In 2009 unemployment spiked to numbers that the economy hadn’t seen in years. The rate then jumped again in 2010, by 2011 the rate began to slowly decrease but not by much. Now 3 years later the employment rate is almost back to what it was in 2008. What does this mean for employers – company culture is more important now than ever before. Why? There is a correlation between a good economy and high voluntary turnover rates.
What is Voluntary Turnover?
All turnover is negative because it means time, money and resources were wasted. Voluntary turnover however is typically the type that breaks an employer’s heart, as it is usually talent the employer does not want to let go of. To better understand voluntary turnover, SHRM started tracking trends on employee turnover, after the data was collected they put together a brief where they identified key reasons for voluntary and involuntary turnover. The study revealed as the economy improves opportunities will open up for high performers causing them to consider switching jobs.
How to Avoid Voluntary Turnover
No company wants to lose talent let alone top talent; this is where company culture comes in. In order to keep top performers employers must provide employees with something more than just money. SHRM’s brief touches on this matter, stating that companies can combat the issue of voluntary turnover by investing in their employees. “To reduce turnover, organizations must focus on retention efforts of current staff, but also not neglect recruitment. Once new employees are brought on board, consider how these new hires are socialized to organizational culture.”
Click here to read more from the SHRM brief.
Turnover by Numbers
Similar studies have addressed this issue and provided insight to employers. Catalyst, a nonprofit dedicated to employment opportunities gathered results from multiple sources on turnover and retention rates. The company pulled a variety of data including: reasons employees voluntarily leave, the cost of turnover and specific factors that result in turnover. When looking at the reasons employees leave it was revealed that 42 percent of women and 50 percent of men leave for a higher compensation and 35 percent of women and 32 percent of men leave for an opportunity to develop new skills. The study also looked at collective reasons for turnover, which revealed a negative climate resulted in the highest turnover rate.
Click here to read more from Catalyst about retention and turnover.
What does this mean?
Company culture, developing talent and recruiting efforts are essential to successful businesses. By adopting these ideas and combining them with hiring best practices an employer could start to minimize turnover and achieve the ideal work environment. Over the past few weeks our posts have been focused on these areas, if you haven’t yet click here to read more from our ActiveCare blog.
What do you think about company culture and employee turnover? We would love to hear your opinions in the comments below.