Nine Ways to Reduce Employee Turnover

Author: Kelley Donald - MarCom/Friday, November 18, 2022/Categories: Business Internet

Any company that manages to attract high-quality talent has a lot at stake in employee retention. Along with potentially losing employees who are key to your company's mission, replacing employees leaving your company also requires costly efforts and a time-consuming onboarding/hiring process.

For these reasons and more, high employee turnover is a problem that no business wants to have. Even all the turnover costs aside, having a high turnover rate is a poor reflection of your company culture that could indicate underlying issues in your company such as improper management or poor employee satisfaction. It is a problem on the rise; according to research from Gartner, total annual employee turnover is poised to be 20% higher in 2022 than the pre-pandemic annual average.

Given that voluntary turnover is often a symptom of underlying issues such as these, reducing your employee turnover rate often requires a holistic approach that considers many aspects of your company and its relationship with its employees. In this article, we will cover everything you need to know about reducing employee turnover rates, including the average turnover rate and how to calculate employee turnover, common causes of a high turnover rate, and nine proven strategies that you can use to boost employee satisfaction and reduce the turnover rate at your company.

What is Turnover?

Turnover occurs anytime an employee leaves a company, and turnover rate refers to the percentages of employees leaving a company within a given period of time.

Turnover can be broken down into two types: involuntary turnover and voluntary turnover. Involuntary turnover occurs when employees are forced to leave the company after being laid off or fired. Voluntary turnover occurs when an employee leaves the company of their own volition and is the type of turnover that most organizations seek to prevent.

How to Calculate Turnover Rate

To calculate your employee turnover rate, start by defining the period that you would like to examine. If you want to know your turnover rate for the past year, for example, add up all of the employees who left your company during that year.

Once you have this number, simply divide it by the total number of employees that were with your company at the beginning of the year to reach a turnover percentage. If you only want to know the rate of voluntary turnover at your company, you will need to eliminate those laid off or fired from the equation.

What is the Average Employee Turnover Rate?

The average number of employees that voluntarily leave their place of employment can vary wildly from industry to industry, and different expected turnover rates from company to company are common. In 2021, the average employee turnover rate in the US across all industries was 57.3%. Accommodation and food services had the highest turnover rate of any industry in 2021 at 86.3%, while state and local education had the lowest turnover rate at 16%. For a complete breakdown of average turnover rates across industries from 2017-2021, check out this resource from the BLS.

What Causes High Employee Turnover Rates?

There are different factors that can cause a company to have high turnover. Some of the most common causes of high employee turnover include:

1) Lack of Recognition

No one likes to feel as if they are just another cog in the machine, and making sure that your employees feel recognized and appreciated is one of the most effective ways to retain talent. This can start with employee engagement and simply letting your employees know when they have done a good job; in many cases, a simple "great work" or "well done" can go a long way toward boosting employee morale.

Some companies also choose to establish employee recognition programs that offer rewards and bonuses to employees who go above and beyond. However, you go about it, though, ensuring that your employees are recognized for their contributions to the company is key to reducing turnover.

2) Poor Compensation

It is understood that employees want to make as much money at their job as possible. If you are not offering competitive pay, your employees are more likely than not to start looking for a better job.

While salary is not the end all be all when it comes to reducing staff turnover, it is certainly an important part of the equation, and today's employees are more than willing to leave for greener pastures if they are not being fairly compensated for their experience and skills.

3) Lack of Career Growth Opportunities

While some people are content where they are at, most employees place a lot of value on career development. If an employee feels like their current career path is a dead end with no opportunity for promotion, they are not likely to stick around for long. This makes it essential to teach your employees new skills that they can use to further their careers and to make it clear that there is a promising future for them within your company.

4) Poor Management

The leadership at a company has a major impact on the employee experience, and poor management is one of the most common causes of high turnover. If your employees feel mistreated or underappreciated by their bosses, they are probably going to have low job satisfaction even if everything else about working for your company is great. In many instances, therefore, a high turnover rate is a reflection of a company's management and management practices.

