Employee Turnover Definition [+5 Ways to Prevent Turnover]

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Employee Turnover Definition [+5 Ways to Prevent Turnover]

Are you looking to learn more about employee turnover and what it means? You’ve come to the right place.

Did you know that replacing an employee in a costs up to 33% of their annual salary? That’s right, replacing staff members too often can have a devastating impact on a ’s resources and growth. 

Therefore, the human resources department of your needs to take this matter seriously. If you are wondering what employee turnover is and how to prevent it, keep reading.

I’m about to show you what causes this growing problem that many companies are facing today.  Also, how it affects finances, time, and human resources.

What Is Employee Turnover?

Employee Turnover

Employee turnover refers to the specific percentage of workers who leave an organization in a determined period of time. The typical employee turnover rate is usually measured yearly.

Measuring the employee turnover rate in a is a necessary and important process. It will help human resources managers determine hiring costs and employee retention rates for budget purposes.

In addition to that, you can also apply employee turnover measurements to subcategories within the same , such as need for new hires, or even demographic groups. 

Types of Employee Turnover 

When we think of employee turnover, there are more factors than just employees quitting their jobs. There are other instances you need to take into consideration.  This, with the purpose of calculating employee turnover rates in your accurately.

Leave Voluntarily

Voluntary Employee Turnover

It occurs when an employee actively decides to end the employment relationship. Voluntary employee turnover happens when the worker finds better job opportunities or does not feel comfortable within the . Moreover, it can also happen if the worker is disengaged or disappointed. Also, other factors such as personal reasons, physical problems, and emergencies play a role. 

When a voluntary resignation occurs, the employee usually notifies the employer weeks or months before it happens. This way, the employer can plan ahead and find another person to do the job.

Involuntary Employee Turnover

When the termination of the employment relationship occurs as a decision of the employer, we call it involuntary turnover. In other words, the worker does not make the decision of leaving the .

Involuntary turnover may occur due to several factors such as poor performance, absenteeism, inappropriate behavior, violation of the workplace procedures and any other factor that infringes the ’s rules. 

In the same manner, involuntary turnover is also referred to as termination, firing, or discharge. It is important to distinguish that layoffs procedures are usually dealt with differently from termination.

Desirable/undesirable Employee Turnover

Even though employee turnover usually has a negative impact on an organization, it does not always represent something negative. There are some instances in which the turnover or the termination of the employment relationship is favorable or desirable for the employer.

For instance, an employee who is usually late for work or does a very poor job will eventually become a possible case of turnover. 

Though it is true that replacing an employee is expensive, having a non-productive employee is also counterproductive. This will end up costing the more in the long term. 

Therefore, the employer will actively seek to replace the employee with a new worker who meets or exceeds the expectations that the previous worker did not. 

Attrition Vs turnover

Even though both terms mean the departure of an employee from a , they are not interchangeable. On the one hand, turnover refers to the termination of the employment relationship, whether voluntarily or involuntarily. This includes circumstances such as firing and resignation. 

On the other hand, attrition refers to the ending of the employment relationship due to retirement, death, or job elimination. One of the aspects that characterizes attrition is that the position is not usually filled with a new employee. 

5 Ways to Prevent Employee Turnover in Your

Preventing high rates of employee turnover in your is quite important. Later in this article, you will find out why keeping a low employee turnover rate in your is a must.

In order to prevent high employee turnover rates in your , you have to take a clear course of action. For example, establishing priorities to increase employees’ engagement and general satisfaction.

1. Offer Competitive Salaries and Attractive Benefits

Good Salaries

It is no secret that people want to get paid well. They need to cover basic necessities such as housing, transportation, food, clothing and extra money for recreational activities. 

According to SHRM, 44% of employees who quit their jobs do it to get another job that pays them a better salary. 

If you don’t pay your employees well, they will end up finding a that will. This means a higher turnover rate for your . 

In order to determine what a fair salary is, you can do research on wages in your area. Find out about the salaries other companies offer their employees in similar areas and from there. 

If it is within your ’s budget, offer a higher salary than the competition. By doing this, you will make sure your employees think twice before considering applying for a job in a similar . 

With this in mind, you need to know that a simple salary won’t do the job. Employees want benefits too. Apart from the legally required benefits for employees, you have to offer them attractive benefits that will encourage them to stay. You should include:

  • Disability insurance
  • Health insurance
  • Retirement plan
  • Optional leave
  • Flexible hours


Another benefit you can offer your employees is helping them pay off their student debt. Did you know that 70% of our workforce graduates with student loan debt? 

