Rivermate | Product owner - Andrew Simon

Global Work Glossary

What are the causes and effects of employee turnover?

Employee turnover reflects the rate at which employees leave an organization within a specified period, often a year. It significantly impacts business objectives and the company's reputation.

What is Employee Turnover?

Employee turnover signifies the average number of employees departing the workplace over a specific period, usually replaced by new hires. It's a key indicator of employee satisfaction, burnout, and workplace culture.

Calculation of Employee Turnover

The turnover rate is calculated as a percentage: Determine the total number of employees within a specified period (X). Determine the total number of employees who left within the same timeframe (Y). Divide Y by X and multiply by 100.

Average Employee Turnover Rate Across Industries

The desirable turnover rate varies across industries. The recent pandemic has impacted turnover rates, with notable decreases reported in 2021 compared to 2020. Here are average turnover rates for various industries: Mining and Logging: 36.2% Construction: 56.9% Manufacturing: 39.9% Trade, Transportation, and Utilities: 54.5% Information: 38.9% Financial Activities: 28.5% Professional and Business Services: 64.2% Education and Health Services: 25.5% Leisure and Hospitality: 84.9% Government: 18.1%

Voluntary vs. Involuntary Turnover

Voluntary Turnover: Occurs when an employee chooses to leave the organization. Reasons may include personal decisions, negative experiences, or career development elsewhere. Involuntary Turnover: Results from the employer terminating or removing an employee from a group due to various reasons such as poor performance or company-wide layoffs. Causes of Employee Turnover Top causes of turnover include lack of career growth opportunities, burnout, toxic work environments, personal reasons, competitive offers from other companies, and involuntary departures.

Reducing Employee Turnover

To reduce turnover, offer competitive pay and benefits, support career growth, provide a positive work environment, encourage work-life balance, address employee concerns promptly, and conduct exit interviews to gather feedback.

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