Why is High Employee Turnover Bad

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There are several reasons why high turnover is considered as bad KPI for a company or an organization. These reasons can range from immediate and noticeable effects to long-term, subtle effects that build over time. 

In the short term, outgoing employees create staffing gaps, and recruitment related costs drastically increase. In the long run, a high staff turnover rate inside your company may signal to current employees and job seekers that your organization has a problematic company culture or might not be a great place to work. Although the causes of employee turnover may not be the result of internal issues, it can still negatively impact your business. 

Here are some of the disadvantages of high employee turnover.

  1. Increased recruitment costs
  2. Loss of company and brand knowledge
  3. Decrease in productivity
  4. Low employee morale

  1. Increased recruitment costs -  if a particular company has to recruit employees continuously, it has to bear recruitment cost each time new recruitments occur. This is an unwanted cost for the company.
  2. Loss of company and brand knowledge - Due to the high employee turnover , knowledgeable people will not work continuously for the same company for a considerable period. This could badly affect to the customer relationship & it creates reputation risk for the company.
  3. Decrease in productivity - This could directly affect to the productivity of the company until newly recruited people correctly identifying  their job role & deal with it.
  4. Low employee morale - According to the book of "The Hidden Driver of Excellence" wrote by the psychologist Daniel Goleman, "Low employee morale is a silent killer of workplace productivity and performance. When employees feel down and disengaged, they might meet deadlines, but the work will be subpar, uninspired, and lacking innovation. What's more, low employee morale is contagious."

References

Holliday,M.(2021)What is employee turnover & why it matters for your business.[Online]Available at https://www.netsuite.com/portal/resource/articles/human-resources/employee-turnover.shtml.Accessed on 15th April2022


HR profiling solutions.(2019) Employee turnover: causes,effects, and strategies. [Online]Available at https://www.hrprofilingsolutions.com.au/blogs/aus-blog/employee-turnover-causes-effects-strategies/. Accessed on 15th April2022  




Comments

  1. Rumesh AbeyrathneApril 22, 2022 at 10:48 PM

    High employee turn over makes a huge cost in acquiring new employees, continuing day to day work, reducing employee moral and many conflicts within the organization.

    ReplyDelete
    Replies
    1. Gayan SarathchandraMay 6, 2022 at 7:10 PM

      Yes. High turnover also creates a reputation risk for the company.

      Delete
  2. Anuradha Charuni RathnayakeApril 23, 2022 at 7:23 AM

    Employee turnover is the percentage of employees who leave an organization in a given time frame.
    The exact amount of employee turnover in a business is unavoidable, and that amount depends on the industry. Turnover can result from resignation, dismissal, or retirement. While employee turnover is something that every business experiences, unwanted turnover is the loss of a company of valuable staff that contributes to the success of a business.

    ReplyDelete
    Replies
    1. Gayan SarathchandraMay 6, 2022 at 7:14 PM

      Both voluntary & involuntary turnover create extra cost to the company because of the recruitment process.

      Delete

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