What is Employee Turnover?
Employee turnover rate is the percentage of staff turnover over the average number of employees.
While employee turnover rates might describes the employee behaviour, in reality, the employee turnover rate is more an indicator of a company’s working condition than of the people.
When working conditions are sub-par, be it due to insufficient salaries, little to no career development opportunities, employees not being taken cared for, or poor company culture, the staff turnover rate is expected to be higher.
What is a good employee turnover rate?
A low employee turnover rate on the other hand is a good indicator of a strong company. Generally speaking across Asia Pacific, Human Resources Online reported that the average voluntary turnover rate stood at 11.1% as of 2021.
This number may be higher for millennials, at around 50%, 40% for generation X’ers, and as low as 10% among baby boomers. So when looking at your company staff turnover rate, it’s important to take into consideration the context such as the demographic, age group, market and industry you’re looking at.
Why is it important to measure employee turnover?
For companies, there are quantifiable costs that comes with a high turnover rate. One of the more evident costs are the ones tied with the hiring process. The hiring expenses for the replacement of an experienced employee will most likely be higher as its usually take longer to find a match.
According to the Missouri Business Net, it costs on average a third of a new hire’s annual salary to replace an employee. These costs typically include recruitment ads, time dedicated to the hiring process, and labour involved in training
Hidden Costs of High Employee Turnover
These costs include long term impacts to the company’s wellbeing including:
Low workplace morale
With the departure of employees in an environment where there is a high staff turnover, the weight of certain tasks will undoubtedly fall on people who are still working in the company. As such it can become a point of stress, causing frustration and low morale that of which new employees are not immune to.
High employee turnover can also have a social impact. Seeing others leave can have a negative influence on those who are still with the company. A high turnover rate can also lead to the departure of staff who were originally on the fence, or at least of lowered motivation to work given the shaky nature of the workplace.
Suffer in quality
For roles that deals heavily with other people there may be a greater impact on the departure of an employee, especially in the case where client relations are involved.
A high employee turnover rate may mean clients are constantly being served by different people with no key point of contact which can be a point of frustration for clients. The inconsistent point of contact also means the company loses out on the opportunity to build trust with its clients.
Disruption in productivity
This may be more evident in the loss of senior and experienced employees. However, the problem actually doesn’t resolve after a replacement is secured as there is time required for them to get familiar with the work environment.
How to Avoid High Employee Turnover?
Across Asia Pacific, Singapore employees have the highest expected turnover rate according to Workday, with 46% likely to leave their jobs within a year.
Your staff matters
As much as people like saying that clients come first, it is important to remember to also take care of your staff as they are what makes up the organisation. By having the top people and serving them right, will your business prosper in the long run.
Know the cost
As a leader, when you have a lot on your hands, it may be easier to set aside the employee turnover rate as a percentage and just go on with your work. However a high staff turnover rate is not small matter and it would be unwise to dismiss it without properly weighing the cost and impact it has on the business.
Invest in HR
When it comes to turnover, HR can be your best bet to dealing with the problem. Invest in HR, think about employee engagement, invest on training programmes, and incentive schemes and recognise people’s efforts through rewards. All these are great ways to combating a high employee turnover rate.
Why is employee engagement important?
In order to have good manpower, it’s essential to have great employee engagement. Motivated employees who think positively will pass on their enthusiasm to clients, and clients are more likely to engage your company’s services if they are served by passionate employees.
How to Improve Employee Engagement?
In order to achieve employee engagement, we need to appreciate our employees, keeping them enthusiastic and motivated. Below are some ideas you can take on board to keep your employees happy through employee engagement tools:
8 Best Employee Engagement Tools
1. Show interest in your employees’ professional development
- Regularly catch up with your employees.
- Listen to their development goals.
- It may seem difficult to achieve these goals, but we can show interest in their goals and think of similar developments that they might be interested in too.
2. Send thank you notes to employees
- Acknowledge when they have done something that helped you and send them a simple thank you card with a simple message.
3. Offer immediate praise
We don’t need to wait until an employee’s performance review in order to praise them for their hard work; praise the hardworking employee in front of their team, so that the others can also offer praise and the employee can take pride in being recognised for their achievements.
