Employee Turnover : What Causes It and What Can HR leaders Do About It!

Employee Turnover

What is employee turnover?

Employee turnover is the rate at which employees leave their jobs. It measures how dedicated and loyal a company’s employee base is and can often be an early indicator of company health. Employee turnover is a massive problem in the current times as the annual turnover rates of various organizations are going up every year. Employee turnover is a significant concern for businesses of all sizes, and it can hurt employee morale, productivity, and retention rates. There are various types of employee turnover, including:

• Voluntary turnover – An employee decides to leave their job for any reason. Irrespective of the organization’s inabilities, this may also happen due to a change in career path or some personal issues.

• Involuntary turnover – An employee is dismissed, quits, or is fired from their job. In some cases, companies may terminate employees due to downsizing or company reorganization.

• Disciplinary turnover – An employee is either fired or suspended for misconduct during their tenure.

Employee turnover can be costly, as hiring or recruiting new employees as replacements can cost up to 50% of an employee’s annual salary. Turnover costs the U.S. economy an estimated $48 billion annually. The average number of employees who leave their jobs is going beyond limits by annual turnover rate slowly going beyond 60% solely in the U.S. Out of this, 60-70% is voluntary turnover. But why do companies keep on losing their top talent? What are the reasons behind these high turnover rates? Let us explore that in the next section.

What are the leading causes of employee turnover?

Several factors can contribute to employee turnover, but some of the most common causes include:

Lack of motivation or lack of job satisfaction

One of the most common reasons employees leave their jobs is the lack of motivation or job satisfaction. When employees don’t feel engaged or inspired at work, it can be challenging to focus on their duties and motivate themselves to achieve the goals set by their employers. Additionally, when employees don’t feel positively impacting the company, they may feel dissatisfied and want to find a new job. 

Hostile and challenging work environment

Workplace disputes and hostile work environments can be some of why employees decide to leave their job. Many employees feel uncomfortable and unsupported at work and may find the environment hostile or difficult. It often leads to stress, which can eventually result in quitting. It usually happens because employers have a terrible reputation for firing employees or mistreating them. This often leads to less-motivated employees, who are less likely to give their best effort. These employers often have a more difficult time retaining quality employees, ultimately hurting productivity. 

Ineffective communication between employees and their supervisors or co-workers

Ineffective communication between employees and their supervisors or co-workers is another critical reason behind employee turnover. Employees feel frustrated and unappreciated, eventually deciding to leave their job. Poor communication can also lead to misunderstandings and conflict between employees and supervisors, ultimately leading to employee turnover. Further, not having effective communication in place may restrict employees from giving their inputs or suggestions for the business interventions. When employees feel that they don’t have a say in the business, they eventually lose motivation and decide to leave their job. 

Poor benefits package offered by the company

A survey by Forbes in 2019 revealed that lack of job benefits is one of the three main reasons why employees leave their jobs. If your company doesn’t offer a decent benefits package, it will be hard to retain your employees. Plus, replacing an employee who leaves often costs you time and money, increasing over time. The Bureau of Labor Statistics has revealed that employees worldwide demand more and better benefits from their employers. More than 66% of employees globally would like to expect a retirement account or pension saving plan. Therefore, as these benefits are in demand, not having them in place will increase employee turnover.

Employees not being appreciated and valued

The main reasons for employee turnover can vary, but the one constant factor is that employees feel unappreciated and unvalued. When employees don’t feel appreciated and respected, they are more likely to leave their jobs. Companies often avoid addressing this issue, instead opting to replace employees with new ones who may be less demanding and more complacent. But, this may lead the organization to an ongoing loop of turnovers and backfilling, and it will restrict productivity and create a hostile work culture that disrupts routine office operations. 

Uninspiring job roles

With the constant digital disruption and changing times, employees are constantly looking for new opportunities. They are aiming to challenge themselves in new ways. With so many job roles available today, it can be challenging for employees to find something that truly inspires them and motivates them to stay with the company for an extended period. If the job role offered is uninspiring and doesn’t provide employees with the opportunity to learn and grow, they will eventually move on and look for a job that offers more fulfillment.

Ineffective use of employees’ talent

There are several reasons why an employee might decide to leave their job, but one of the leading reasons is often ineffective use of their talent. It refers to employees who are not being used to their full potential or are not given adequate resources to utilize their talent and serve their best for the organization. When an employee feels like they are not being used to their full potential, staying motivated and engaged in the workplace can be challenging. And when that employee eventually leaves, it can be hard to find a replacement who is as motivated and committed to the company’s goals.

Lack of opportunities for career growth or advancement

Employee turnover is a costly affair for any company. You can often trace it back to the lack of career growth, or advancement opportunities employees may be looking for. It means not giving employees the chance to take on new challenges, work on new projects, and learn new skills. If you haven’t been able to offer your employees meaningful and stimulating opportunities for growth, they may begin to look elsewhere for a career. 

