Hiring top talent and high performance employees is the lifeblood of any business. At TravelPerk, we understand the importance of hiring the right employees and keeping them. The COVID-19 pandemic has caused many workers to look for a new job. This means that companies are experiencing a shock to their workforce that is affecting their employee turnover and employee retention. Here, we dig into the impact of employee turnover and retention, as well as the impact on companies’ workplaces, employee satisfaction, and the bottom line.
What is employee retention and turnover?
Essentially, employee retention is the number of companies and organizations that measure their employees. It is usually recorded as the percentage of full-time employees with the same length of time in the same organization. This is taken as a percentage of the total workforce. If a company has a 75% retention rate, that means 75% of their employees have been on the job for one year.
Employee turnover is the other side of the coin. About the number of employees who left the company for a while – often years. This includes staff turnover, from voluntary turnover – including retirements and resignations to non-cooperative turnover such as redundancies.
Knowing specific metrics and search results can be very helpful for businesses as an indicator of their effectiveness. It can help improve employee experience.
What is a good employee turnover rate and why is it important?
For jobs with demanding skills, or positions where training and hiring takes a long time, this can be a problem. Senior employees with niche skills or strong customer relationships can be different. it’s hard to replacedoing the hiring process long and tiring. In a fast-paced business, the old saying ‘time is money’ is true. That’s why understanding the drivers behind employee turnover can help you retain your employees, increase employee performance, and ultimately save time and money. with money for your business.
Usually, a good employee turnover rate is expected about 10%. This means that the employee retention rate is around 90%. Employee turnover is higher than any other industry. For example, the hospitality industry has a higher than average workforce – in the UK it’s 30% – double the national average.
However, there is always room for improvement when it comes to employee retention and turnover.
So, we’ve compiled some amazing statistics for managers and human resources professionals to give you insight into employee retention and turnover, and how to improve these rates.
Employees are more expensive than you think
- Loss of labor costs on average 33% of their annual salarya figure that was higher than the managers expected (Labour Fair News).
- The sticker price of employee turnover per vacant position in the UK is £30,614 – a very attractive bill for businesses to enter (6Q).
- Re-hiring is another exercise. In the UK alone, employers spend around £42 billion on employee training each year (Department for Education UK).
- According to 2020 UK government figures, this is roughly $1,530 per employee for training each year (Department for Education UK).
In addition to the financial costs of high employee turnover, there are other, more difficult to measure reasons that can occur when team members leave their employers. right away. If a company has too much turnover, it can damage employee morale and ultimately, lead to less effective work and lower productivity.
Not all businesses have the same employee turnover rate
- The average turnover rate in the UK is around 15% – although this varies from business to business (Monster).
- For the manufacturing sector, employee turnover is expected to increase by 20% by 2022 (Reward Gateway).
- The international employee turnover rate is also high at 18.3% (Net Facilities).
- Custodians, managers/leaders, and financial or technical responsibilities will change job roles according to a 2021 survey (EY global survey).
- In 2021 for US workers, the rate of turnover in the marketing sector will be higher than in the last 5 years at 69% (Zippia).
The main reasons for employee turnover
High turnover is a big problem for businesses. That’s why 87% of HR leaders say their employee retention will be their top priority for years to come.
There are many reasons that lead employees to decide to leave their current employer and increase the voluntary turnover rate. In general, there will always be reasons for employees to move. However, these key drivers of turnover suggest there are things employers can do to ensure they don’t have to look for new employees.
- Overworking is one of the main reasons for employee turnover. 77% of the workers got fired from long working hours in their current job and 42% quit their jobs for this purpose (Deloitte)
- In 2019, 12% of workers in the US cited work-life balance as the reason for leaving their job (Work Institute).
- The lack of flexible work is the main reason why employees leave their responsibilities. In the US, 16% of workers say they would be willing to leave their current job if remote work wasn’t available. 8% said they would leave if forced to work in an online sector (Gartner).
How to Reduce Employee Turnover and Increase Employee Retention
Research from Harvard Business Review shows that there are several key factors that motivate employees to stay longer with a company. These range from development opportunities to job satisfaction and company culture. Understanding these factors will provide ideas on how to improve employee experience.
Below are employee retention statistics, as well as ideas on how HR leaders can retain your best employees, increase their career development, and increase retention rates. of your staff.
- Employees who are happier at work and feel they are making progress in their careers Maybe 20% still working on their team for a year (TINYpulse).
- A corporate culture driven by a core mission is also key. Employees who believe in their organization are a reason higher than income their company (TINYpulse) has a 27% occupancy rate.
- The workers enter and succeed 59% are less likely to look for a job with another company in the next 12 months according to respondents to a Gallup Survey. (Gallup Research).
- Remote work is an important part of a company culture that promotes excellence. 52% of employees said flexible working policies result if they stay in their group. (Gartner).
- A good planning program for new hires can also help. 69% of employees are commuting the onboarding process is well managed they have a better work ethic and stay with their company for three years (SHRM).
- Job growth is an important metric that shows job security and maintenance. Regular feedback sessions with employees can significantly reduce employee turnover. In fact, there are companies that implement common business ideas. 15% discount than companies that do not offer employees the same opinions (Firstup).
In summary, for companies to compete, HR leaders must attract, hire and retain high-performing employees with effective employee retention strategies.
Providing flexibility, professional development, a core mission, and a workplace that encourages employee engagement can help you retain your employees and ensure your top talent doesn’t become job seekers!