Attracting and retaining talent is a challenge that's part of managing any business; after all, high turnover of team members directly impacts an organization's results.
A high turnover rate signals that a company is facing difficulties in hiring and retaining people. After all, when an employee resigns, it impacts costs, productivity, and the organizational culture.
That's why successful businesses are constantly looking for strategies to reduce staff turnover and maintain team performance.
Unsurprisingly, turnover is among the most relevant indicators in HR management to measure a company's performance and the efficiency of management processes in human resources.
In this article, you'll see how to reduce turnover at your company with well-defined actions and best practices for retaining talent.
What is turnover?
Turnover is an index used in HR to measure the proportion between the entry and exit of professionals during a specific time frame. This KPI accounts for both people who left the company to look for new job opportunities and those who were fired due to poor performance or breach of contract.
It's important to remember that an ideal turnover indicator depends on several factors, such as the economic scenario, area of activity, and company goals. The calculation generally combines the number of people hired and people who left the company and then divides it by two.
The result is also divided by the company's current number of employees and multiplied by one hundred. Thus, an annual average of up to 10% means that the company is managing to retain talent to maintain operational efficiency and achieve its objectives.
What causes turnover?
The turnover of people in a company has several causes and isn't always limited to dismissal. In addition to dismissal, professionals may leave an organization searching for better salaries, more benefits, and new career opportunities due to problems with leadership and much more.
In fact, there are types of turnover that are used in HR precisely to measure whether a high turnover rate is an internal or external problem. For example, voluntary turnover happens when a person resigns, and involuntary turnover is when a professional is fired.
However, the causes of turnover can also come from failures in recruiting, selecting, and onboarding new employees. The absence of a career plan, uncompetitive salaries, poor management, and a bad organizational climate can also contribute to high turnover at a company.
How turnover impacts companies
In addition to generating extra expenses with layoffs and termination of employment contracts, high employee turnover impacts the company's productivity. After all, having people with the right skills to perform each role efficiently and productively is essential to achieving strategic goals.
Among the main consequences of turnover are:
- High costs: As we've already said, one of the most direct impacts of turnover is the increase in financial costs for companies, as terminations, as well as new hires, involve significant expenses.
- Drop in productivity: Constant turnover can also result in a drop in productivity, as adapting to new teams takes time.
- Losses in knowledge management: When someone leaves, the company also loses the knowledge and experience that employees acquired over time. This can impact work quality, the ability to innovate, and operational efficiency.
- Impact on organizational culture: A high turnover rate creates uncertainty and anxiety among the people who remain at the company, damaging their commitment to the organization's values.
- Attracting new talent: The company's reputation in the job market can be affected by high turnover, making it even more challenging to attract and hire highly rated professionals.
5 tips to reduce turnover at your business
Check out these tips for focusing on talent retention, reducing turnover and maintaining a stable and committed team at your organization:
1 - Map HR processes
Having visibility of every process in HR can reduce turnover. Map everything, from recruitment and selection to hiring and onboarding.
This can be done with tools such as Qntrl to increase HR productivity: Organize data, map workflows, and automate repetitive tasks so the team can focus on more strategic tasks, such as clearly defining profiles and skills for vacancies, interviews, aptitude tests, and effective onboarding.
2 - Invest in professional development
In addition to offering appropriate salaries and a good benefits policy, create a career plan for the people who work in your company. This will bring more prospects and opportunities for those already working at the organization.
Likewise, fostering professional development and providing ongoing training for teams improves skills and keeps employees engaged and committed to the company's success.
3 - Maintain transparent communication
Collaboration and communication in the workplace are essential to avoid and reduce turnover, as well-informed employees know the company's goals and expectations regarding their performance. Furthermore, giving feedback to each team member and understanding how they think about their work helps identify problems before they become grounds for dismissal.
4 - Provide a positive work environment
A positive organizational culture reflects a healthy corporate environment, which plays a significant role in retaining professionals. A culture that promotes respect, diversity, recognition for work done, and work-life balance creates a space where everyone feels more valued and satisfied.
5 - Discover the real reasons for turnover
The best way to avoid high turnover is to find out what's causing people to leave in the first place, and then fix the problems.
To do this, your company needs a straightforward process to collect and analyze turnover-related data, understand the main trends, and develop strategies for managing the organization's talent.
Remember that reducing turnover and improving business performance with well-defined HR processes is possible. Strategic recruitment, effective onboarding, professional development, constant feedback, and the use of technology to optimize workflows are tools that help (a lot) to achieve this goal.
By investing in employee well-being and professional growth, companies create a work environment where people want to stay, produce, and grow.
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