What you need to know about Employee Turnover

WHAT IS IT?

Some people refer to it as “employee attrition”, others call it “churn” or “staff turnover”; essentially however, it relates to the number of people leaving an organisation. It’s usually expressed as a percentage of the total number of employees, over a specific timescale, mostly during a 12 month period.

There’s no universal number that all organisations should aspire to, as it will differ across industries and company sizes. Some attrition is good and considered healthy, however high attrition can impact productivity, morale and ultimately stunt business growth. Typically a lower number is better, around 10-20%.

WHY SHOULD I CARE?

High turnover can cause a number of problems for companies and the impact of these issues will depend on how bad the problem is and how long it’s been going on for.

When your people leave, their knowledge does too.

"Simon used to handle those queries, I've no idea who's looking after that now he's gone"

Instability, low trust, unhappiness.

"I'm not enjoying my job and now everyone else is leaving, maybe I should go too..."

Overwhelm.

“We have two vacancies and are onboarding a new employee; there’s only 4 of us and we can’t handle all the work - we’re well above our capacity.”

Clients get pissed off.

"We've had 3 Support Engineers in the past 4 months; they don't know enough yet to help us and we can't keep up"

Projects get delayed.

"We can't get an MVP together because our project cycles are constantly interrupted by leavers and new joiners"

Your reputation becomes a disadvantage.

"Why would I go and work there, have you seen their Glassdoor reviews??" "They came and pitched to us but I heard they have a revolving door of staff and we want to partner with a company that's more stable."

The money.

Can you really afford to be losing upwards of £20,000 per vacancy on something that's entirely preventable? What could you be investing that money in instead?

OK BUT WHY ARE MY PEOPLE LEAVING?

Generally speaking, high voluntary turnover means that people are dissatisfied with something that is happening (or not!) in your business, and are leaving. Typically it’s because there’s something up with one, or a combination of the following:

The Work:

over/underworked
no development
limited progression
micromanagement
limited autonomy
unclear expectations & deliverables

The Company:

culture
office location
senior leadership
no sense of belonging
lack of understanding on how they contribute

The Reward:

Money isn’t always the primary motivating factor, but it can negatively impact motivation and engagement if the other stuff isn’t great either.

WHAT DO I DO?

Measure it

If you know what it is, you can understand how your turnover rate compares to similar businesses in your industry. And once you start making changes to help, you’ll be able to see your turnover % improving over time!

Understand it

The attrition % on its own is unlikely to be of much use to you. Delve into the data a bit deeper and look at: voluntary and involuntary attrition, attrition by department or geographical area. Are your people staying for 1 year or are they leaving before they hit 6 months service? Are there particular departments, teams or managers with engagement or retention issues?

REALLY understand it!

So you’ve got unhappy employees and high turnover but don’t know why? Data will tell you one thing but you need to really understand frustrations, and listen to opinions and feedback. Use a variety of opportunities to gather qualitative information and add insight into the data you’re seeing: Exit interviews Stay interviews Onboarding feedback Manager 1-1s Team Meetings

These things should be happening as a matter of course in your business; if they’re not, they definitely should start ASAP! They each allow you and your managers to listen to what your employees are saying and how they’re feeling.

THEN WHAT?

Take action! Your people and you will want to see results. Be aware though that there is no one-size fits-all or magic wand solution to your employee retention and high turnover. It will really depend on what feedback and information you have gathered from your listening exercises.

Here are some things to consider for each stage of the employee journey:

Recruitment

Clear job description indicating responsibilities and what great performance looks like.
Slick recruitment process, structured interviews with relevant selection criteria and fair scoring.
Don’t sell the dream, be realistic with your candidates!

Onboarding/Induction

Allow people the time to assimilate and provide an onboarding plan.
Have them meet key people (stakeholders, senior leaders, key collaborators).
Arrange for a buddy if possible.
Let your newbie know how their role helps your business make money
Let them know what they can do to get up and running asap.

Probation/First Year

Set expectations of performance for both the probation and first year.
Explain what great performance looks like.
Provide and seek to receive meaningful, constructive feedback.

Reward

Ensure your benefits are relevant to your people and that they are of use; you don’t have to spend thousands for these to be effective.
Don’t say you offer “competitive pay” if you actually don’t. Benchmark your salaries internally, as well as externally.
If your people have variable pay or other incentives (e.g: commission, stock options), make sure they know what these are!

Performance Management/Employee Development

Regular 1-1s
Discussions around aspirations and career goals
Provide opportunities for development.

Ongoing

Doing the basics beautifully; all people processes and policies support the employee through their journey, providing an excellent employee experience.
Handle any issues early on, fairly, consistently and with discretion.
Your people need to see and feel the company values being played out in all interactions. Do as you say!
Communicate with your people; whether it’s about how they continually contribute to the company’s success, or asking for ideas and feedback on improvements and new ways of working. It’s important to involve your employees and give them a sense of belonging.

THERE YOU HAVE IT!

I appreciate that this can be a lot of work and can take time to do well.

Break it down into manageable chunks and go with the MVP rather than a “big bang” approach to indicate you are committed to taking action.

Whatever you do though, it’s important that:

You put efforts into the things that matter (e.g: if people feel underpaid, address pay concerns, don’t look at providing medical insurance!)
You balance the commercial realities of your business and don’t commit to expensive interventions. Remember, you don’t need to spend anything at all!
You have managers/leaders who are competent and committed to properly listen to their people, and improve the status quo. This is a team effort and shouldn’t be the responsibility of one individual.
You communicate with your employees; let them know what you’re doing to address their feedback. Let them know you value their opinions and suggestions and communicate new initiatives with the positivity they’re intended.