Triple Canopy Media

Why a High Turnover Rate is Harmful and What Companies Can Do About It

Many companies face staffing challenges. It turns out that it’s not only hard to recruit talented people; it’s also tough to keep them. Few things can be more detrimental to an organization’s well-being than high turnover. If your company has a (figurative) revolving door for an entrance/exit, then that’s a sure sign that it’s definitely not functioning as it should. And when employees don’t stick around, this not only adversely affects company cohesion, it also impacts your customers or clients. This, in turn, is going to cut into your bottom line, which inevitably worsens morale, creating a vicious and self-perpetuating circle of underperformance.

For many business owners and operators, it may be difficult to come to terms with the fact that management style can often be a huge factor when it comes to retaining staff. A recent survey on employer-employee relations revealed a very startling but telling truth: A majority of workers reported that, if given the choice, they would actually rather have a better boss than get a pay raise. The abusive boss who screams and throws tantrums may be a Hollywood cliché, but in the real world you’re much more likely to encounter an oppressive micromanager than an overgrown toddler.

Still, whatever the cause, high turnover will devour your company from within. Here are just a few of the ways that it will not only destroy your spirit, but cost you money as well:

  1. Growing pains: Even if, as a recent hire, you’re an expert in what you do and enthusiastic about hitting the ground running, it will still take you a while to get into the swing of things in a brand-new place. There’s formal orientation to go through and adjustments to a new company’s culture. If a high percentage of an organization consists of new hires, then productivity will suffer as all of these recent arrivals simultaneously try to find their way.
  2. Training time: High turnover also has a negative impact on the productivity of the employees who do stick around. That’s because they often end up shouldering multiple burdens. First of all, if there are gaps in the company workforce, then someone has to bridge that divide. That means that some employees will end up working extra hours and may have to tackle projects outside of their assigned departments or formal job duties. Plus, these same veteran employees will eventually have to devote a significant amount of time to training the new arrivals. That inevitably cuts into productivity.
  3. Does anyone know how to…? When people leave an organization, they take their knowledge and experience with them. Maybe some of them were quite thorough when it came to leaving handover notes behind. Still, documents are no substitute for a real, breathing person who can answer questions in real time. If no one at your organization weathered a storm through tough times, that makes it all the more difficult for you to do it in the future.
  4. Putting on the same face: Customers value continuity and consistency. If you get a different person on the phone every time you call an organization that you’re supposed to trust, does that make you feel more or less confident that they have the capability to focus on your needs? And there’s nothing more irritating than having to explain who you are and what you need from a company over and over again each time you call them because everyone you’ve ever dealt with before has left.

Alright, so high turnover is bad, and is likely a symptom of a larger problem within the organization. If you accept that, then the logical next question is: What can a company do to prevent it?

  1. It should be about trust: You’ve gone through the trouble of recruiting, vetting, interviewing, checking, double-checking, training, orienting, and (one hopes) welcoming a new member of staff to your team. And now, after all that, you feel that you have to stand over that person and monitor every keystroke? Save the micromanaging for house-training your new puppy and let the professionals create and manage their own task lists.
  2. Don’t run anyone ragged: Great managers provide their staffs with a clear set of responsibilities, goals, and objectives. Mercilessly piling (sometimes barely relevant) work on employees, even out of perceived necessity, is going to burn your people out. And once they get to that stage, they’ll be looking for the door.
  3. Stay flexible: We’re well into the 21st century now, and in many professional fields the days of rigid in-office hours and cubicle confinement are a thing of the past. Allow employees to take advantage of technological advances to make their work-life balance more balanced, and you might be amazed at how it actually improves both productivity and morale. In this day and age, an employee can attend a meeting without actually being in the room and still be every bit as insightful. Managers who get that, get to keep the best workers.
  4. Invest in your people: There are many things you can do to make someone feel valued within your organization. One of the most impactful of all is to give that person a path to greater professional enrichment and advancement. Encourage your employees to build their skill sets and then create systems and structures to allow them to pursue self-improvement. Plan and fund ways for your workers to enhance their resumes and they’ll feel loyalty to the company. Plus, you can consider this to be your company’s version of the “rising tide lifts all boats” aphorism. If the people who work for you know more, your company knows more, and that’s just smart business. And if you’re concerned about the cost of additional trainings for your employees, you should know that it’s a lot less costly than onboarding new ones!
  5. Listen: This may be the most vital thing that any manager can do to hang on to good talent. Listen! Communicate! It’s no coincidence, perhaps, that the main key to success in a business setting is the same as that in a personal context. Be open, honest, and receptive when it comes to your employees’ concerns, and they’ll feel empowered to share them.
  6. Be the change you wish to see: Some bosses rule by intimidation. That might allow an organization to skate by in the short term. But if you really want to build up your company, nurture your employees, and create a culture of work that actually works, then you should choose inspiration as a motivating tool instead. Even just saying “thank you” to someone on your staff can make a huge difference in shaping attitudes and boosting morale. We all want positive recognition and appreciation. Don’t be stingy with gratitude. You can produce it in-house for free!

Reducing employee turnover isn’t something you do by waving a magic wand over your organization. It’s something that you must live every day; it should be woven into your company culture. Losing staff goes hand-in-hand with losing customers. Don’t find out the hard way.