Is employee turnover a problem in all companies? All companies lose employees. It’s healthy for an organization to have a measurable turnover. Sometimes people don’t fit into a company’s culture. But other times, employees have emergencies or life changing experiences that separate them from the company. However, it is not to say that a 0% turnover is automatically unhealthy. Some companies reach their optimal staffing level and go for months or years without any voluntary or involuntary turnover. In many situations, this is nearly impossible and would require more time and resources than is practical.
Tracking employee turnover is an essential key point indicator for most businesses. However, it is difficult to measure the costs associated with employees leaving. Hiring a new employee and transitioning away from the previous person is very costly. Some argue that the money lost during training is the key problem. While others recognize that the precious time that upper management must devote to interviewing and paperwork is the largest cost of all.
Each company will vary, and it will vary even more between industries. There are places to research whether your turnover rate is typical in comparison to other companies in your industry. For example, a quick search engine search with your NAICS code and “employee turnover” could give enough information to compare. Find your NAICS code here. If not, more formal methods exist, such as using the Risk Management Association’s Annual Statement Studies. There is often free access to the large RMA book at local universities and small business development centers. You use your NAICS code to look up the data compiled about the different sized companies in that industry.
Determine which candidates are the right fit for your company by using our 5 Guiding Principles For Recruiting a Star-Quality Team.