Impact of Employee Turnover & role of HR

 

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Introduction

Employee turnover can be simply define as the percentage of employees who leave an organization and are replaced by new employees during a specific period. Measuring this employee turnover is helpful to employer to estimate the cost to hire for budget purposes. Hence calculating employee turnover rate is a one of the most important HR Metric.

What is Employee Turnover ?

Employee turnover is the measurement of the number of employees who leave from an organization during a specified time period (usually one year). Mainly we can observe two types of turnovers. Voluntary turnover occur when an employee makes the decision to leave for any personal reason. Involuntary turnover occurs when the employer asked to leave the company to employees for a reason. In Voluntary turnover involves some of the high-performing employees leaving. Companies are more inclined to concentrate on improving the voluntary turnover rates as compared to involuntary turnover.(BambooHR, 2022)

Below is the formula for annual turnover rate:

Figure 1:Employee Turnover Rate Formula  

What Causes Employee Turnover? 

Employees may leave an organization for a variety of reasons. Some turnovers are bad, while others are expected or generic. Worst case scenario is when turnover occurs for unfavorable reasons and/or occurs at an unanticipated rate. The following are some of the most common reasons for turnover

• Getting good brakes
• Natural career progression
• Over load of work
• Mismatch of job requirement and skillset
• Negative attitudes toward boss or management
• Dissatisfactory compensations and benefits
• Lack of product knowledge given from the Organization or incapability of employee
• Unfavorable/ Bad workplace environment
• Family or life event
• Competitive offer
• Migrations
• Un approachable Management
• Poor work -life balance
• Involuntary departure



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Figure 2: Drivers of Employee Turnover

How to manage or reduce high number of employee turnovers

Understanding the causes of employee turnover can help organizations to make the necessary changes to maintain their workforce at the desired level.

Fortunately, most of these issues may be addressed with the assistance of an effective Human Resource Management System (HRMS). HRMS can help organizations understand the root causes of high employee turnover and devise strategies to mitigate it. Here's how it works:

• Analyze your employee turnover rate and reasons
• Ensure that the hiring procedure is in line with your company's financial projections.
• Find or Recruit the Right Candidate
• Employee development assistance
• Analyze or predict for smarter people analytics
• Assist workers in finding a work-life balance
• Turn to Artificial Intelligence (AI) for improving employee retention
• Keep track of long-term staff turnover (Embee Software Pvt,Ltd, (2022).

Conclusion

In conclusion, skillful employees are difficult to find. Also harder to retain them. So that reducing employee turnovers becoming faster among organizations in worldwide.

Because hiring talent, skillful people may be expensive, difficult and stressful than retaining skillful performers chooses to leave. Also high no’s of annual turnover rate has become a pain point for growing company HR in an organization has to bother about company growth while replacing a solid stream of employees leaving their jobs.

And the other hand leaving employee who is having negative impact

HR needs to talk to your employees, let them know that the negative attitude is a performance issue. When they are disrupting the team, not contributing and affecting productivity, it’s as if they’re not performing their job responsibilities. With the right HR decisions and solutions organizations can reduce turnover, improve hiring and retain the best talent

References, 

Embee Software Pvt,Ltd,, 2022. 8 Ways HRMS Can Help to Reduce Employee Turnover. [Online]Available at: https://embee.co.in/blog/8-ways-hrms-help-reduce-employee-turnover/[Accessed 20 03 2022].

BambooHR. (2022). Glossary of Human Resources Management and Employee Benefit Terms. Retrieved from BambooHR: https://www.bamboohr.com/hr-glossary/employee-turnover/