Post a FREE Job
Schedule a Demo

How to Minimize Turnover At Your Company

09 May 2016 by

Untitled design (11) (1)Why so much turnover?

While many companies tend to focus more on recruiting, turnover is a big cause for concern nowadays and merits more attention. With big changes happening in the workforce, turnover is becoming more frequent and causing companies more issues. What’s causing all this turnover?

First of all, the workforce demographic is undergoing a big shift. Millennials are flooding the workforce, and are predicted to make up 75% of the workforce by 2025. According to the Future Workplace “Multiple Generations @ Work survey, Millennials expect to stay in a job for fewer than three years. Their wants and needs are different from previous generations, and they are harder to retain. In addition, while Baby Boomers tend to stick around longer, they are retiring and will be retiring increasingly more in the next decade.

On top of these new dynamics, there has also been an influx of contingent workers in the workforce, increased competition for talent, company culture is now a high priority to employees, etc. Multiple factors are all coming together to increase turnover rate as a whole.

What are the costs?

Why is turnover usually a bad thing? Because it is costly. According to SHRM, replacing an employee is estimated to cost somewhere between 90-200% of their annual salary. It is especially expensive when someone leaves an organization within the first 6 months of being there.

However, money is not the only cost of turnover. It can also negatively impact employee morale and engagement, individual and team performance, and knowledge retention. Even if a company with high turnover has some great employees, it will have a difficult time enjoying high performance because of the energy and engagement needed in recruiting.

It’s not all bad

While turnover is generally not very desirable, there are cases in which it could benefit your company. For example, when a low-performing employee decides to leave, this is an opportunity for the company to hire a better performer. Another example is when a highly tenured employee has been in a position for many years, it can be beneficial to bring in new people with new ideas.

At times, turnover can actually boost morale. While it can be exhausting when a position can’t ever stay filled, instances in which low performers leave could make the high performers that remain at the company feel relieved. High performers want to work with other high performers, and don’t like seeing others get compensated the same for doing less work.

In these ways, you can see there is a positive side to turnover. However, it’s still usually best to minimize turnover as much as possible. But how?

Improve the efficiency of HR

Solving the issue of employee turnover falls under the umbrella of HR responsibilities. However, often times in smaller companies HR gets in the routine of spending most or all of its time on basic operations.  While things like payroll, time and attendance, and benefits are necessary to the company, they do not really help drive the business or utilize the true value of HR. On the other hand, focusing on strategic operations like performance, culture, employment brand, satisfaction, retention, engagement, learning and development, etc., helps a business have greater success. So how can HR focus on the more important strategic operations?

According to BambooHR, HR departments need to eliminate the unnecessary. In other words, stop putting time into activities that have been around forever but aren’t actually impacting the organization. Evaluate the ways HR uses its time and determine what the company can do without. Next, organize your data and information to be able to function as efficiently as possible. Third, automate the operational. Use technology to take care of the basics so that HR can do the more in-depth great work. Doing these things will allow the time and energy necessary to elevate the productivity of HR.

After freeing up this time and energy, determine the strategic outcomes that take priority and do the corresponding activities needed to reach those outcomes. Measure the value and impact of your work and solve problems. Your HR needs to think and act like a business!

Turnover is one of the strategic operations that should take priority. By making employees more engaged, both employee satisfaction and contribution increase. And a happy, engaged, productive employee is less likely to leave. So the key question here is how can HR improve employee engagement in order to decrease turnover?

What employees need to be engaged

There are a variety of books and models that explain components of employee engagement and the effects of the presence or absence of these engagement drivers. Looking at what the models have in common, there are some consistent themes to learn from. In order for employees to be engaged, they need:

  • A strong purpose: Employees want to feel that they are involved in something bigger and more important than just earning a paycheck. They want to know they’re making a difference.
  • A good cultural fit: Even if an employee is a hard worker, if he doesn’t align with the company culture, he won’t be happy there in the day to day.
  • Personal/professional development: Most people want to be continually learning and making themselves more marketable. As an employer, you could develop training programs, mentorship programs, and continuing education or training stipends to help fulfill this need. These kinds of opportunities help people progress and feel like they’re moving somewhere.
  • To feel a sense of investment: Whether it be with time, effort, or equity, when an employee is invested in a company he will be more engaged in his work.
  • To feel valued: Receiving rewards and/or recognition for achievements helps employees feel valued and appreciated for their hard work.
  • A sense of winning: A company that essentially keeps score, or knows how they are doing and is having success, helps their employees feel like they are winning.
  • A sense of belonging: When people feel connected to others and feel that they belong, they will be more engaged in their job. Having friends and being part of a tribe or community helps instill a sense of pride.


When these needs are met, employees will have more job satisfaction and will be more engaged in their work. They will in turn be better workers and will stay at a company for longer, thus reducing turnover. Calculate your company’s turnover rate and evaluate what could be improved in your retention efforts.


Much of this information was provided in the BambooHR webinar titled, “How to Manage Employee Turnover.” To learn more, click here.



  • Categories
  • More Quick Reads You Might Enjoy

    WordPress PopUp Plugin
    Share On Facebook
    Share On Twitter
    Share On Linkedin
    Share On Pinterest