Overturn the Employee Turnover Issue

Employee turnover is well known as being a top company worry. Time has come to overturn the situation and to make the most of it: turnover is a data. Use it.

A turnover rate is a percentage of employees leaving your company over a given period of time. It cannot be expected to be zero, as it is part of business life, but yet, a high voluntary turnover (initiated by the employee) is a consequence of deeper organizational issues.

In Israel, the tech market initially had a significantly lower voluntary turnover of employees than it is elsewhere. However, the increase of the competition on the market combined to the raise of the offered salaries changed that trend: employees became more willing to change jobs.

Extract from “Human Capital Survey Report 2018”, Israel Innovation Authority – Source: Zviran, 2018.

What are the costs related to turnover?

Employee turnover generates an immediate worry: its direct costs. Such costs include:

  • The amount immediately related to the separation;
  • The cost-per-hire, which refers to the time and resources that have to be dedicated to recruit and train a new employee;
  • And the cost-of-vacancy, which refers to the losses of your business while the position remains vacant.

The damage caused by employee turnover goes way beyond direct costs.

We are talking here about the damage suffered by the remaining employees. What happens when a link of a chain breaks? The whole existing dynamic is shaken, and a vicious spiral can easily take the lead:

  • Not only can the remaining employees be emotionally affected by the departure of a colleague, they are also naturally appreciating the reasons of his or her departure and start identifying. Leaving the firm becomes a concrete option for everyone to consider, in light of their own situation.
  • Such thoughts can affect the productivity of the workforce, especially if added to an increase of the workload due to the vacancy period. This is usually how projects start to stall.
  • The effectiveness of your team has an almost immediate impact on your reputation of the market, which is crucial both from clients’ perspective (as it leads to immediate revenues) and from potential employees’ perspective (as you need a good branding to attract good elements).
  • If not remedied, the situation naturally leads to new departures, and the circle starts again. In term, your global balance simply does no longer exist.

Therefore, in order to minimize the costs related to turnover, you need to take in consideration the aspects of your business causing a high rate of turnover in the first place.

How can you fight the causes of an anchored turnover?

Let’s break the truth open: employees do not fall for toxic company culture anymore. It is easily identified, and immediately represents a sign for the employee pointing the exit door. An employer that does not wish to improve is an employer that people do not see a reason to be loyal to. A toxic company culture only brings drama and gossip to the day-to-day of the employees, and this is not why they came to work with you in the first place.

Here are some guidelines:

  • A manager is a mentor. Someone that employees can look up with respect. Someone they are craving to learn from. This means that you cannot afford you middle management being only figureheads. It is crucial that your management team understands the importance of delegating, teaching, trusting. They need to represent strong figures for your employees who need confidence in their leadership to consider growing in your firm. If not, they will look for a place where they can feel that way.  
  • An employee must be heard. Communication has to be mutual. Employees must be able to ask questions, without fearing being shut down or degraded. Not only one-way communication leads to frustration for your employee, but it certainly diminish his or her abilities to optimize effectiveness, as it automatically leads to loss of time, mistakes and slower process integration.
  • Respect does not mean fear. A working place where the boss is the only one talking during meetings is generally a working place where his or her employees are making sure to never meet him or her in the hallway. Fearing a superior only makes the work culture more toxic, burning the energy of the employees on how to protect themselves, instead of investing this energy for being at their best.
  • Recognize your employees’ accomplishments. They need to know with certainty that their contributions to the company are needed and appreciated; this is the only way for them to actually feel the desire to remain loyal to the company.

  • Do not go to far with your company’s policies. Company’s policies are an amazing tool, learn to use it wisely. They need to represent guidelines that your employees can relay on, and certainly not threats of what would happen if they make mistakes. You do want to stimulate your teams’ creativity and ability to take risks, not having them tightened in rules.
  • Let them see their growth’s perspective. Building a career is a must. Each one of your employees is starting to work in your company with a vision. This vision needs to be enlightened along the way. Make it clear for your employees what are his or her options of professional growth. A lack of opportunities is the number one reason for an employee to decide to move forward.

To summarize: most of the turnover situations are predictable. Ask for your employees’ opinions, require their feedbacks, give them credit and responsibilities, recognize their accomplishments, never stop teaching them and giving them perspective, promote core values such as leadership and teamwork, and this way, build a dedicated team, ready to be loyal to your business.

As a final touch, if your business has suffered a high voluntary turnover for the last few years, you should consider doing exit interviews. Learn from your mistakes, be considerate and at least, break the vicious circle by showing your will to do better.

Your turnover rate is sending a message? Let’s talk!

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