Does Employee Turnover Really Matter?
March 21, 2023
Quick answer: definitely yes. Employee turnover is an important measurement for small businesses and SMEs to track and understand. It is the rate at which employees voluntarily leave or are terminated and replaced in a business. This metric can help employers identify problems within their company and take steps to improve employee retention. High employee turnover rates are costly, as it takes time and money to recruit, hire, and train new employees, while low turnover rates normally indicate a healthy work environment that encourages employees to stay with a company for longer periods of time. Understanding employee turnover can help owners and managers of small businesses and SMEs make informed decisions about their workforce and ensure that their businesses remain competitive.
Low Employee Turnover
Low employee turnover is an essential ingredient for long-term business growth. It helps a business achieve success by maintaining continuity in operations, reduces costs associated with frequent recruiting and training of new employees, and improves overall employee morale and job satisfaction. All of this leads to greater productivity levels and better customer service while high employee turnover does just the opposite...decreased productivity, increased costs, and decreased levels of customer satisfaction. Having experienced employees with a background knowledge of the business and its products or services is essential for making informed decisions regarding operations, sales, and customer service.
Tips to Reduce Turnover
Employee turnover can be a major issue for any business, but it doesn't have to be. With the right strategies and tactics, a business can reduce employee turnover and ensure that its team as a whole is happy and productive. This does not happen automatically. Management must work to create a positive work environment, provide meaningful benefits and incentives, and offer training and career development opportunities. While it might be easier in certain respects for a larger business to provide more benefits, training, and job advancement, a smaller business can still strive to create a positive work environment, closely mentor employees, and provide opportunities to accept additional responsibilities as soon as possible through delegation and group leadership.
Use Technology to Manage Retention
Technology can, also, be a great tool to help small businesses combat low employee retention rates. By leveraging technology and gathering data related to departing employees, managers can:
· better understand the reasons behind employee turnover
· help identify areas where employees are most likely to leave
· develop strategies to reduce turnover
· streamline processes to reduce time spent on mundane tasks giving employees more time to focus on important work and feel more engaged in their specific roles and job functions
Encourage Employees to Stay
When employees stay with the same company for a long period of time and get to know co-workers better, they naturally develop strong relationships with their colleagues. This encourages team building that further strengthens the bond between employees and creates a positive work environment and business culture.
Rather than having a revolving door of employees in and employees out, it is essential for a business to focus on creating an inclusive culture that promotes job satisfaction and encourages employees to stay with a company. All businesses regardless of size should concentrate on lowering employee turnover. There are definite rewards for improving employee retention.