Six Causes of High Turnover Rates — and How to Fix Each One

In HR reporting, high numbers are usually great. High satisfaction, high engagement, high referral rates — bring it on!

Turnover is an exception. Here, the lower, the better. High turnover rates can be extremely costly, as they decrease productivity and increase recruiting expenses.

There are two types of turnover: Voluntary, which is when an employee chooses to leave, and involuntary, which is when a company decides to part ways with an employee. Each has its own causes and solutions. To keep things simple, this article focuses on the drivers and fixes for voluntary turnover.

Let's look at some common reasons for high employee turnover and ways to reduce it.

What is a High Turnover Rate for a Company?

So, do you have a high turnover rate? And what would be a high (voluntary) turnover rate anyway?

First, calculate your organization's turnover rate. The simplest formula for this is:

Overall Employee Turnover rate = (Number of employees who left during a specific time period / Average number of employees during that time period) x 100

Now that you have that number, you can judge if your company has a high turnover rate.

The national average is 17% (downfrom 25% last year), but turnover averages vary from industry to industry. Retail companies have the highest average turnover rate (33%), whereas the energy sector has a low turnover rate at 12%.

Find the average turnover rate for your industry, and compare the figure you calculated to find out if your company has a high turnover rate.

High Turnover Causes and Solutions

1. Poor Management

Your manager has a huge impact on your work life. Employees struggling with an unsupportive or toxic manager are those more likely to seek employment elsewhere. Inconsistent or unfair treatment can all contribute to a work environment that drives team members away.

Tips to Improve Management:

• Train managers in leadership techniques that emphasize active listening and empathy.
• Encourage employees to openly voice their concerns and ideas.
• Provide regular feedback, performance evaluations, and a support system for all.
• Be transparent, especially to communicate challenging news.

2. Weak Company Culture

When work culture is weak or non-existent, employees may feel disconnected from one another. Without a strong company culture, it's difficult for employees to feel a sense of purpose or belonging within the organization. This can drive them to look for work somewhere else where they can feel more connected.

About 60% of workers choose a job based on the company’s beliefs and values. As an HR professional, it's your job to help foster a strong company culture that promotes employee engagement, satisfaction, and long-term loyalty. This means identifying areas of improvement and working with leadership to make meaningful changes that align with the company's values and goals.

Tips to Strengthen Culture:

• Hone your core values and make them authentic to your company.
• Provide opportunities for social gathering and collaboration.
• Encourage employees to share ideas, successes, and feedback with each other.
• Show appreciation for employee achievements through a recognition program.
• Prioritize wellbeing over all else to increase employee satisfaction.

3. High Levels of Burnout

When employees feel overworked and overwhelmed, they're more likely to seek other opportunities that offer better work-life wellness. Burnt-out employees were 2.6 times more likely to be actively seeking a new job than employees who were not experiencing burnout, according to Gallup research. After all, nobody wants to feel like they're constantly on the brink of burnout.

Common drivers of burnout include unrealistic expectations and stressful projects, especially over time. Resolving any such issues at your organization can improve retention.

Tips to Prevent Burnout:

• Provide employees with automation or project management tools to help prioritize and manage their workloads.
• Implement flexible work hours or remote work options.
• Conduct regular check-ins to see how employees are doing.
• Encourage team members to practice self-care and prioritize their wellbeing.
• Foster a culture that celebrates asking for help so no one is afraid to speak up.

4. Disorganized Onboarding Process

When new hires start their job, they want to feel they have everything they need to succeed. But, all too often, new hires are left to fend for themselves without clear expectations, access to relevant resources, or a sense of how they fit into the organization.

This is a recipe for creating a lost and disengaged employee who’s likely to leave.

On the other hand is an effective onboarding process. Employees who undergo a structured onboarding program are 58% more likely to stay with the organization after three years, according to the Society for Human Resource Management.

Tips to Improve Onboarding:

• Create a clear onboarding plan that addresses the needs of the organization and the new employee.
• Include relevant training, support, and resources that will help the new hire succeed in their role.
• Communicate the organization's culture and values to the new employee so they feel part of the team from day one.
• Set up weekly check-ins and feedback to keep employees engaged and invested.

5. Little Career Development

It's important to give employees the chance to develop new skills or take on more challenging roles within the company. With these opportunities, they can become more motivated and satisfied rather than seeking job opportunities elsewhere: A whopping 94% of employees say they would stay with their employer longer if the organization invested in helping them learn.

Tips to Improve Professional Development:

• Actively access to training programs, workshops, and conferences related to their field instead of waiting for staff to propose ideas.
• Fund sector-specific certifications that will help them further develop their skill set.
• Provide advancement opportunities within the company so employees have something to strive towards over time.
• Start a mentorship program to encourage knowledge-sharing and upskilling.

6. Insufficient Benefits

When a candidate looks at your job description, they look for information about your benefits package. In fact, employees say benefits come only to salary in determining how interested they are in a role, according to a survey by Glassdoor. Whether healthcare coverage or wellness activities, employee benefits can increase employee happiness.

Tips to Improve Benefits:

• Evaluate your current employee benefits and perks program.
• Compare your benefits to companies in your industry to see how you stack up.
• If you don’t already have  a dedicated wellness program, launch one. This helps you connect with the 93% of the workforce who value their wellbeing as much as their salary.
• Offer a robust 401(k) plan, high coverage health insurance, ample vacation time, and other perks like employee discounts, gym memberships, or daycare services.

Prioritizing the Employee Experience

One of the most important things any business can do is prioritize the employee experience. Your employees are the lifeblood of your company, and keeping them happy and productive can help you keep your turnover rate low. This means looking beyond payroll, benefits, and job security to create a positive environment.

For example, a wellness program can improve employees' physical and mental health and reduce stress levels in the workplace. As their wellbeing increases, so does their job satisfaction and contentment with your organization.

With the right strategies and a focus on providing a great workplace experience, you can improve retention and ensure that your employees stay with you for years to come.

If you need help finding new ways to increase employee wellness, reach out to a Gympass wellbeing specialist today!

References 

• Building the agile future. (2023). Linkedin. Retrieved October 10, 2023 from https://learning.linkedin.com/resources/workplace-learning-report. 
• Burnout Is About Your Workplace, Not Your People. (December 11, 2019). HBR. Retrieved October 10, 2023 from https://hbr.org/2019/12/burnout-is-about-your-workplace-not-your-people. 
• Don't Underestimate the Importance of Good Onboarding. (August 10, 2017). SHRM. Retrieved October 10, 2023 from https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/dont-underestimate-the-importance-of-effective-onboarding.aspx. 
• Edelman Trust Barometer 2022. (2022). Edelman. Retrieved October 10, 2023 from https://www.edelman.com/sites/g/files/aatuss191/files/2022-01/2022%20Edelman%20Trust%20Barometer%20Global%20Report_Final.pdf. 
• Employee Burnout: The Biggest Myth. (March 13, 2020). Gallup. Retrieved October 10, 2023 from https://www.gallup.com/workplace/288539/employee-burnout-biggest-myth.aspx. 
• Employee Retention Report. (2018). Tinypulse. Retrieved October 10, 2023 from https://www.tinypulse.com/hubfs/2018%20Employee%20Retention%20Report.pdf
• Glassdoor Study Reveals What Job Seekers Are Looking For. (July 25, 2018). Glassdoor. Retrieved October 10, 2023 from https://www.glassdoor.com/employers/blog/salary-benefits-survey/. 
• Results of the 2023 US and Canada Turnover Surveys. (2023). Mercer. Retrieved October 10, 2023 from https://www.imercer.com/articleinsights/workforce-turnover-trends.