How High Employee Turnover Affects Businesses
Many companies are concerned solely with making money. While high revenues are important, CEOs also need to focus on what else is important: employees. Without employees, companies cannot run smoothly. Executives would be scrambling to do everything on their own.
Employees leave companies when they are frustrated. They seek greener grasses elsewhere and when that happens, companies feel it. High levels of turnover affect companies of all sizes.
When employees leave, time is spent recruiting, training, and onboarding new employees. This takes time away from other tasks, leading to reduced productivity. Here’s a look at other issues companies face when turnover is high.
Decrease in Productivity
Studies show that lost productivity affects companies greatly — to the tune of $1.8 trillion annually. A negative employee experience can cause disengagement. Losing a large number of experienced employees due to voluntary turnover can have a ripple effect on a business. Productivity is impacted across the organization, especially when key employees leave. Their responsibilities must be transferred to someone else, which means a shift in resources and a burden on existing staff. The remaining employees may become overwhelmed with an increased workload, which means that productivity takes a backseat as workers try to get everything done on time.
Low Morale
High turnover increases stress on the remaining workers who must carry the load. This can cause them to feel overworked and burned out. This creates a cycle of disengagement and attrition, leading to a downward spiral of poor morale. This is especially true when close friends decide to leave. When this happens, the employee who is left behind typically becomes disengaged and distracted. They may wonder whether they should look for a new job themselves.
Difficulty Recruiting
High turnover can harm your company’s reputation, and this makes it hard to attract top talent. If your company is perceived as a revolving door, potential employees may be hesitant to apply or join your team. People tend to make assumptions about companies with high turnover, and they may not be aiming to apply for job vacancies if there is concern over a poor company culture.
Next Step: Making Changes
If your company does have a high turnover rate, it’s important to understand how you can change this. Ideas include:
- Monitor trends. Regularly track and analyze employee turnover to identify root causes. Common issues include inadequate benefits, low pay, poor onboarding processes, weak company culture, ineffective management, and poor work-life balance.
- Gather employee feedback. Conduct workplace satisfaction surveys to understand employee concerns, motivations, and suggestions for improvement. Use this feedback to make changes.
- Improve workplace culture. Launch initiatives that make your company a more desirable place to work. Focus on recognition, flexibility, inclusion, and team-building.
Learn More About Corporate Law
Corporate law encompasses many aspects. Companies tend to focus on other aspects besides employees happiness and productivity and this leads to high levels of turnover, which is frustrating to everyone.
Orlando corporate lawyer B.F. Godfrey from Godfrey Legal understands the complexities of running a business. We can help you understand what key decisions need to be made to make your business viable in the long term. Fill out the online form or call (407) 890-0023 or schedule a consultation today.
Source:
stratus.hr/resources/effects-of-high-employee-turnover
