Let’s assume that Sara works out well in her new job. On the other hand, another of your workers decides he can do better elsewhere and finds a job with a competitor. You’ve talked with the departing employee to see if he would re- consider, but he explained that he saw more opportunity for advancement with the other firm. There is nothing you can do about the situation, and fortunately such departures have been rare in your department.
Generally, companies monitor department turnover. As you think about it, you realize that one or two managers in your firm have high turnover rates. The company is aware of this. Turnover—the number of separations from the department during a given time period—is monitored because finding replacements costs dollars, time, and productivity.
Employee turnover is generally considered to be the best single measure of morale: good morale equals low turnover; poor morale equals high turnover. This isn’t to say that companies want no turnover in employees. When employees leave a company, they are replaced with others who bring new knowledge, practice, experience, and skills into the organization. Employees with large salaries may be replaceable with less expensive but equally qualified newcomers. Some positions may be eliminated, merged, or automated.
Through turnover, too, an organization can rid itself of marginal performers or people who are difficult to work with.
On the other hand, recruiting, selecting, and training new employees can be expensive. Exit interviews, severance benefits, and outplacement services also cost. Until someone is hired, temporary help may be needed. Then there is the cost of lost productivity while a position remains vacant.
No one can ignore the disruption on workflow from the loss of a key employee. Remaining employees have to take on more work. Some projects may have to be delayed. If the person who leaves is well liked, department morale may be affected. Other employees may decide to leave, either to join a former colleague at the new employer or to find a comparable position elsewhere.
So some turnover is acceptable, but you don’t want it to get out of control. The question, “How do I reduce turnover?” raises a more basic question, “What makes most employees leave their jobs?” Many managers will tell you that employees leave to make more money elsewhere, but the truth is, money is rarely the only motivator. It may not even be the primary motivator in most cases. Evidence has shown a high correlation between employee job satisfaction and the management style of their immediate supervisor. Employees want to feel that their manager won’t have favorites; will promote open, honest communication; will provide opportunities for them to increase their employability; and will offer opportunities to share their ideas. They also want work that is fun, interesting, and exciting.