Losing employees can be scary. Sure, there’s a certain amount of turnover that’s to be expected, but how can you know if the turnover in your organization is normal — or indicative of a larger problem? In a year where the number of Americans quitting their jobs surged to the highest in 16 years according to ZeroHedge, this is something that’s on the minds of HR leaders more than ever.
Comparing to industry averages is a good place to start. Using data from Compensation Force and CompData, we created a simple bar chart outlining the average voluntary and total turnover rates in major industries in 2016.
As you can see, there’s a large range from industry to industry. Less-stable industries like hospitality shouldn’t be as concerned if they see pretty high turnover, while more traditional industries like insurance and utilities should expect to see much lower numbers. Calculate your organization’s turnover rate — if you’re not sure how, you can use this simple calculator for a quick number, or this in-depth process from SHRM for a more accurate calculation — and see how you stack up.
What if You Fall Short?
Barring a major company event like layoffs, if your rate is above average for your industry, it should be a red flag that something needs to change. Even if you’re within a healthy range, looking for opportunities to reduce employee churn should be something that’s on your to-do list.
After all, processing employees who are leaving and hiring and onboarding their replacements is not only a time-intensive process for HR teams, it’s stressful for the employees having to transition knowledge and learn to work with a new colleague, and expensive for the the organization — replacing an employee can cost over two times their salary, according to The Wall Street Journal.
The reasons employees leave are vast. From a bad manager to a broken company culture — the causes vary so much from organization to organization. If your turnover seems high, starting with an honest evaluation of exit interviews and looking for patterns can be a great place to start to find the biggest pain points at your company.
An Easy Way to Improve Retention
That said, there is one piece of low-hanging fruit than any organization can use to improve its employee retention: implementing real-time feedback. Data shows that organizations that have some sort of continuous performance management system have 34 percent lower turnover than organizations that don’t.
Professional development is more important than ever to employees; they want to feel like they’re growing, or they’re going to go somewhere else. This is even more true for millennials, the most famous job hoppers of them all. If your organization is still relying on annual or semi-annual reviews for feedback, employees may feel like their chances to explore growth opportunities just aren’t happening quickly enough.
Plus, real-time feedback can help prevent a slew of interpersonal problems that could cause someone to leave, from team conflict over misaligned expectations to surprise over poor performance.
Improving employee retention isn’t going to happen overnight, but if you want to take a powerful step in the right direction, start looking into implementing a real-time feedback system. Your employees will be happier, and so will you.