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6 Main Causes of High Employee Turnover Rate

Workers on the move

According to a national survey, in 2015, U.S. employers from different industries (28,000 organizations), reported that the average total employee turnover rate was 16.4 percent. This is slightly higher than what was reported in 2014 – 15.7%.

Employee turnover can be costly for organizations. In fact, according to a 2014 ERE Media article, the estimated cost of replacing employees would be at least:

  • $72,000 to replace six entry-level employees
  • $96,000 to replace four mid-level employees
  • $72,000 to replace two senior employees

Therefore, the lowest estimated cost of replacing just 12 employees would be almost $250,000. This would cover costs for recruiters, interview costs, training costs, and even lost productivity costs.

What are some of the main causes of high employee turnover rates and how can employers avoid them?

 

1.  Lack of communication between management and staff

Many times, managers are promoted because of their technical skills and/or how they get results which are beneficial to the company. Unfortunately, this does not automatically mean they have people skills.

Ideally, managers should have a natural ability to connect with people, but unfortunately, this is not always the case. Therefore, managers and supervisors should be given adequate training in business communications to ensure that there is a clear and honest exchange between staff and management.

 

2.  Work-life imbalance

These days, most employees are actually working multiple jobs compared to the time before the recession. Sometimes managers may tighten budgets to increase efficiency and assign more tasks to workers instead of hiring additional staff. This results in overworked individuals who are forced to choose between work and family or personal life.

Employees should not be forced to choose between a personal and professional. Tasks should be distributed fairly among workers and they should be given adequate time to finish their jobs.

 

3.  Employees feel undervalued

When valued employees are overworked, not recognized for their efforts, and placed under managers who do not have adequate interpersonal skills, the chances that they will eventually seek new employment quickly increase.  Every individual wants to be recognized and rewarded for a job well done.

Recognition does not always have to come in the form of money. Showing sincere, genuine appreciation for an employee’s efforts is the respectable thing to do. In fact, this will motivate workers to become more involved and to always provide an excellent quality work.

 

4.  Lack of appropriate training

This is a major concern for younger workers. The millennial generation expects to be involved. They prefer to have open communication with their managers and they want to develop new skills and improve the current ones they already possess. Even if they lack experience in certain areas, they make up for it with high levels of energy, technological skills and other areas of knowledge that their managers may not have.

 

5.  Lack of growth opportunities

When employees feel trapped in jobs that do not seem to have any opportunity to grow, they will most likely leave the organization.

If employers make the effort to provide proper training and help workers develop and take on new skills and responsibilities within their current position, these employees will have more incentive toward company loyalty.  These efforts will demonstrate that their employer is positioning them for future advancement within the business.

 

6.  Low salary increase

Although not always the top reason why employees leave, the recent decrease in many salaries is also a major cause of high employee turnover rate.

The recent recession has caused several businesses to slash their budgets and as a result, raises are either small or non-existent. However, since the economy has improved markedly, employees are expecting higher compensation.  Don’t wait for the employee to ask for a raise in pay.  This will only make it easier for them to consider leaving for a better offer at another organization.

Job door - enter-exit

Keeping these concepts in mind when dealing with your staff, no matter how large or small, will considerably increase your chances of building a loyal and steadfast group of workers.  Your most valued employees are worth investing in, and bringing out their best qualities will only reflect positively on your company as a whole.

 

By Fred Coon, CEO

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