Staff Turnover – Definition, Meaning, Types, Causes, Benefits

Staff turnover is defined as the rate at which the staff in an organization leave the firm at a specific time. The term staff turnover is used to measure attrition, retention, and turnover in a company as compared to others in the industry.

Meaning of staff turnover

Staff turnover is referred to the percentage of employees who have left the firm and are replaced by new staff within a financial year. Every business entity has realized the fact that it is cost-friendly and effectual to keep up your current lot of staff than hiring new ones.

 Whether staff is fired or resigns voluntarily does not matter at the end of the day because in both cases the company has to set up the hiring process once again and this means additional expenses. Staff turnover has a direct impact on the profit margins because the firm is losing revenue and productivity in the interim period.

Types of staff turnover

The various types of staff turnover are

1. Voluntary staff turnover

When a staff choose to leave a firm voluntarily by resigning or quitting then it is known as voluntary staff turnover

2. Involuntary staff turnover

When the employer decides to let go of the employee or in other terms he is fired from his job then this situation is known as involuntary staff turnover

3. Desirable staff turnover

In some cases, a firm either fires or loses an underperforming employee and replaces him with a new hire. This situation is essential for the welfare of the firm and is known as desirable staff turnover.

4. Undesirable staff turnover

When an organization loses one of its top performers for whatever reason, then it leaves a lasting impact on its bottom line. This situation is known as undesirable staff turnover because such a staff is difficult to replace

Benefits of staff turnover

The benefits of staff turnover are as follows-

1. Weed out poor performers

Staff turnover helps to weed out poor performers who are a drain on company resources

2. Improves talent

In this ever-changing world, the pace has become fast with the emergence of new and advanced technologies. It brings forth new challenges as well as opportunities and to meet them successfully; a firm needs staff that can effectively deal with them.

The staff that has been in the company for a long time and have not availed themselves of new training programs will not be able to understand and handle changes successfully. It is better for the firm if they leave voluntarily or involuntarily as in both cases, they can be replaced by new hires that have the necessary knowledge to take the firm forward. The staff turnover in such instances will improve the current talent by integrating with them successfully

3. Staff upgrade

Staff turnover is the best way to upgrade essential positions in the company with new faces who will bring a fresh perspective to the job

4. Minimizes complacency

If you keep something in one place for a long time, then it will start to rot and so is the case with human behavior. If a staff stays in one position for a long time, he starts taking everything for granted and loses his enthusiasm and zeal for the job. He thinks that his skill and knowledge is enough for the job and does not try to take any training or adopt new measures to increase his awareness.

When a company follows the policy to let go of employees through staff turnover who are not giving their best, then it will minimize the habit of complacency in other employees.

5. Is an incentive to perform

The staff turnover is a sign that the company is going to replace stagnant work conditions with employees who can show initiative and innovation at their job. It is an incentive to perform because the staff realizes that if they do not show growth and performance in their work, then their days are numbered in the firm.

6. Stay competitive

When a company hires new employees and let go of the old ones, it brings forth a wave of fresh perspectives and new ideas along with innovative insights. The more former employees have to face stiff competition from the new lot, and this healthy competition proves beneficial for the company.

Disadvantages of staff turnover

The disadvantages of staff turnover are as follows-

• Staff turnover ultimately costs money, time and effort, thus signifying waste of resources.
• Staff turnover leads to new training programs for the new hire that also signifies additional expenses
• Staff turnover adversely harms the morale of the other employees of the firm
• It reduces the efficiency and productivity of the rest of the staff, and this leads to decreased performance in the workplace
• Companies with a high staff turnover rate struggle to fulfill their obligations and meet set deadlines of various projects
• Regular staff turnover increases the workload of the remaining employees
• Consistent staff turnover can signify issues in the working conditions of an organization
• Frequent reshuffling amongst the staff prevents the building and maintaining of a constant work culture
• The company has to direct its resources and efforts to Onboarding and training on a repeated basis which is a drain on the resources for the company
• The staff turnover brings in new employees that need time to grasp the intricacies of the work culture and speed up their efficiency levels. This is a loss of productivity for the organization

Causes of staff turnover

The causes of staff turnover are as follows

• Rude behavior at the workplace – Backbiting, fixing blame, rudeness, bias are some of the crucial reasons that can result in a feeling of mistreatment and resentment in an employee. This type of behavior leads to staff turnover because some employees cannot take it any longer if it becomes a common practice
• Employee engagement – In some companies, the staff does not get the feeling of belonging, and they remain outsiders even after working for a considerable period. Although they seek a challenging role, their ideas are not appreciated, nor do they get enough support from others in the workplace. Employee engagement is of minimum level, and this can lead to staff turnover
• Motivated by better pay – Every person is in the look-out for opportunities that will better their current standings. If an employee is offered a salary that is better than his present one, then he will opt for it and leave the firm. Better pay is one of the leading causes of staff turnover since time immemorial
• Employees get bored – The employees need to be engaged so that they can achieve professional growth. If a workplace does not provide enough opportunities for the employee, then he will be bored in his job profile, and this dissatisfaction will ultimately lead to staff turnover.
• Poor employee management – Poor management techniques, as well as mishandling of employees, lead to staff turnover
• Inadequate people skills, organizational instability and lack of feedback and coaching are essential causes of staff turnover
• If the employee has to face a work-life imbalance in the workplace, it will result in staff turnover
• In some cases, what the job profile says and what it wants are two different things. The mismatch between job expectations results in mistrust and leads to staff turnover
• When the employee feels undervalued because his work does not get due recognition or reward, then his dignity is hurt, and this leads to staff turnover
• When the workload of an employee goes on increasing, but it is not reflected with an increase in a paycheck, then it causes dissatisfaction and leads to staff turnover

How to reduce staff turnover

The different ways to reduce staff turnover in the workplace are as follows-

• Select a good team that will hire the right people for the job. Offer them the necessary training so that they can do their job correctly. When the candidate fits the profile, the chances of blending in the work culture increases. This helps in increasing employee engagement and reducing staff turnover rate
• Do the research and find the best compensation packages that your company can afford and offer. Review and make them competitive so that the employees do not have to leave the firm for greener pastures. When you are offering the best packages compared to other rival brands are giving then the employees will stay in the firm, and it will reduce staff turnover
• Reward quarterly/monthly achievements of your best-performing employees the appreciation along with the reward will encourage further participation and engagement in the activities of the workplace. This will reduce staff turnover
• At the time of employee Onboarding outline a clear path that will show them how to grow professionally and the benefits of staying in the company. Make sure the top brass have such discussions with the employees at least once a year to encourage their engagement in the firm. Let them bring questions directly and try to answer them honestly about the chances of professional growth in the firm. If the employee’s needs are fulfilled in their present job position, then it will reduce the employee turnover rate
• Make sure the company has hired well-trained professionals that can guide the employees towards the right path. When the employees can talk to someone about their problems and find fulfillment in their job, then it will automatically reduce staff turnover
• Encourage employee engagement via flexible work schedules, bonus structures, and additional benefits to reduce staff turnover
• Pay attention to employee needs and offer them leeway in extricating circumstances, so they feel obliged to the company. This will reduce staff turnover
• Creating a satisfying workplace where the employees are appreciated is the best way to minimize staff turnover.