5) Poor Company Culture

Poor management can be one element of a toxic company culture that leads to a high employee turnover rate, but management is not the only thing that defines a company's culture. The work environment at your company, its mission and values, the people that it employs, and much more all come together to make up your company's culture.

If the corporate culture at your company is leading to a lot of workplace conflict or other issues, reconsidering your workplace environment and the employee experience at your company may be the key to reducing your annual turnover rate.

6) Lack of Flexibility

In recent years, employees have come to value flexible schedules more and more. This is especially true among younger workers, with half of Millennials stating that flexibility is a "very important" part of job satisfaction. Whether it is offering employees the option to work from home or simply valuing the work life balance of your employees a little more, providing your employees with plenty of flexibility is one proven way to prevent them from searching for a new job.

The Impact of High Turnover

Regardless of whether you run a small business or an international corporation, a high turnover rate can be incredibly costly to a company. Some of the most damaging ways in which a high turnover rate can affect a company includes:

1) Recruitment and Onboarding Costs

Employees who have left the company need to be replaced, and the recruiting efforts required to find new employees are often time-consuming and expensive. Once you manage to find these new hires, providing new team members with the training they need to fulfill their responsibilities is equally expensive and time-consuming. All of the work and expenses that go into hiring and training a new employee make the simple act of replacing employees who leave your company one of the most impactful turnover costs.

2) Lower Morale

Having too many employees leave your company can harm morale among the employees who stay. Losing a single employee can affect the dynamic of your whole team and can lead to the loss of valued relationships. High turnover, therefore, is something that can deeply affect the morale of your employees.

3) Lost Productivity

Higher turnover often means lower productivity. When an employee leaves your company, the rest of your employees have to pick up the slack until a new employee is hired and trained. More times than not, this is going to lead to a noticeable drop in productivity.

4) Even Higher Turnover

High turnover can create a snowball effect that drives even more employees to leave your company. Employees tend to follow the herd in many regards, and high turnover is something that can quickly become contagious. This is especially true when you consider the fact that high turnover lowers morale and strains the teams that are forced to pick up the slack.

How to Reduce a High Turnover Rate

Given the many costs of employee turnover, lowering high turnover rates is a key objective for any company that is witnessing a lot of its employees leave for other job offers. Thankfully, there are several effective ways to go about reducing employee turnover. If you would like to lower the average number of employees that voluntarily leave your company each year, here are nine proven strategies to try:

1) Adapt Your Hiring Practices

Reducing employee turnover starts with hiring the right employees. As you search for job seekers, your HR professionals should prioritize candidates that will be a good fit for the position and for your company overall, along with the mission, values, and culture. By only hiring employees that are truly a great fit for your company, you can populate your team with loyal employees who are more likely to stick around for the long haul.

2) Offer Fair Compensation

Offering fair compensation is one of the most straightforward ways to reduce turnover rates. Along with ensuring that you are paying your employees a salary that is on par with what they would find at other places of employment, offering competitive benefits is also a key part of maintaining a high employee retention rate.

3) Listen to Your Employees

If you are looking for ways to improve the employee experience at your company, listening to employee feedback is a great place to start. In addition to helping you discover new opportunities for improvement, the simple act of listening to your employees itself can have a big impact on morale and job satisfaction.

Having an HR professional conduct an exit interview anytime an employee decides to leave the company is another great way to gather valuable employee feedback. By taking the time to discuss why an employee is leaving, HR professionals can identify trends that are leading to high employee turnover so that they can be addressed.

4) Offering Ongoing Training and Development

We have mentioned already that a lack of growth opportunities is one common reason why employees leave their place of employment. While you cannot promise everyone at your company an eventual promotion, what you can do is ensure that you are providing your employees with the training and development they need to further their careers.

