Causes of Employee Turnover

Employee turnover is the difference in the rate of employees leaving a company and new employees filling up their positions. Nowadays, it is becoming a major problem among most companies, especially in low-paying jobs.

There are many aspects that play a significant role in the employee turnover rate of a particular company. Such aspects can stem from both the company as well as the employees. The employers generally give more importance to the turnover rate, as it is a very expensive aspect of the business.

When employees leave the company, the employer has to incur a considerable amount of direct and indirect expense. These costs normally include advertising expenses, headhunting fees, resource management expenses, loss of time and productivity, work imbalance, and employee training and development expenses for new joiners.

The company may quarterly calculate turnover rates to meliorate the factors causing the turnover. If the company determines the most common causes of employee turnover, it would certainly be able to take the necessary steps for recruiting and retaining well-qualified personnel.

This is the most common cause of the turnover rate being so high. Employees are in search of jobs which pay well. If the companies which they are working in don't offer good salaries, they tend to hunt for jobs that pay them considerably well.

In order to resolve this problem, the employers should make it a point to offer salaries that would be competitive enough to retain and attract well-qualified and talented personnel. Unsatisfactory performance appraisals is also one of the reasons for employees leaving a company.

Employees always flock to companies who offer more benefits. There are many employees who are not aware of the benefits that are provided to them in their compensation package.

Employers need to reduce their bureaucratic procedures in order for the employees to receive the best available benefits without any difficulty. They should make a note of what all benefits other organizations are providing, which may attract their current employees.

This is the prime reason why many mid-level executives leave the company. Due to no potential opportunity for advancements or promotions, they prefer other companies which may provide them with higher posts and increased compensation packages.

The companies need to evaluate and modify their promotion policies in a fair way which would enable promotions for candidates only on the basis of employee performance.

This is also one of the main causes for employee turnover. Employees prefer to work in an environment which is suitable for them. This is the most common reason why they jump from company to company in just a few months. If they find an appropriate work environment in a specific company, they may work in the same organization for several years.

The companies should analyze and alter their work procedures and policies in a way which would enable employees to use their full potential and even gain significant work experience.

There are many cases where employees have left the company due to no projects or assignments which do not require their full potential. Employees would certainly leave if they don't get experience and are just placed on the 'bench'.

These are some of the principal causes of employee turnover which can surely be avoided by the organizations after taking some necessary steps to better their in-house services towards employees.

However, there are many more causes; such as lack of employee motivation, work pressure, job stress, partiality and favoritism, employee egos and attitudes, poor employee management, etc.