Monthly turnover rate % | = | Number of employees who left |
Annual turnover rate % | = | Number of employees who left |
Average # of employees | = | Sum of employees from all pay period reports --------------------------------------------- Number of reports |
What’s a high turnover rate?
The question every leader asks when it comes to turnover is: What is a high turnover rate? The answer is that it depends on the business. You’ve got to calculate it over time, combine that with what you know to be true about your specific business and industry, and factor in your understanding of your employees.
No one wants to be in a bad spot with employee turnover. It’s a huge, expensive pain that takes a ton of time and effort to fix. That said, a high turnover rate usually happens because of a combination of things: company culture, compensation, benefits, job market conditions, employee stress, and more.
If you want to compare your business’s turnover rate to national averages, the Bureau of Labor Statistics is a great place to start. Beyond that, the most effective way to reduce turnover rate is to take a long, hard look at how your employees experience working at your company.Reducing turnover rate
Understanding where your employees are coming from and what they’re dealing with is like having a silver bullet to solve many of your company’s retention problems. It’s also vital to have a firm grasp on the competitive hiring landscape. What’s that mean? It means knowing where you stand in the marketplace, and not being behind the times—or your competitors—with what you’re offering employees.
While conventional benefits form a good base, today’s employees want and need more than just the basics. They need life-changing benefits to justify staying in one place for more than a few years. And your company stabilizing its turnover rate for the long-term depends on it.
Recruiting isn’t just about hiring new employees. You’ve got to continuously do things that build your culture, and make your employees want to stay with your company. That means your employee retention strategies—your culture, compensation and benefits—need to be unique and on point.
If your employee turnover rate is high, it doesn’t necessarily spell doom for your business. Having a healthy employee turnover rate is possible, and it doesn’t take a complex process to get there. It just comes down to adding more value to your employees’ lives!
Read other business articles by Dave Ramsey