4. Suggestions/ideas for the team
- Encourage your employees to focus on ideas that would benefit their team and support their role.
- From a management perspective, this is a useful tool to improve the employees’ productivity.
- From the employee’s perspective, they will be happy if the company chooses to adopt their ideas.
- If employees are shy to share their ideas verbally, you could have a suggestions box, although the most effective way would be to create an atmosphere in which the employees feel comfortable enough to share their ideas verbally and personally.
- You can also encourage your employees to share their ideas about smaller things, such as suggesting the venue for your next company outing, or even volunteering to help plan the event. It is more beneficial for the company to do something that is preferred by the employees as it makes them feel heard.
5. ‘Best Employee’ award programme
- Ask your employees to vote for who they think is the best employee. This can be done monthly, quarterly or even annually.
- Have a board in the office where you can display a photo of the winner.
- Offer the winner a small token gift such as a shopping voucher, or let them leave work a few hours early.
- You could arrange a lunch for the best employee and the CEO of the company, in order to make them feel that they are important.
6. Incentives for other employees
- Apart from the best employee, the company should also reward those employees who consistently do their job well. It is not always easy to find good and committed employees.
7. Support flexibility
- If there are some urgent matters that the employee needs to attend to, encourage team managers to support flexibility where it is required, especially now in a post-covid world where hybrid working has become the norm.
8. Celebrate birthdays
- Set up a reminder for each employee’s birthday and make a point of saying ‘happy birthday’ and celebrating with a birthday cake, or a birthday lunch. If there are a lot of employees with a birthday in the same month, you can do a joint celebration for all of them to be more economically friendly.
Besides employee engagement, a work-life balance is probably one of the most important factors for candidates when considering a new job and one of the most significant factors that can lead to employees wanting to leave their current jobs.
What is the definition of work-life balance?
Work-life balance is a concept that defines a fair prioritisation between an employee’s work and their lifestyle. An employee’s lifestyle can include family, travel, health and leisure. An increasing number of employees weigh work-life balance as more important than salary.
Why implement work-life balance strategies?
It is very important to implement work-life balance strategies for the following reasons:
- Higher productivity and work efficiency
- Retention of talent
- Less burn out, leading to reduced leave or sick leave taken by employees
- Improved customer experience
- Improved employee engagement and satisfaction
How can work-life balance strategies be implemented?
There are several ways in which work-life balance strategies can be implemented
- The first of these is to introduce a flexible work arrangement for employees, allowing them to have flexible working hours and even work from home:
- Given today’s technology, flexible working arrangements mean a reduction in travel time from an employee’s home to their work place, subsequently increasing their work output.
- Knowing they have limited time to finish each project, employees with flexible work arrangements will concentrate more on finishing work quickly and efficiently.
- Employees are responsible for their own performance and getting their projects done on time, therefore maintaining a greater degree of independence and self-motivation, which leads to better employee engagement and satisfaction.
- The second suggestion for implementing work-life balance strategies is an increase in annual leave:
- Recently the Singapore government has implemented additional leave that promotes a better work-life balance. For example, childcare leave has this year been extended to six days per year. This allows parents more opportunities to stay at home with their children, meanwhile employers can be reimbursed by the government for the last three days of childcare leave taken by employees.
- The government will most likely be extending paternity leave to a month next year. Again this is another example that leads to work-life balance and promotes family in Singapore.
- With regards to resigning employees, employers have the chance to offer that employee sabbatical leave in order to retain their position should the employee need some time off for whatever reason, without having to lose that employee.
Do you have a turnover problem? Let us help you. Links is an award winning recruitment first with over 20 years of recruitment in Asia. Get in touch with one of our representatives today and build your winning team.
- How HR Can Help Maximize Employee Productivity
- 5 Signs You’re About to Have a Turnover Problem
- Delighting Your Staff = 1st Step to Pleasing Customers
- The Secret to Better Work : Fight Office Fatigue
- 5 Key Factors That Make People Happy at Work
Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, Employer of Record (EOR), recruitment and more! Contact us for more information on how we can help leverage your HR function.