Even if an employee does end up leaving your company after they acquire the skills and experience to pursue a better job somewhere, this still reflects on your company much more positively than having an employee leave due to dissatisfaction. If your employees know that working for your company will provide them with ample opportunity to improve their skills and further their careers, you'll have a much easier time both retaining your existing employees and attracting new ones.

5) Form Relationships

Every positive relationship that an employee forms with one of their colleagues serves as an anchor that will keep that employee from leaving. When leaving your company means leaving a beneficial community and saying goodbye to meaningful relationships, employees are a lot more likely to stick around.

Investing in team bonding initiatives and instructing your managers to prioritize relationship forming, therefore, is one excellent way to reduce employee turnover. By creating a work environment that, offers much more value to your employees' lives than just a paycheck alone, you can make your company a much more desirable place of employment.

6) Offer Flexible Scheduling

The more flexibility you are able to provide your employees when it comes to their work schedule, the more satisfied they are likely to be. Offering employees that are able to do so the option to work from home when they choose is one excellent way to provide more flexibility to your employees. Simply offering flexibility about the days and hours that your employees work is another effective way to improve employee satisfaction.

Companies have learned over the decades that a full-time schedule with strictly enforced hours is not always the key to optimum productivity. Today, more and more companies are choosing to offer flexible scheduling in the form of both remote work opportunities and flexible hours, and employees deeply value this flexibility. This makes prioritizing flexibility in your workforce planning a great way to reduce turnover.

7) Offer Creative Rewards and Incentives

People often value creative rewards much higher than their dollar value, and this is why companies have been handing out things such as "employee of the month" plaques for as long as anyone can remember. While these small tokens of appreciation may not seem like much, they serve to make sure an employee feels recognized for their efforts and are in much higher regard than you might realize.

Of course, creative rewards and incentives can also come in forms of more material value as well. Vacation days, unlimited maternity/paternity leave, flexible scheduling, travel stipends, gifts, and bonuses are examples of ways that you can reward your employees and provide incentives that will encourage employee retention.

8) Ensure That Your Employees Feel Appreciated

Making sure that your employees feel recognized and appreciated is one of the most important keys to reducing employee turnover. Rewarding employees is one way to go about ensuring that they feel recognized, but making your employees feel like their efforts are appreciated requires more than just rewards and incentives. It requires a company culture that rewards excellence and managers that are able to recognize individual employee contributions.

By making these efforts to ensure that your employees feel recognized and appreciated, you can eliminate one of the most common causes of employee turnover while at the same time boosting morale and creating a culture that encourages employees to give their best.

Dealing With the Consequences of Employee Turnover

Reducing your turnover rate is the best way to limit the impact that turnover has on your company, but there is no way to prevent employee turnover entirely. Even the companies that treat their employees like rock stars have to contend with losing talented members of their time from time to time.

While losing any employee presents obstacles for a company, losing members of your IT team can be especially challenging. In today's world where technology dominates almost every aspect of modern business, most companies cannot afford any disruption to their IT infrastructure. Losing members of the team responsible for keeping that infrastructure running and secure is certainly prone to creating such disruptions.

Building redundancies into your human network is one way to mitigate the fallout of losing members of your IT team. When you have employees trained and ready to plug the gaps that employee turnover will inevitably create, losing members of your team creates far less disruption.

Utilizing managed IT services is another source of relief for companies that are struggling to stay on track after losing IT employees. These third-party services place an entire team of IT professionals at your service, making it easy to pick up the slack while you are searching for new employees.


Talented employees are vital to any company's success, making turnover a problem that presents itself in a number of costly ways. If your expected turnover rates are higher than you would like them to be, following the tips outlined in this article is a great way to keep as many of your talented employees around as possible.

At Consolidated Communications, we proudly provide businesses of all sizes with industry-leading communications solutions and managed IT services. If you are struggling with the consequences of high-employee turnover and would like to work with a company that will ensure that, your IT network continues running smoothly and securely - Consolidated Communications is here to help! Learn more about the many benefits of collaborating with Consolidated Communications. Contact us today.



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