Turnover: Taming the Monster in Your Workforce

In a world where employees are constantly seeking their next big opportunity; be it for financial gain or self-actualization, can we really reduce or even eliminate turnover? Employee turnover is a significant challenge for organizations, often underestimated in its impact because Human Resource professionals often get caught up with focusing on other functions of HR or trying to fill a gap to keep the ball rolling.  Research suggest that the true cost of turnover encompasses both direct expenses such as recruitment, training, and administrative processing and indirect costs, including lost productivity, decreased morale, and the erosion of organizational knowledge. Estimates suggest that replacing an employee can cost between 30% to 200% of their annual salary, depending on the role and industry. Oftentimes turnover is trivialized, as management often says ‘well other companies are facing this as well, it is not just us.’ This mentally has caused many organizations to overlook addressing this issue because it is painted as the norm and has become widely accepted. 

Despite the negative impact of employee turnover, many companies adopt superficial solutions to address turnover, akin to placing a bandage on a sore without treating the underlying cause. Such approaches may offer temporary relief but fail to resolve the core issues leading to employee dissatisfaction. For instance, increasing salaries or offering bonuses might provide short-term motivation, but if fundamental problems like poor management, lack of career development opportunities, or a toxic work environment persist, employees are likely to remain disengaged and eventually leave. On the topic of making changes, it is important to note that not everyone is motivated by ‘money’.Frederick Herzberg’s two-factor theory (1950s) emphasizes that salary is a hygiene factor. This means that while it does not actively motivate employees, its presence helps prevent dissatisfaction. Herzberg identified true motivators as factors like recognition (such as praise or rewards for achieving goals), opportunities for achievement and growth, advancement, and responsibility, such as having the autonomy to make decisions. This explains why some highly paid employees choose to leave their jobs in pursuit of peace of mind.

A story shared on LinkedIn by a former employee of an organization illustrates this point. After submitting his resignation, his supervisor approached him, stating that the company could not afford to lose him and offered to speak to management about a salary increase if he stayed. However, the employee declined, saying he was ready to move on. The next day, the Human Resource Manager also approached him to ask why he wanted to leave and offered another salary increase. The employee found this approach unappealing, stating that if he were truly valued, the raise should have been offered before his resignation. Ultimately, he revealed that his decision to leave was driven by the organization’s toxic culture, which he was eager to escape.

In an article published by Time magazine, written by Kang, Daniels, and Schweitzer (2024), research indicates that employees often quit due to sequences of challenging tasks without adequate support, rather than isolated difficult tasks. This insight suggests that organizations should focus on task management and employee support systems to enhance job satisfaction and reduce turnover. In light of this, it is crucial for organizations to have a proper system setup from the first day an employee enters the organization. Employees must fully understand their place in the organization and where to go when they are in need of support from day one, this sets the pace for a productive work environment. Organizations cannot continue to hire employees without a plan in place, and with little to no training. In addition training should not begin and end at the onboarding process, but should be a continuous experience for all employees.  

Other research findings indicate that employees have several reasons to leave their workplaces, such as job stress, job satisfaction, job security, work environment, motivation, wages, and, Rewards. In addressing these reasons organization must stay away from the ‘one-size fits all’ approach understanding that what works for one organization will not work for all and that even though these issues are similar across organizations and industries, there are different ways to address them but it begins with understanding the workforce. Generally, it is recommended that in solving the highlighted issues, organizations should invest in comprehensive employee engagement initiatives, provide clear career progression paths, and foster a positive workplace culture to retain top talent.

In conclusion, to tame the turnover monster, companies must look beyond quick fixes and delve into the fundamental causes of employee dissatisfaction and spend time understanding the workforce and what appeals to them instead of taking generic approaches. By way of doing this, organizations can develop sustainable strategies that enhance employee satisfaction and retention, ultimately leading to improved performance and reduced costs associated with turnover.