Everything You Need to Know about Employee Turnover

Everything You Need to Know about Employee Turnover

Like any other business, you’ll have to deal with employee turnover at some point. It’s one of the most common struggles every organisation of every size and industry has to face. High employee turnover often results in higher costs, loss of productivity and creates a huge impact on morale. With this, improving employee retention is a vital aspect that employers should prioritise.

What is Employee Turnover?

Employee turnover, also known as staff turnover, refers to the number or percentage of talents an organisation losses overtime. These positions are filled with new employees and the organisation welcomes the new staff. Employee turnover rate isn’t just about employees’ behaviour, it’s more of an indication of an organisation’s overall working condition. For employers who wish to see a much accurate estimate of the cost of hiring, measuring the employee turnover rate can be extremely useful.  

Two Main Types of Employee Turnover: Voluntary and Involuntary

Employee turnover can be a result of many different things. As such, it can also affect an organisation in many different ways. To successfully manage your retention efforts, understanding each type of employee turnover and its contributing factors is necessary.  

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

Voluntary turnover happens once an employee decides to leave a company of their own accord. In most cases, the effects of voluntary turnover is usually more expensive for a company as it involves the loss of high-performing employees. Furthermore, it leaves a huge gap in the organisation which requires to be filled either with an internal or external candidate. Unfortunately, filling these roles is not easy especially if they require technical skills. Finding the best candidate for the role can be costly and time-consuming. 

Voluntary turnover often includes:

  • Better job opportunity from another company
  • Internal transfer
  • Job dissatisfaction
  • Relocation
  • Retirement

On the other hand, involuntary turnover happens when an employee is terminated from a position. Depending on the current status of the company, involuntary turnover can either be good or bad. For instance, terminating an employee due to tardiness or violation of company policies can cause a beneficial effect on the organisation in the long run. Layoffs, on the contrary, are often caused by poor management or financial difficulties.  

How to Calculate Employee Turnover?

Employee turnover rate calculation is pretty straightforward. 

# of employees who have left / average # of employees x 100 = average employee turnover rate 

The average number of employees can be computed by

# of employees at the beginning + # of employees at the end / 2

For example, if an organisation employs 100 employees and 15 of them have been fired or have left the company, the turnover rate would be 15%.  

Once you have calculated your average employee turnover rate, the next thing you have to do is to benchmark it versus the industry’s average rate as well as your previous years’ rates.

How to Reduce Employee Turnover?

How to Reduce Employee Turnover?

Any business can reap various economic benefits by reducing the average rate of employee turnover. One essential thing you can do is to make more efforts to retain well-performing employees. Among others, these people are the organisation’s most vital assets. Thus, keeping them happy and content should be the company’s top priority. 

  • Compensate your employees and improve the benefits you offer

Apart from a comfortable work environment, employees are looking for an organisation that knows how to value their employees’ presence and contribution.  As such, making a conscious effort of recognising their work and their success can be of great help. Compensating your employees, offering rewards and improving the benefits you offer can surely increase employee loyalty.

  • Ensure a work-life balance

In any workplace, maintaining balance is clearly important. Employees who constantly have too much work on their plates often feel that there aren’t enough hours each day to finish their jobs. For these individuals, getting bogged down with work isn’t something that will make them feel satisfied and motivated, but rather, it would lead to higher stress levels or even worse, employee burnout.

  • Use pulse surveys to get a thorough feedback

How do you know if your employees are genuinely happy and satisfied at work? One of the easiest, most effective techniques is to use pulse surveys to get appropriate and thorough feedback. 

  • Invest in your employees

To improve employee retention, investing in your employees is a must. Providing them with adequate career development opportunities, for instance, can help prove that you truly care for your employees’ growth. In turn, promoting development will also improve your workforce, increasing business productivity.



Like any other challenges in an organisation, employee turnover is a common issue that usually comes with causes and symptoms. Fortunately, it also comes with a list of efficient solutions that can help businesses mitigate this problem and stay ahead of their game.  

Planning to invest in a fully cloud-based CRM system?

Contact us at today 8687-8143 for more details.