101: Diagnosing Turnover
According to data analytics experts at Gallup, the 2017 annual employee turnover rate was 26.3%, based on numbers from the U.S. Bureau of Labor Statistics. With the cost to replace one employee of a company ranging from one-half to two times that employee’s annual salary, it’s a worthwhile practice to review how employers can get to the root of why employees leave.
Observe common trends, advises compensation software and data company PayScale. Questions to ask: Did many of the departed employees report to the same hiring manager? That manager may need to be trained or let go. Did the employees who are no longer with the company all have specific skills? Maybe they are leaving for market opportunities where their skills are compensated more than what your company pays. Have the employees been in the same roles for a long period without promotion? If so, they may believe they need to leave the company to advance.
Pay attention to when they leave, says Workstride, a New York-based channel incentive and employee-recognition firm. Losing top performers, for example, could be a sign of a larger cultural issue, such as ineffective management or a lack of professional-development opportunities. On the other hand, “High turnover among new employees could also signal a problem with the selection, onboarding and training processes,” says Workstride experts, with the right combination of skill and fit imperative for long-term tenure.
Determine why they stay. Iris Ware, chief learning officer with the City of Detroit, points out the process of figuring out employee turnover trends lean subjective and reflective, based on exit data and qualitative feedback. She comes at the problem from a different angle. “I focus on why good employees choose to stay and work to replicate those factors to increase retention,” as opposed to concentrating on why they leave, she told Forbes.com.
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