When you talk about turnover, your mind may immediately leap to revenue – how much money is coming in through sales. But there are other types of turnover in business that carry great significance, and one of these is staff turnover.
According to the Chartered Institute of Personnel and Development (CIPD), the average staff turnover in the UK is 34% a year. Of this, 6.6% is due to employees no longer working, for instance retirement or long-term sickness; with the remainder majority finding jobs elsewhere. This majority is who we are really talking about here.
Such an average will vary from industry to industry. Hospitality has almost double the staff turnover rate compared to financial services.
As you have probably encountered, staff turnover matters because it means more recruitment and training costs to the business, and often the loss of valuable experience for your operations. So it is worth creating conditions which improve your retention rate.
To illustrate the rights and wrongs in this area, we will look at “poor” Random Offices again. This is our fictional company, who make a number of mistakes which exacerbate a poor staff turnover rate. At each point we will cut in with what we would have advised if they were an Advice Line client of ours.
Random Offices had a staff turnover of 45% last year
Random offices is in crisis with nearly half the workforce having changed in the past year. Here are a few of the areas where they are going wrong which would contribute to this high figure. Paying below market remuneration would be an obvious place to start for high staff turnover, but that is not the issue in this case study.
Poor recruitment
As they are constantly understaffed, their recruitment process is not thorough; but by employing less suitable staff and hoping they will make it, just confounds the problem.
Our advice: They should screen candidates better, and be clear about the knowledge, skills and attitude they need to do the job and add value to the company.
No training and development
Random Offices has got no formal onboarding programme to support new recruits nor do they have a training programme or culture of learning. Not only does this allow stagnation of productivity, but it is a red flag to ambitious employees who want to do well for themselves and the company.
Although they may be being paid reasonably well now, they feel they are being held back in their role and do not have a clear pathway to promotion. When they realise that nothing will change, they seek a job elsewhere which will keep them on an upward trajectory.
Our advice: Of course in a small company promotions may be limited but training comes in many different forms, and to suit different budgets. When first hiring and during appraisals find out what the ambitions of staff members are. Equally, consider yourself where the skills gaps are and what will benefit the business. Use the information gained to shape a learning and development plan.
There are many different directions open to you, but whatever you choose should feel like an investment rather than a cost. We can advise on developing a skills matrix matching it to a learning and development strategy as well as, where appropriate, provide a wide range of eLearning courses and in-person workshops.
A lack of regular appraisals
Random Offices only conducts performance appraisals once a year, which may not be working for them in isolation. In fact, by their own staff turnover figures, around half their workforce may never experience an annual appraisal!
Our advice: Managing performance with well-structured and regular 121s, are an important communications tool and feedback loop. Goals can be set and checked in on, and as highlighted in the previous section training opportunities can be identified. The annual appraisal is then a well-documented year’s performance. It is a space in which employees can share information which may benefit the company or help you gauge their sentiment about career choices.
Poor company culture
The shortcomings of Random Offices management translates into a poor company culture. Only a vague sense of career and personal progression, inadequate structure to set goals and celebrate achieving them, as well as feedback the employee experience, all add up. It is a space where stress can flourish, where teamwork cannot develop and people can harbour grievances.
Our advice: Culture can be a woolly word, but a good company culture is a key building block of business success. Reviewing how achievement is recognised, both from management and peer-to-peer, ensuring your company is a place where people “feel” they can develop and nurturing team spirit are all ingredients to a positive company culture.
Help from The HR Dept
If you are dissatisfied with your staff turnover rate, no matter what the level, and would like professional advice in improving it get in touch. Whether it is through the long-term best practices we will help you instil through our Advice Line, or a one-off special project we will have the solution for you.