Role of an Effective Employee Engagement strategy in bringing down Employee Turnover

Employee turnover is a significant challenge that HR leaders face regularly. Employee turnover is costly not just in terms of lost productivity but also in terms of recruitment, training, and lost opportunity costs. It is essential to have an effective employee engagement strategy to decrease employee turnover. You should design an engagement strategy to engage employees with their work, company, and fellow employees. It should also encourage employees to stay with the company for an extended period and provide support and resources to help them achieve their career goals.

You can help build trust and encourage them to stay with your organization by engaging employees. A well-rounded employee engagement strategy will ensure that employees are engaged from the day of the onboarding of a new employee till their termination (involuntary turnover) or voluntary turnover. By implementing an effective employee engagement strategy, you can help reduce employee turnover and boost your organization’s bottom line. You can also create a positive work environment conducive to motivation and productivity.

How can HR leaders reduce employee turnover?

HR leaders can address employee turnover issues head-on with the right strategy and commitment. By doing that, they can reduce its adverse effects on the business. A well-rounded employee engagement strategy will enable HR leaders to undertake several interventions to reduce the employee turnover rates of their organization. Those interventions include:

Developing and implementing a workplace culture that is conducive to employee satisfaction and motivation

The Employee Engagement Strategy is a crucial component of any HR leader’s toolkit. It helps develop and implement a workplace culture conducive to employee satisfaction and motivation. In this way, you can reduce turnover rates and absenteeism, and employee productivity can be increased. Apart from this, the strategy can also help in improving communication and team building. HR leaders can create an attractive environment for prospective employees by designing an engaging workplace culture. This will encourage them to stay with the company for an extended period.

Enabling managers to manage turnover in their span of control

Managers are the ones whom the employees of the company directly report to. The way they manage the workforce is one of the critical drivers of employee retention or turnover. These managers usually lack the potential to take the proper steps to reduce the turnover levels. They require handholding to prevent or reduce turnover in their span of control. By making these managers an integral part of the Employee Engagement Strategy, HR leaders can enable managers to reduce turnover rates. It will provide them with the proper support to identify and assess the employees’ level of engagement in their span of control. Managers can use this information to identify warning signs. They can then take corrective action before a situation escalates and leads to employee departure. Additionally, the strategy can help managers understand their employees’ needs and motivations. This information can help develop career paths that align with employee interests.

Ensuring that the job roles are challenging enough to use employees’ talent effectively

By making employees’ roles challenging, you can tap into their full potential. Employees are more likely to stay with a company if they feel their job is challenging and effectively use their talent. Too often, employers fill positions in a hurry without finding the best person for the job. This can lead to employees feeling unchallenged and unfulfilled in their work. That can cause them to look for other opportunities. When job roles are well-defined and challenging, employees are more likely to feel that their talents are being put to good use. This can lead to a reduction in employee turnover and increased productivity.

Encouraging career development opportunities for employees through regular feedback and training

By creating an engaging environment and providing employees with the opportunity to develop their skills and career, you can encourage them to stay with your company for a more extended period. The HR leaders should put structures to give regular feedback and training. Doing that will help employees stay up-to-date with the latest industry trends and developments. When employees see that the organization is investing in them and their career growth, they will get the motivation to stick around longer.

Providing adequate benefits packages that are attractive enough to keep employees with the company long-term

An attractive benefits package that is appealing can keep employees with the company longer. By understanding employees’ individual needs and wants and then tailoring the company’s benefits package to meet those needs, HR leaders can help keep their employees happy and content with the compensation. It will help reduce recruitment and employee turnover costs. Additionally, it will help keep employees satisfied with their work and motivated to remain with the company. But remember, just this alone will not solve the turnover challenge.

Creating a clear and concise job description that accurately reflects the responsibilities of each position

By defining and clarifying the responsibilities of each position, HR can create a clear and concise job description. That description will accurately reflect the responsibilities of each position. It will help employees know what doe their job expects of them. That will reduce their chances of feeling disappointed or frustrated with their job. A clear job description will also allow employees to maintain a good work and life balance. In addition, it will also help to build team chemistry. It will encourage employees to stay with the company for more extended periods.

Addressing difficult situations such as a hostile work environment head-on

Human Resources professionals have the difficult task of not only ensuring that a company complies with the law but also of creating and maintaining a productive and positive work environment. When faced with difficult situations, such as a hostile work environment, HR professionals can play an essential role in reducing turnover. Often, difficulties or hostility in the workplace are not addressed head-on. That can lead to employees leaving the company. By recognizing and addressing these issues, HR professionals can help create a more positive and productive work environment, which can reduce employee turnover.


Employee turnover is a fundamental problem in any organization. It can often be costly and disruptive. It can lead to lost productivity, decreased morale, and a loss of trust between employees and management. The key to reducing employee turnover is to understand what causes it. Further, you should use an effective Employee Engagement strategy to reduce employee turnover. This article provides a detailed overview of the causes of employee turnover and strategies for reducing it. If you’re interested in learning more about Employee Engagement or want to improve your organization’s turnover rate, check out our website!

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