Did you know that the average employee tenure has decreased from 4.6 years to 4.2 years? And that’s just in the last few years! This means that more and more employees are leaving their jobs, which can lead to a lot of turnover costs for organizations. In this blog post, we will be discussing higher employee turnover and its causes. We will also look at some data and statistics on employee turnover, as well as successful retention strategies to reduce costs. Finally, we will introduce Mantra Care EAP – an Employee Assistance Program (EAP) that can help reduce your organization’s turnover costs.
Understanding Employee Turnover
Employee turnover is when employees leave their job, voluntarily or involuntarily. This can happen for a variety of reasons, such as retirement, getting fired, or quitting. When an employee leaves their job, it costs the organization money in the form of training and replacement costs. Additionally, high turnover can lead to a decrease in morale and productivity.
How Employee Turnover Is Calculated
Employee turnover is usually calculated as a percentage. To calculate it, you take the number of employees who left in a certain period (usually one year) and divide it by the average number of employees during that period. For example, if 100 employees left in one year and the average number of employees during that year was 200, the turnover rate would be 50%.
Why Organizations Must Take Steps To Reduce It
There are a few reasons why organizations should take steps to reduce their employee turnover.
- Increased costs. The average cost of replacing an employee is about 21% of their salary. So, if an employee makes $50,000 per year, it would cost the organization $21,250 to replace them.
- Decrease in productivity and morale. When employees see that their coworkers are constantly leaving, they may become discouraged and less productive.
- Difficult to maintain a consistent level of customer service. If you have a high turnover rate in your customer service department, your customers will likely notice and may take their business elsewhere.
- Failure in knowledge retention. When employees leave, they take their knowledge and expertise with them. This can make it difficult for the remaining employees to do their jobs effectively.
Listing Top Reasons Behind Higher Employee Turnover
Now that we’ve looked at some of the reasons why turnover is costly and organizations should try to reduce it, let’s look at some of the top reasons behind higher employee turnover.
Low Wages: Employees may look for other jobs if they feel they are not being paid enough. Additionally, if employees are not given raises or bonuses, they may also look for other opportunities.
Unhealthy Working Conditions: If the working conditions are unhealthy, such as a hostile work environment or dangerous job tasks, employees may start to look for other jobs.
Lack of Training And Development Opportunities: Employees want to feel like they are constantly learning and growing in their roles. When they don’t feel like this is happening, they may start to look for other jobs.
Unclear Career Path: Employees want to know that there is potential for growth within the organization. If they feel like they are stuck in a dead-end job, they may start to look for other opportunities.
Poor Work/life Balance: Employees want to have a good work/life balance. When they feel like their job is taking over their life, they may start to look for other jobs that offer more flexible hours or remote work options.
Lack of Recognition And Appreciation: Employees want to feel like their hard work is being noticed and appreciated. When they don’t feel this way, they may start to look for other jobs where they will be more valued.
Poor Communication From Management
Employees want to feel like they are kept in the loop and that their managers are approachable. When communication is poor, employees may start to feel like they are not valued or appreciated, which can lead to them looking for other jobs.
Data And Statistics
Let’s take a look at some data and statistics on employee turnover.
- Overall turnover rate. According to the Bureau of Labor Statistics, the turnover rate for all workers was about 20% in 2018. This means that, on average, one in five employees left their job in 2018.
- Variation in turnover rate. The turnover rate also varies by industry. For example, the hospitality industry has a high turnover rate due to the nature of the work. Additionally, industries that are experiencing growth or decline may also have higher turnover rates.
- Increase in job dissatisfaction. One survey found that the number of employees who quit because they were dissatisfied with their job increased from 19% in 2014 to 33% in 2018. If employees are not satisfied employees may look for other jobs.
- The turnover rate for younger workers. The turnover rate is usually highest for younger workers. For example, the turnover rate for 16- to 24-year-olds was about 32% in 2018. This is likely because younger workers are more likely to be in entry-level positions and are still exploring their career options.
- Average cost and average length. According to the Society for Human Resource Management, the average cost of replacing an employee is 21% of their salary. Additionally, a study by the Work Institute found that the average length of time an employee stays with a company is just under four years.
Successful Employee Retention Strategies To Reduce High Turnover Costs
Now that we’ve looked at some of the reasons behind higher employee turnover, let’s discuss some strategies for reducing it.
- Create positive culture. A positive work environment can go a long way in reducing turnover. Employees who feel appreciated and supported are less likely to leave.
- Encourage open communication. Finally, encourage open communication between you (HR leaders) and your employees. This will help to identify any issues early on and prevent them from becoming bigger problems.
- Improve communication between managers and employees. This can be done by holding regular meetings, sending out surveys, or having an open-door policy.
- Offer competitive wages and benefits. This will help to attract and retain employees. Additionally, you can offer bonuses or raises to employees who stay with the company for a certain amount of time.
- Provide opportunities for advancement. This could be in the form of training programs or development plans. By providing these opportunities, you’ll show employees that they can grow within the company.
A Word From MantraCare Wellness
Employee wellness programs are the key to improving employee motivation, productivity, and retention. At MantraCare Wellness, we have a team of health experts, counselors, and coaches who serve corporate employees with 10+ wellbeing programs including EAP, Employee Diabetes Reversal, Corporate MSK, PCOS, Employee Fitness, Corporate Yoga, Employee meditation, and Employee Smoking Cessation.