the success of the company. The Great Upheaval has exhausted many executives and HR leaders, and there isn’t enough coffee in the world to solve all the converging talent problems at once.
But when an employee leaves the company, is it always a bad thing? What exactly is the difference between “dropout” and “turnover”? Are some departures inevitable? In this article, we’ll take a look at what it really means when you part ways with an employee, what makes turnover “unfortunate,” and what you can do to ensure you retain more top performers.
What is wear?
Attrition and turnover mean that an employee and a company are parting ways. But it is the circumstances of that game that make these two terms different. When an employee leaves a company due to a natural event or process, this is considered attrition. Examples include:
- Elimination of the job.
- layoffs
- Retirement
- Chronic health problems
- death of employee
Attrition occurs when departures occur as part of an employee’s normal life cycle. When an employee retires, or a specific job is eliminated due to automation or some other industry or business change, this is usually not a major financial concern and can actually reduce costs in the short term in many cases. . Other types of wear and tear are inevitable, and while it’s sad to see someone go, retirement, illness, and even death are a part of life.
What is billing?
Unlike attrition rate, churn can be a more worrisome metric, especially when you see an upward trend. High turnover rates can indicate that problems are brewing and can be a lagging indicator of a lack of employee engagement.
We consider a departure turnover when an employee leaves because they are not happy with their position or because they find something better. Examples include when someone leaves because of:
- bad relationship with boss
- Lack of sufficient recognition
- bad company culture
- Insufficient learning and development opportunities
- inadequate compensation
- Burnout or feeling overwhelmed at work
Turnover is not just a “HR problem”, it is a costly business problem for which everyone in the organization must be held accountable. Replacing someone can cost a company approximately 33% of the employee’s salary. When you multiply that by dozens or even hundreds of employees each year, the cost can be detrimental to business success.
High turnover is costly in other ways, too. Productivity suffers when jobs change, and employee morale can suffer when colleagues and leaders constantly leave. Even the strongest cultures can only withstand a certain amount of employee turnover before the entire organization begins to feel the strain.
Key Differences Between Attrition and Turnover
While attrition and turnover are related and sometimes used interchangeably, they are quite different from an HR perspective. When an employee seizes an opportunity elsewhere, it’s important to consider (and track) the “why” behind their departure. This is quite easy in typical wear cases. Someone reaches retirement age, you throw a party in the break room on their last day, and you check the “retirement” box in your system.
The reasons for turnover can be a bit harder to track down, and you can’t rely solely on an exit interview to tell you the whole story. Some employees aren’t as forthcoming about the real reasons they’re leaving, and in most cases those reasons are complex. That’s why it’s so important to keep your finger on the pulse at all times, not just when an employee is at risk.
When you measure employee engagement and have regular one-on-one meetings between employees and managers, turnover is less likely to catch you off guard. And when an organization has an ingrained culture with regular, real-time feedback loops, issues can be addressed before a great employee puts in their two weeks.
How to reduce unfortunate turnover
While having low retention rates has always been a costly business problem, employee turnover is particularly “unfortunate” when losing top performers. We brought together a panel of experienced HR leaders to discuss this very topic at our HR Hacks for Business 2022 virtual summit. The panelists agreed that identifying your best employees and prioritizing their engagement is critical to retaining top talent.
“Top talent wants a voice,” said Rebecca Edwards, executive director of Charlotte’s Infinite HR. “They understand the value they bring to their organization… They want to make it clear that ‘this is what’s important to me; this is the incentive that means something to me.’ Because when we talk about incentives and things that retain employees, they can look very different to different people. It means to give those [high performers] a voice and making sure their manager understands what they need, and as an organization, giving those managers the flexibility and resources to provide that to their employees.”
By getting regular feedback from top employees before they start polishing their resumes, you can find out what they need for a better employee experience. It’s critical to figure out what’s stopping employees from doing their best work so you can drive the changes needed to create a more engaging, productive, safe, and inclusive environment.
Managers can play an important role in turnover
A bad manager can have a big impact on an employee’s decision to leave your company, just as much as a great manager can help keep them. According to our 2022 Workplace Report, more than half (53.8%) of American workers say a lack of management support is a top reason for leaving a company, while a number still Most (57.6%) say caring management and a good boss are two of the most important factors for them to stay with their company.
HR leaders can play a different (but just as critical) role in retention by identifying what a good manager looks like and developing a plan to upskill managers across the organization to reach that level.
Get the HR Leader’s Guide to Reducing Unfortunately Turnover
While turnover reduction cannot happen overnight, properly designed employee experiences can predict and prevent turnover and ensure that the best employees stay with the organization and contribute to its ability to thrive.
Get the latest guide from 15Five to dive deeper into unfortunate turnover and how to reduce it in your organization.
