I have lived in the same street for over eleven years. The local supermarket down the road is medium-sized and has lots of great products, but that is not the reason that I prefer it to the larger (and cheaper) one just around the corner. At my local supermarket, the same staff have been working there since I arrived in the street, which means they greet me and my children by name, and even keep an eye on my dog as he patiently waits outside for me. This supermarket has a ‘low turnover rate’. In contrast, my friend works for an organisation that has such a ‘high turnover rate’, that he has stopped trying to learn people’s names, because every month there is a new face in the admin department.
voluntary leave
Turnover rate refers to the percentage of employees who leave a company within a period of time. To calculate this, companies take into account staff who leave, who are dismissed, or who retire. Promotions and transfers are not usually included in the calculations.
time and money
Companies need to worry about high turnover rates because if you have staff who are constantly leaving, this means that time and money has to be spent on recruitment and training. Having a solid staff base is more beneficial to a company. Although many employees leave their jobs because they can get higher pay elsewhere, many businesses are starting to realise that high turnover rates are not always related to pay. Nowadays, some companies spend a lot of time on employee retention, which involves looking at ways to keep good employees by making them want to stay where they are.
working conditions
Obviously, low-paid jobs are more prone to higher turnover rates, but money is not the only factor to take into consideration. Other things that contribute to turnover rates are working conditions, economic climate, company culture, and management. One other area that has gained a lot of attention in recent years is the notion of ‘employee engagement’. By keeping employees interested in their jobs, it is good to give them challenging tasks, recognise their efforts and give them regular feedback. All these things contribute to an employee feeling like a valuable part of the organisation. According to experts, an engaged employee is less likely to leave a job because they feel more motivated and more connected to the organisation.
know your rate
Of course, it is important to note that some industries have higher voluntary turnovers than others. For example, the hospitality industry has a higher turnover rate than insurance or banking, so it isn’t always a good idea to compare across industries. It is also unrealistic to expect a zero per cent turnover rate, as there will always be some employees who leave because of life circumstances like relocation or retirement, or a change in timetable needs. However, it is a good idea for companies to be aware of their turnover rates so that they know if they are increasing or decreasing.
For the moment my local supermarket is obviously doing something right, which is good for them, for me, and even for the dog!