Turnover rate is an important factor for all the organizations. Moreover, when an employee leaves the company then it will not only cause of loss of skill. But this will also affect other things like the cost of hiring, recruitment, training and development etc.
So the employee turnover is a major challenge for HR professionals. In this article, we will discuss what is company turnover rate and factors affecting the company turnover rate.
What is Company Turnover Rate
Turnover rate is the percentage of employees leaving the company within a certain period of time. The high turnover rate can be costly to a company. Because employees need to be frequently replaced.
Moreover, hiring new employees is a time taking process and leaving the critical positions of the company open for a long time leave a bad impact on the image of the company.
So it is very necessary that the company should focus on decreasing the company turnover rate.
Factors Affecting Company Turnover Rate
There are various factors that affect the company turnover rate. But in this article, we will discuss only 4 most important factors.
So here is a list of 4 factors affects the company turnover rate.
1. Employee Engagement
Employee engagement is one of the important factors in company turnover rate. If your employees are not engaged then it is sure that your employees will leave the company.
Research shows that if the company has high employee engagement then it will increase the sales by 21% and overall profit by 10%. This will happen because your employees are happy and work as a team to achieve company goals.
Moreover, if your employees are happy then your customers will also leave you positive feedback. Because employees will connect them in a good way.
Employees who invest in their roles are very less likely to leave their job. So to maintain the employee retention rate you should keep your employees engaged.
So if your company retention rate is low then it is the high time when you should think about employee engagement. Moreover, when the best people in the company leave their job then other people also follow them.
If you want to know the ways to increase the employee engagement then you can read this article: Importance of Staff Engagement and How to Improve It.
2. Company Culture
Company culture is an essential part of every business. Moreover, any business cannot be successful without a positive company culture.
Company culture is the environment of the organization in which the employee’s work. If the environment of the company is not good then how an employee can work in that company. So by this, you can clearly see that company culture has a direct relation with the company turnover.
Moreover, good company culture will not only increase the employee retention rate but it will also help in the recruitment process.
Poor company culture involves all the below things.
- Poor Internal Communication: Good communication is an essential factor for every company. Whether the communication is between management and staff, or between the members of a team.
- Bad Managers: If your manager doesn’t have leadership skills then you cannot create a positive environment in your company.
- Office Gossip: Humans love gossips but these gossips are the main reason due to which the company culture disturb. Moreover, gossips are negative, damaging and downright toxic.
- Lack of Flexibility: Flexible is a great way to attract employees. But if your company doesn’t have the work and holidays flexibility then it will affect your company culture and ultimately affect the employee turnover.
Apart from this, there are various other reasons why company culture is important. To know about it you can read this post: 7 Reasons Why Company Culture is Important.
3. Core Values
Core values are the fundamental belief of organization. These core values are one of the major factors that affect the turnover rate. If your company doesn’t have the core values then your employees can not understand what is right and what is wrong. Due to which they might leave the job.
Apart from this, core values also help you and your employees to make quick and good decisions. So if your company doesn’t have core value then the very first step you should do is set up them.
Once you set the company core values then the recruitment process will also become easy for you. You can only hire people who can mix up with your company core values. Core values you set will also help you to deal with difficult customers.
Moreover, the company core values can help you to determine whether you are on the right path to achieve the company goal or you had to change the strategy.
If you don’t know how you can create core values then you can read our this post: 18 Core Values that are Important for Every Company. (Internal link that article here)
4. Motivation in the Workplace
Motivation is the best way to excite your employees in the workplace. However, if you don’t have enough motivating environment then your employees can also leave the job. Because the employees can not develop the will to do the work.
So it is very important for you to motivate your employees to reduce the employees turnover rate. It will not only help in increasing the retention rate but also help to achieve the company goals. As employees will more be satisfied and their efficiency will increase. Apart from this it also provides the benefit of employee development and commitment.
There are various ways through which you can improve motivation in the workplace. But in case if you are not able to do that then you can read this article: How to Improve Employee Motivation at Workplace.
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