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Managing Employee Turnover

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employee retention

Employee turnover represents a process that consists in the actions taken to replace one employee with another, no matter the reason for which this change is necessary. Related to this specific process, it is essential that the employee turnover rate is viewed as a key performance indicator, as it reveals the percentage of employees that an organization had to replace within a given time frame.

% Employee turnover is an indicator that most retention specialists and managers struggle to maintain as low as possible and with a minimum of variance. This perspective of approach is the classic one, where only in extreme conditions employees are being fired or where employees who intend to leave are met with counter offers. Neither of theseoptions do not indicate a wrong or right approach, in themselves. Nevertheless, it is recommended to also keep in mind the fact that alternative or even opposite boarding can be drawn within an organization.

Keeping the employee turnover rate under control with continuous counteroffers will eventually reveal two possible perspectives:

  • One of them reflects the fact that the organization does not value truthfully an employee until he or she is about to leave the company. Thus, the delayed appreciation will also be spotted by the employee that may not be comforted by a “better later than never” approach.
  • The second possibility is that the counteroffer does not reflect the employee’s achievements and potential, over evaluating his or her presence within the company. This occurrence comes to the disadvantage of the organization because it indicates an investment that will not lead to expected outputs and outcomes. In this manner the company closes the possibility for change, from other potential performers that could achieve and bring greater added value within the organization. All this happens in order to maintain a lower value of the turnover rate among employees.

Instead of focusing efforts and investments for this single key performance indicator, organizations are advised to aim for attracting and maintaining those persons who perform and who are eager to bring their contribution within the company. These employees are identified in time, after evaluating processes or after 360 degrees feedback sessions, which are the most effective procedures due to the fact that they offer a clearer overview from different perspectives. On the other side, employees that do not meet expectations, in comparison to the ones that exceed them, are those who usually do not believe in the business or the company and, for this reason, they are disengaged and hesitate to invest effort. Such employees can serve and act intentionally or unintentionally as contaminating factors within the department or team, due to the fact that they point out the existing negative aspects.

For the aforementioned cases, it is relevant to allow an increase in the employee turnover rate in order to activate the opportunity of bringing new talent within the company, through people who would perform better or who would make the most of the opportunity of being part of the business.

Evolution and dynamics are part of today’s labor market, therefore organizations should also embrace dynamics among employees and the fact that evolution sometimes relies on new employees with fresh perspectives.

The employee turnover rate is not to be neglected or overlooked, because it also has a great impact for the organization’s costs due to advertising, recruitment, employment and training processes. At the same time, retaining just for the sake of retention can lead to higher costs with less advantageous results.

The ideal course of action implies a balanced approach, which suits the company for the present and ensures performance for the future. This enables new or performing employees are to be kept, while those who desire to leave may do so, without repercussions for neither party. It is preferable to gain the trust and devotion of a new employee than to regain the engagement of one who intends to quit.

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Comments (2)

  • Performance Magazine | Consequences of employee turnover on Organizational Performance

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    […] Turnover side-effects depend on whether the company has a low-turnover rate or a high one. Those affecting low-turnover companies are generally higher than those affecting the performance of high-turnover companies. Essentially, a low-turnover rate means that an employee stays longer within a company he/she works for and thus gains more experience and knowledge. If this employee were to leave, the company would lose a hefty portion of its experience with that employee. […]

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