Employee turnover refers to the total number of workers who leave a company over a certain time. It is an indicator of a company’s work culture, effectiveness of hiring policies, and employee management. Employee turnover rate is a crucial metric to measure the human resources department and how effective their management is. Employee turnover is broken down into two types: voluntary, where an individual chooses to leave the company, and involuntary, where an individual is terminated or laid off.
Employee turnover matters because it is more expensive to replace an employee than to retain them. Restarting the recruitment process takes time and money, and if there is a high turnover rate, extra expenses will have to be used for recruiting a new employee. Furthermore, with constant high turnover, there will be lower employee morale, a weakened company culture, a shortage of skilled employees in the workplace, and a loss in team synergy.
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