The end of the year is a common time when most HR professionals are calculating their annually HR metrics. One of the most commonly used HR metrics is a dreaded employee turnover rate. Are you a bit scared to calculate your employee turnover rate?
If you are, this is because everything you know about employee turnover is wrong.
Yes, that’s right. According to a recent research conducted by Work Institute, everything we think we knew about employee turnover is just plain wrong. The company has released its 2018 Retention Report, the only known one of its kind, marking its second study of national workplace turnover and retention. Using a scientifically valid methodology and data from over 234,000 exit interviews, this report uncovers the root causes of turnover and debunks common employee turnover myths.
Here are the top 3 myths about employee turnover that are completely wrong:
Employee turnover is usually mentioned in a negative context. This is because of high costs related to high turnover rates. According to The Society for Human Resource Management (SHRM) research, direct replacement costs can reach as high as 50%-60% of an employee’s annual salary.
However, employee turnover isn’t necessarily a negative thing. If the high turnover is the consequence of the fact that poor performers are leaving a company, it can actually be a good thing. It can mean that your company is keeping only A-players, not wasting time and money on poor performers, which is definitely a good thing.
You might think that an employee turnover is a normal common process that happens in all companies. Especially in the last few years when the unemployment rates are lower than ever and candidates are in demand. However, this is only partially correct.
Work Institute estimated that 42 million, or one in four, employees will leave their jobs in 2018. Work Institute has also found that nearly 77 percent, or three-fourths, of that turnover could be prevented by employers. Their 2018 Retention Report revealed the 50 most important reasons employees decided to leave their jobs and grouped them into 10 categories, seven of which are considered more preventable by employers.
You might think that it is only common sense that your employees leave because they have been offered a larger salary by some of your competitors. A salary that big that you can’t compete with it. However, your assumption is probably wrong, according to Work Institute.
Work Institute has found that the top five categories of reasons employees leave their jobs are:
So there you have it. Now you know the truth. Are you ready to calculate your own employee turnover rate for 2018?