According to the Chamber of Commerce, the student debt today is higher than 1.5 trillion dollars in only federal debt. Also, the average debt is approximately $37.000, which represents a 78% increase from 10 years earlier. 

Because of this, offering your employees a program that will help them pay off their debt is a way to encourage them to stay in the .


You can join FutureFuel as an employer and work in conjunction with them to offer your employees this benefit. With FutureFuel, you can help employees save up thousands of dollars by lowering interest rates by 1.7%

It has an easy enterprise implementation through its SaaS platform which includes dashboards that will keep you informed in real time. You can request a demo to better understand how it works.

2. Have an Optimized Recruitment Process 

Hire the Right People

Having an optimized recruitment process is the first line of defense against employee turnover. No matter how many benefits and competitive salaries you offer your employees, hiring the wrong people will eventually translate into high turnover rates, whether voluntary or involuntary.

Therefore, not only should you hire candidates that show strong skills and that are perfect for a determined position. No matter how skilled an employee is,  working in a is about doing a good job and being able to work in a team.

For this reason, you must ask behavioral questions during interviews. Finding out about the candidate’s preferences, comfort zone, and adaptability is necessary to ensure the person can adapt to your workplace culture.

Another way you can reduce the possibilities of hiring the wrong person is walking them through the office and explain to them what the workplace culture is like. Luckily, the person will prefer not to continue with the process if they feel they won’t fit in. 

Diversity in hiring

Apart from hiring the right talent for a specific position, you also have to consider hiring different types of candidates and practice inclusion in your recruitment process. 

According to Jobbatical, companies in the top quartile for gender diversity are 15% more likely to have positive financial returns. This, in conjunction with benefits and fair salaries, will have a positive impact on the turnover rates in your . 

In addition, 69% of executives recognize that the organizational and individual benefits of a positive and diverse inclusive experience can lead to a stronger performance of the organization, which also translates into a higher retention rate. 

This is why diversity is a key factor when it comes to keeping a low employee turnover rate. 

3. Give Feedback and Praise 

When an employee completes a task exceeding expectations, it is important that you recognize their hard work. Employees need to feel valued and recognized for their achievements.

Of course, that does not mean that you have to praise employees for everyday tasks that are part of their job. However, when they complete an assignment that truly exceeds expectations, congratulate them. 

The purpose of this is creating a healthy and motivating work environment. When an employee feels acknowledged and praised, they are more likely to stay in the . This way, you can reduce your turnover rates. 

On the other hand, giving your employees feedback on their performance is a must. Feedback includes praising them for their achievements and hard work, but also letting them know about their mistakes, room for improvement, and recommendations.

Managerial FeedbackEven though not everybody enjoys getting feedback, especially if it isn’t all positive, 72% of employees under 30 agreed that they would like to get feedback on a daily or weekly basis, according to PcW.

Just as important, you need to take into consideration that feedback should not be a unilateral process in your . To be specific, managers also have to get feedback from their employees. 

According to Gallup, managers who received feedback showed 8.9% greater profitability. This means that feedback is a necessary and bilateral process that needs to be incorporated in today’s companies. 

4. Provide Opportunities For Professional Growth 

According to the Work Institute, the top reason employees gave for leaving their jobs was lack of career development. In addition, 12% said the reason was lack of support with work-life balance, 11% said managers’ behavior, and 9% unsatisfactory benefits and compensation. 

Lack of Career Development Skills

As you can see, not offering your employees a clear path for career development is a major cause of employee turnover. You need to offer your employees the opportunities and guidance necessary to move forward in their jobs.

With this in mind, designing a strategy to offer your employees tangible opportunities for advancement is the path to follow. But, how can you do that? 

The ideal way to do that is by boosting employee development in your . by creating a mentoring program to identify weaknesses, strengths, and aptitudes your employees have.

Then, create a professional training program will be necessary. Keep in mind that not every employee in the will be willing to upgrade their skill sets by investing extra time in gaining knowledge. For those who are, you can offer them training courses, conferences, seminars, talks, and any other method that encourages them to keep learning. 

Another way to encourage employees to grow professionally is by providing them with cross-department training. Prepare your employees to work with other departments in the so they can gain new skills. 

By doing this, employees will have better opportunities to grow in the and get positions that they might have not considered at first. This way, employees will feel more engaged and comfortable in the .

