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Seven Factors that Lead to Employee Turnover within an Organization

Employee turnover Factors

Employee turnover refers to the rate at which employees leave a company and are replaced by new hires. It is typically measured as a percentage of the total workforce or a particular department or job role.

There are two types of employee turnover: voluntary and involuntary.

Voluntary turnover occurs when an employee chooses to leave the company, while involuntary turnover occurs when an employee is terminated or laid off by the company.

Employee turnover can be influenced by a variety of factors, including job satisfaction, pay and benefits, company culture, management practices, and career growth opportunities.

High turnover rates can be costly for a company in terms of recruitment and training costs, decreased productivity, and loss of institutional knowledge. Therefore, it is important for companies to focus on retaining their employees and creating a positive work environment.

Employee Turnover Facts and Statistics

Here are some interesting employee turnover facts and statistics:

  • The average voluntary turnover rate across all industries in the United States was 14.6% in 2020. (Source: LinkedIn)

  • The cost of replacing an employee can range from 16% to 213% of their annual salary, depending on their position and level of seniority. (Source: Society for Human Resource Management)

  • The top reasons employees leave their jobs include lack of career advancement opportunities, poor management, and low pay. (Source: Glassdoor)

  • The industries with the highest voluntary turnover rates in the United States include hospitality, retail, and healthcare. (Source: LinkedIn)

  • Companies with a strong employer brand and positive company culture have lower turnover rates than those that do not. (Source: LinkedIn)

  • The average time it takes to fill a job vacancy is 36 days. (Source: Glassdoor)

  • Millennials and Gen Z tend to change jobs more frequently than previous generations, with 43% of millennials and 61% of Gen Z saying they plan to leave their current jobs within two years. (Source: Deloitte)

The Cost of Employee Turnover for an Organization

Employee turnover can be very costly for a company, both in terms of direct and indirect costs. Some of the direct costs associated with turnover include:

Recruitment and Hiring Costs

These include advertising job vacancies, paying for job boards or recruiting firms, and the time and effort spent on interviewing candidates.

Training Costs

New employees need to be trained on company policies and procedures, as well as job-specific skills. This can be time-consuming and expensive.

Onboarding Costs

New employees need to be integrated into the company culture, which requires time and resources from existing staff.

Severance Pay and Unemployment Benefits

If an employee is terminated, the company may be required to pay severance or provide unemployment benefits.

Some of the indirect costs associated with turnover include:

Decreased Productivity

When an employee leaves, there is a gap in productivity until a replacement is found and trained.

Loss of institutional knowledge

When an employee leaves, they take their knowledge and expertise with them, which can be difficult to replace.

Decreased Morale

When employees see their colleagues leaving, it can negatively impact their morale and job satisfaction.

Customer Service Issues

When experienced employees leave, it can impact the quality of customer service, leading to decreased customer satisfaction and potentially lost business.

Seven Factors that Lead to High Employee Turnover within an Organization

There following are seven factors that can contribute to high turnover in a company:

1. Poor Management

Employees often leave companies when they have poor relationships with their managers. This can be due to lack of support, guidance, feedback or communication.

2. Low Compensation and Benefits

If employees feel that they are not being paid or rewarded fairly for their work, they may be more likely to leave for a better paying job.

3. Limited Growth Opportunities

If employees feel like there is no room for growth or advancement within a company, they may look for opportunities elsewhere.

4. Toxic Work Environment

If a company has a toxic work culture, employees may feel uncomfortable or even bullied, which can contribute to high turnover.

5. Lack of Work-life Balance

Employees who feel like they are constantly overworked or not given enough time off may feel burnt out and seek employment elsewhere.

6. Boredom or Lack of Challenge

If employees are not given enough challenging work or feel that they are not learning anything new, they may seek employment elsewhere where they feel they can grow and learn.

7. Geographical Limitations

If employees are unable or unwilling to relocate, they may be more likely to leave a company if they feel that there are no opportunities available to them in their current location.

The Value of Training to Minimize Employee Turnover

Training programs can be a valuable tool for minimizing employee turnover. Here are some of the ways in which training can help:

  • Improved job satisfaction: When employees receive the training they need to perform their jobs effectively, they are more likely to feel confident and satisfied in their roles. This can lead to greater job satisfaction and lower turnover rates.

  • Increased productivity: Training can help employees develop the skills and knowledge they need to perform their jobs more efficiently and effectively, leading to increased productivity and better business outcomes.

  • Better employee retention: When employees feel that they are being invested in and supported by their employer through training and development programs, they are more likely to remain with the company over the long term.

  • Improved customer satisfaction: Well-trained employees are better equipped to provide high-quality customer service, leading to increased customer satisfaction and loyalty.

  • Enhanced organizational performance: Companies that prioritize training and development tend to be more innovative and adaptable, leading to better overall organizational performance.

About LMS Portals

At LMS Portals, we provide our clients and partners with a SaaS-based, multi-tenant learning management system that allows you to launch a dedicated training environment (a portal) for each of your unique audiences.

The system includes an embedded SCORM-compliant course authoring tool that enables most anyone to build engaging courses quickly and easily.

We also offer a complete library of ready-made courses, covering most every aspect of corporate training and employee development.

If you choose to, you can create Learning Paths to deliver courses in a logical progression and add structure to your training program. The system also supports Virtual Instructor-Led Training (VILT) and provides tools for social learning.

Together, these features make the LMS Portals platform and content an ideal solution for your corporate training program and to help minimize employee turnover.

Contact us today to get started or visit our Partner Program pages

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