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Employee turnover – how much is too much?

Finding a balance of employee turnover can prove near enough impossible. On the one hand, having a high movement of staff can indicate an unhappy work dynamic, and on the other, a stagnate team is one unlikely to lend itself to innovation. So, how much is too much?

Employee turnover is a finicky subject and as any employer knows, finding a balance can prove near enough impossible. On the one hand, having a high movement of staff can indicate an unhappy work dynamic, and on the other, a stagnate team is one unlikely to lend itself to innovation. So, how much is too much? 

While it’s difficult to nail down a figure on what level of turnover is deemed ‘good’, the UK average is around 15 per cent a year which can be the ‘happy medium’ of freshening things up without damaging the running of the business.  

This isn’t prescriptive, however – the average rate varies drastically between industries. As does the point at which it begins to have a negative impact on an organisation’s performance, a juncture determined by numerous factors such as the size of the company, and how quick, easy and affordable it is to replace the skills lost. The more valuable the employee, the more damaging the resignation.  

Of course, whether the turnover consists of voluntary or involuntary leave must be taken into consideration – a high level of either can signal issues with management and leadership. But a healthy level of turnover is a part of any well-functioning, growing, and progressive business. If someone leaves for promotion, for example, then clearly, they’ve been developed and trained well. While this can put a spanner in the works, it can make way for others in the company to be promoted.   

Fresh new talent injected into the company can shake things up in a good way, allowing fresh ideas and alternative perspectives, leading to greater (neuro)diversity, and prevent the business from becoming stale. A team too stuck in their ways equals a stagnant company more likely to fall behind. And if the leaver is a lower performer, it can stop the unpleasantness of managing them out of the business. Every cloud…  

How leavers are handled is an opportunity, no – an obligation, to show maturity and respect. Treating leavers well leaves a positive feeling behind with the remaining staff (there’s nothing worse than a bad aftertaste which dulls team morale) and doesn’t burn any bridges. You never know when paths may cross again, and this same employee may return armed with better skills and performance, or even become a competitor later down the line.   

That being said, high turnover, particularly of talented and valued staff can be challenging and the potential reputational risk can be irreversible. In this case it may be time to take a good look in the mirror. Poor company culture, poor compensation packages, or poor management are all common reasons for staff to jump ship.  

When it comes to retention, there are many horror stories swirling around about the Great Resignation and the overinflated levels of ‘job-hopping’ for a higher salary. Whilst a level of this is always likely, it isn’t a reason to bury your head in the sand and accept it. Salary and company culture will always play a big part in an employee’s decision to stay or go, but what it really boils down to is progression.   

Employees may not be as eager as they appear to start from scratch somewhere else. If you are able to demonstrate to them where their career is headed and put tangible development roadmaps in place, as well as ensuring they are promoted when they deserve to be, you might be surprised how these actions pay off. 

Turnover comes hand in hand with managing a business. But prevention is key.  Anonymous company surveys, regular check-ins, and revised perks can identify any issues before they arise. And if you haven’t already, create a genuine mental health and wellbeing plan and stick to it, and above all, communicate. Evaluating through exit interviews and taking the temperature of staff morale may be a hard pill to swallow – but a vital part of prevention. Remote or hybrid working isn’t an excuse for poor comms – there is an abundance of tech to connect, collaborate, and evaluate.  

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