5. Allow Employees to Demonstrate Their Value 

Most employees want to demonstrate what they are capable of doing in their positions. Even though the primary reason for people to working is earning money, workers actually enjoy what they do.

Therefore, allowing them to demonstrate their value is important, as employees who don’t feel they are taken seriously tend to have a higher chance of feeling disengaged, which equals higher turnover rates. 

The key to including employees more and allowing them to demonstrate their value is making them a part of the decision-making process. Of course, only managers should make certain types of decisions.

With that said, when it comes to deciding the best course of action for a product or , or maybe the way things should be done at work, allow your employees to participate. 

This way, they will feel valued and respected and are more likely to be engaged, which ultimately translates into a lower turnover rate in the . 

Also, allow employees to have talks and seminars with their peers for them to share their knowledge and contribute to a better performance of the . Teaching usually reinforces the individual’s knowledge. 

In addition, the best way to design an effective strategy to lower employee turnover rates is to understand what causes it in the first place. 

Causes of Employee Turnover 

  • Bad boss performance
  • Lack of growth opportunities
  • Not being recognized for good work
  • Lack of feedback
  • Bad corporate culture
  • Lack of respect
  • Poor recruitment process
  • No opportunity for making decisions 

According to , almost 50% of employees said that they’ve quit their jobs because they had a bad manager. This indicates that not having an efficient and fair boss performance plays an important role in high employee turnover rates.

Moreover, employees who feel that they are progressing at their careers have a 20% higher probability to stay with the , according to TinyPulse

Also, according to a report published by Hays, nearly 50% of employees of a study of 2000 workers said they were actively looking for a new job and that a bad corporate culture was the cause. 

In addition to that, a study published by QualtricsReport revealed that only 30% of Americans feel their feedback is acted upon by their managers, which is a low when it comes to employee turnover rates.

Furthermore, not considering employees opinions in decision-making and disrespecting them in any form also plays a role when it comes to the of workers who quit their jobs every day. 

Why Is It Important to Reduce Employee Turnover in Your ? 

Keeping a low employee turnover rate may sometimes feel like something relatively easy to accomplish. However, reducing employee turnover rates in your is more important than most managers think. So, why is it so important to keep turnover rates low? The answer is simple.

Recruiting new talents is expensive. According to a study published by TinyPulse, employee exit costs up to a third of a person’s annual salary. This is why retaining employees is a serious task. 

In addition, having a high turnover rate in your for a long period of time will eventually have a negative impact on the ’s finances and resources. 

Therefore, it is important to understand the differences between recruitment and retention when it comes to finances, time, and human resources. 

Of equal importance, you need to know that there are some instances when employee turnover is not a bad thing. Even though turnover usually has a negative connotation, retaining employees who are performing poorly in the can be worse.

A poor performance, absenteeism, or making expensive mistakes can be detrimental for a . Therefore, letting these kind of employees go can lead to growth. 

Recruitment vs Retention 

In the past, recruiting new talents was the most important task for human resources managers. However, according to Sowelo, the same study revealed that the top priority today is employee engagement and employee retention. 

Things have changed over the years. HR leaders are now putting more effort into improving the employee’s overall experience in a so the turnover rates stay low. 

The reason for this is recruiting new talents costs a significant amount of money. On the other hand, retaining employees can save your valuable resources such as time, money, and overall performance. 

For instance, a has to spend a significant quantity of money and time searching for the right talent. This includes interviewing, paying recruitment agencies, screening, advertising, and more. 

According to TinyPulse, a can easily spend 33% of an employee’s annual salary recruiting new talent. Moreover, recruitment fees, the training process, and productivity are three more factors that make the recruiting process more expensive. 

Because of this, high turnover rates for an extensive period of time can have a tremendous negative impact on a . 

Nowadays, one of the most popular topics among leaders, seniors and executives in conferences around the world is how to keep employee turnover rates low by increasing employee engagement and general satisfaction in a . 

According to them, this is the key factor to keep turnover rates low. It’s all about making employees feel like they made a good choice when they decided to become part of a . 

Say Goodbye to Employee Turnover

As you can see, the best way to have a low turnover rate in your is by being proactive. By organizing the internal processes in your , you can prevent turnover rates from being too high.

The other component is to offer an attractive salary and benefits that fulfill employees’ expectations. Also, give them opportunities to grow in the and give them feedback and praise. Don’t forget to allow employees to demonstrate their value and give them the opportunities to do so. 

And remember, your first line of defense to prevent high employee turnover rates in your is to hire the right people.

Good Luck!