What is turnover? Turnover refers to the rate at which employees leave a company and are replaced by new employees. Turnover is often measured as a percentage of employees leaving the organization during a period of time, as compared to the total number of employees in the same period.
How does turnover negatively impact business?
- Turnover can be very expensive! It involves expenses related to recruiting, hiring, and training new employees. Additionally, lost productivity and demand on remaining employees during the transition period, as well as the potential impact on customer relationships can also result in reduced employee or client engagement and financial setbacks.
- Disruption to operations: frequent turnover can disrupt workflow, slow or stop existing change management activities, and create instability due to decreased efficiency, team cohesion, and as mentioned above, stress on remaining employees.
- Loss of institutional knowledge: when experienced employees leave, they take with them valuable institutional knowledge and expertise. That loss can have a negative impact on organizational performance, especially if there’s no effective knowledge transfer in place.
How can turnover positively impact business?
- Fresh perspectives: new employees can inject fresh perspectives, innovative ideas, and diverse skill sets into an organization that can lead to increased creativity, adaptability, and the ability to address challenges from different angles.
- Eliminating underperformers: in some cases, turnover can remove underperforming or unproductive employees, creating more opportunities for hiring more qualified individuals who better contribute to the organization’s goals.
- Promoting growth and development: turnover can increase opportunities for internal advancement and career progression for existing employees. When positions become vacant. It allows current staff to take on new responsibilities, learn new skills, and grow within the company.
What are some things that might cause concern related to turnover?
- If you notice that one leader, department, or team has a higher turnover rate than the organization as a whole.
- If you notice that one region has a higher turnover rate than the organization as a whole.
- If you notice that there is a variance between turnover rates based on gender, race, or other protected class.
Does your business track turnover? Do you need support with creating a plan to track turnover and make adjustments to your processes to meet turnover goals? I would love to partner with your leaders to ensure you have the support needed to meet that goal.
To learn more about how I can help support your business and leaders, please go to www.amybolson.com and/or reach out to schedule a free 30-minute consultation.
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Artwork by Nick Fewings
