No one is expected to stay working the same job forever. Even in careers where people hold the same title throughout their lives, it's common for employees to move between companies in the same industry. Employee Turnover is an umbrella term for employees leaving their current position, be it to another position in their company, a new company in the industry, a new industry, or no job at all. It can be anything! Employee turnover tracks individual people moving through the working world. Companies can track their turnover rates to better understand employee satisfaction and workplace trends. A high turnover rate might relate to problems within the company that are driving people to leave.
Employee turnover is broken into voluntary and involuntary turnover, and understanding the causes of each helps identify opportunities to increase employee retention and improve company culture.
Employee Turnover: Voluntary and Involuntary
- Voluntary Employee Turnover occurs when an employee willingly leaves their position. Common causes include relocation, education, personal reasons, changing positions or careers, and dissatisfaction.
- Involuntary Employee Turnover occurs when an employee is forced to leave their position. Common causes include layoffs, firing, and the end of a temporary job.
While the majority of turnover is voluntary, the balance between the two and the specific reasons employees leave provide valuable insights into workplace dynamics and organizational health. Every company has its own ideal turnover rate, and figuring out that sweet spot helps analyze whether the current turnover is at a healthy level. High turnover rates might be a symptom of employee dissatisfaction in the workplace.
Employee Turnover: Effects
Certain aspects of employee turnover are easily quantifiable, while others are more difficult to put to paper. A high turnover rate affecting company morale and cohesion might also mean there are fewer senior employees in the company that have higher salaries and benefits packages, reducing payroll expenses. If a company is known for its layoffs, they might inspire increased short-term productivity as employees, fearful about losing their job, work harder to stand out.
A dangerously high rate of employee turnover can sometimes go undetected in a company if they are focused on the numbers and not company morale and cohesion. Teams take a toll when members leave. Productivity dips as remaining members take up the slack or new employees are trained. A high rate of employee turnover can, however, be beneficial for companies in the short term. Fewer employees save them money. Hiring is a future cost, whereas voluntary or involuntary turnover is an immediate gain.
For a company, high rates of employee turnover can hinder productivity, decrease employee satisfaction, and lead to increased future hiring costs.
For employees, the decision to leave a company is often very complicated. Voluntary turnover happens for a lot of reasons, including:
- Career change. Employees change fields to pursue other jobs. Some go back to school, others go straight to another job.
- Family/personal necessity. Any number of family or personal factors might inspire an employee to leave their current post.
- Job dissatisfaction. Here is where companies have the most agency. Employees who are unsatisfied with their jobs are more likely to look for employment elsewhere.
An abundance of employees leaving due to job dissatisfaction is a big problem within a company. Unaddressed, high turnover driven by job dissatisfaction breaks down morale and productivity, whether due to a toxic work environment, high-stress roles, poor management, or other systemic issues. Turnover driven by dissatisfaction becomes a significant issue when it dominates the reasons employees leave.
When is it time to leave your job?
The brain pushes and pulls, sometimes tempting you with the sweeter and greener grass in another pasture, other times locking you down with the fear of the unknown and the uncertainty that comes from entering the job search. If you’re feeling restless and wondering if it’s time to move on, take a moment to think carefully about your decision. What specifically is driving your desire to seek something new? Could there be opportunities to address those challenges and improve your current situation?
A little investigation into what is driving employees to leave pays great dividends. Is there a specific problem within the company? Investing energy and resources into pinpointing and resolving problems can prime employers and businesses to achieve and sustain optimal health and productivity. Good enough, perhaps, to change the equation of whether or not it’s time to leave your job! There are, of course, many great reasons to pursue another career. If you need help coming to that decision, feel free to drop us a line! We are always happy to help make work feel better.