Employee Turnover - 10% is healthy, but how can you be sure of the good vs. the bad?

3 Ways to keep Employee Turnover in the Healthy Zone

Google “Employee Turnover” and you will get close to 73 million results in under half-second. Staggering. More staggering? When you filter out the straight up advertisements less than 250,000 results remain. Clearly employee turnover is big business.

However, the solution(s) need not be. Because all you truly need are well defined processes with effective alternatives baked in. As are realistic expectations. Remember, up to 10% of turnover is healthy

So, whether you have an internal team to define your processes, or you work with a company like The Hire, the path should start in the same place. DATA. Learn who is leaving, and why. Collect information from systems AND by talk to your employees.

Monitor turnover by Demographic

Many HR Departments focus on turnover by team, department, and leader. All are important. But turnover trends in these and other areas can also be telling if you look beneath the surface. Don’t take all data at face value.

For instance, imagine you find a trend in long tenured employees suddenly leaving your IT group. While this could show a leadership problem, it could also reflect a technology switch where an area of expertise is no longer needed. Employees who enjoy that work may opt to an organization where they can do more of it. What we want to stress here is that data without context can be misleading. So, ensure you know the story behind the numbers before jumping to conclusions.

As turnover rises, compare why people SAY they are leaving

Exit Interviews, when conducted properly and used well, are an objective leader’s gold. Objectivity is stressed here because employees leaving may be hyper-critical of direct managers, Human Resources, and the organization itself. But remember, however unfair their perception may seem, there is likely a nugget of truth. Potentially more than a nugget - especially if you are losing a lot of high performers at once.

However, with the above we must also recommend caution. While some employees will be brutally honest as they exit, others will be more judicious. That is why it is imperative to let the data be your guide. Often poor leadership and lack of psychological safety cause people to underreport a problem even as they escape it. This is most prevalent with tenured employees who may not be challenged or feel rewarded, but fear retaliation for being honest. So, look for commonalities and ensure you are asking questions in a way that encourages the exiting employee to be forthright. Some of the common reasons currently sited by employees are lack of flexible work, clear path to promotion, work/life balance, professional development opportunities.

Employees leaving organizations feel disregarded. While you cannot build authentic caring into a process – you can define expected behaviors and create a regular dialogue around them. For example, if “mentoring” during monthly one-on-one meetings is an expectation (and assuming mentoring is specifically defined) – if a leader is not able to show how they are mentoring their team members the performance in the behavior is likely low. Keeping up to date on this kind of information will help you identify reasons for turnover before it happens.

Consider Turnover in Context

Monitoring the business turnover pre-cursors will help you quickly course correct. Consider the following:

Are Sales Down?

Sales may be down because your sales team is not engaged. This could be for many reasons. Perhaps your product is not performing, or maybe employee development and/or product education is insufficient. Maybe your sales leaders are not effective… Regardless of why, low sales eventually lead to low morale. Low morale worsens sales. The cycle will continue. Your best people will leave.

Are Customers Complaining?

If you truly have a customer service problem, you definitely have a problem inside your customer service department. Maybe its poor training. It could be lack of strong leadership. Or maybe your product is awful. Again, like where low sales are present, if not addressed this problem will spread. Customers will continue to complain. Your best people will leave.

Is Absenteeism Rising (and if so in what patterns)?

Yes, someone may be interviewing. But that is not the only way absenteeism can affect turnover. One example is when a team is well staffed up front but is suddenly down one member due to an extended leave of absence. There is no budget to hire a replacement. The team absorbs the work, but the constant stress will contribute to turnover if it continues too long. Especially if the burden is being shouldered by one or few and not the entire team.

Have there been any Major Changes (policies, procedures, business strategy?)

Have you shifted from a product-based company to Software as a Service? Did you restructure your Operations group? Did you ever add that paternity leave policy you were shopping around? All this information is valuable when considering spikes in turnover. It will help you determine if an enterprise shift, or policy rollback, needs to be considered.

So, once you understand turnover, how can you manage it?

Step one is to ensure you have clearly defined processes for recruiting, on-boarding, and managing performance. It is a big step we know. But if the foundation is strong your going to easily keep your turnover in that healthy 10% zone.

Step two is to follow the processes and watch ongoing. If you do, you will see when turnover spikes in any area. From there you can address the core challenges by...

  • Looking more closely at the data
  • Engaging and listening to your people
  • Providing Career Opportunities
  • Ensuring there is always a back-up plan (or person)

Remember, the best way to keep your employees is to authentically show them you care. Treat them like individuals and you will create a great place to work, where turnover is healthy, and people stay.

Lisa Crockett is a leader and professional development coach with more than 20 years of experience in Human Resources, Learning, and Performance. To learn more about her professional career visit her on LinkedIn.

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