In a retail environment or within the HR context in general, turnover or staff turnover or employee /labor turnover is the rate at which an organization loses employees. Simple ways to describe it could be “how long employees tend to remain in their position?” Turnover is measured for individual companies and their business as a whole. If a company or business is said to have a high turnover relative to its main competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry and this can obviously be for a variety of reasons. High turnover may be harmful to the company’s productivity ratio if skilled workers are often leaving and the employee’s population contains a high percentage of un-skilled workers. Companies also track turnover internally, across departments as Internal turnover involves employees leaving their current positions for new positions within the same company. Clearly in both cases positive (promotions, further responsibility etc.) and negative (demotion, project failure or budget cuts). Internal turnover is usually controlled by a variety of HR tools and mechanisms, such as an internal recruitment policy or structured succession planning
What are the causes of high turnover?
High turnover often means that employees are dissatisfied with their jobs, especially when the job market is open to new opportunities and experienced employees can with ease transfer to different organizations. It can also indicate unsafe or unhealthy conditions or a not people oriented business culture or that too few employees give satisfactory performance (due to unrealistic expectations, inappropriate processes or tools, or poor candidate screening). The lack of challenges, dissatisfaction with the job-scope, and conflict with the management have been noted as early signs of high turnover. Each business has its own unique turnover drivers so companies must continually work to identify the issues that cause turnover in their business. Further, the causes of attrition vary within a company such that makes for turnover in one department might be very different from the causes of turnover in another department.
Companies can use exit interviews to find out why employees are leaving and the problems they encountered in the workplace. The HR department can also re-look the recruitment process and mostly the talent acquisition side of it.
Another factor that might affect turnover lie in the selection of the best fit talent for the lack in choosing valid candidates from the outside, in fact, hiring the right talent might work well towards solving the turnover problem, on the contrary choosing employees whom values are not fit for the organization, or those employees with a not value based background might only increase the potential of a costly issue for the organization.Low turnover instead indicates that none of the above is completely true: employees are satisfied, healthy, and safe, and their performance is satisfactory to the employer, and mostly the selection, professionalism and competency of the HR department in acquiring the right talent can be the key.
Other indicators of low turnover are obviously career opportunities; salary, corporate culture, management’s recognition, and a comfortable workplace seem to impact employees’ decision to stay with their employer. Is your company management team looking at labor turnover this way? Or your business just looking to save the bottom line on the P&L where personnel cost are always having a great deal of impacts, which remain the question.
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