Effects of High and Low Staff Turnover in a Business
Staff or employee turnover refers to the number of employees who leave a certain company and are substituted for new ones.
Back when I worked in Groupon Dubai, we would lose at least one employee a week. It was scary knowing that you could be let go or even worse, forced to quit so easily! Management must have thought it instilled an environment of hard work in the workforce, but was this high staff turnover rather beneficial or destructive to the overall team morale? Continue reading to see some of the effects of high and low staff turnover.
Fear Versus Security
Having a high employee turnover in a business instills fear in the employees who work there and reduces their overall morale. They know that it's easy for the organization to replace them if need be.
On the other hand, low staff turnover means that the company values its employees and appreciates their work, which in turn makes workers more secure about their jobs and more productive.
High Cost Of High Turnover
High staff turnover means higher costs for a business. As my boss once explained to me, a company spends a lot of money hiring and training new staff. Companies with low staff turnover spend more time interviewing potential employees to make sure they're exactly right for the positions they are interviewing for before making a final decision.
Achieving A Low Turnover
So how does a company achieve and maintain a low staff turnover? Studies show that decent salaries and better communication between managers and their employees greatly reduce employee turnover by enabling employees to work for longer periods of time at an organization. Finally, being able to progress and get promoted in a company also reduces employee turnover.
To put it in a nutshell, it makes sense for companies to have a low staff turnover for several reasons, including lower costs, better employee morale, and higher productivity.