Is your company constantly having to replace employees, especially in critical positions? Your company may be experiencing high employee turnover or a high number of old workers leaving your company in a span of a year.

Turnovers are not uncommon as employees come and go for many reasons. Some may leave the company because their contract has expired, retired, or the company is undergoing restructuring or layoffs. Others may leave voluntarily because they found a new career or are no longer happy with the company. But, if the number of employees leaving is high and constant, it may signify that something is wrong and affects your company if it is not resolved.

Here are the reasons why it is terrible to have a high employee turnover:

Lowers Employee Morale

High turnovers can affect the remaining employees’ morale, especially if the people leaving the company leave their tasks and responsibilities unfinished or unattended.

The remaining employees will be overworked since these tasks and responsibilities will be transferred to them, adding to their already challenging tasks. New employees will not escape this challenge as they will have to fill the void even though they are not experienced enough to handle their new assignments.

If the morale is low, it would be nearly impossible to attract new talent to fill up the gaps and keep those in the company already.

Lower Revenue

Another negative impact of high employee turnover is the low revenue the company can bring in. It is said that for every lost employee a company will have, it would lose thousands to replace them.

The reason for this loss is that the company will have to pay for hiring and training expenses and the loss of sales since the current employees cannot keep up with the demand from their customers. Loss of sales can also lead to a loss in customers if it is not resolved quickly.

If you need to pay a severance package, it will cost a lot of money, and it won’t have any returns on your expenses.

Poor Product Or Service Quality

Since there are fewer workers in the company and some may be inexperienced in their tasks, high employee turnover can reduce the quality of your products and services. This problem can be costly for industries where customer satisfaction is vital, such as the F&B, entertainment and hotel industries.

While there can be remedies to compensate for the lack of employees, it can still give customers reasons to check other companies for similar products and services.

Reduced Returns For Investment

Even if you can sustain your expenses and do your best to get new customers, your investment won’t get the returns you are hoping for because you are losing old customers and referred customers due to your inexperienced staff and poor quality products and services. Even if you get new customers, there is a high possibility they won’t return.

If your company is experiencing high employee turnover, check your workspace from top to bottom to see what is causing the turnover. Once you see it, apply strategies to improve the situation, show your employees that you are doing your best to improve your workplace, and give them reasons to stay on board.

Prevention is better than cure! Here are some of the ways to retain and motivate your employees:
The best ways to motivate your employees
Why Peer Recognition is Important at Work
How Can Companies Make Employees Feel Valued

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6 replies on “Why is it Terrible to Have High Employee Turnover

  1. “If the number of employees leaving is high and constant, it may signify that something is wrong and affects your company if it is not resolved.”
    Quite so.
    I was a labour hire man working for two firms that had recently merged. Honestly, if you told me that they had sat down beforehand and said ‘Let’s make this THE MOST [DELETED] DISASTROUS MERGER THIS TOWN’S EVER SEEN!’ I would have no reason to disbelieve you. Instead of moving to new premises, they brought everything from Company B’s branches, of which there were several, into Company A’s warehouse. Which was already at capacity.
    The mess in the warehouse kept me and a dozen or more men from the agency employed for a year and a half. But the real disaster was upstairs. Sales and admin people were quitting in frustration. The first wave of new arrivals didn’t know what they were in for and about half of them were gone within six months. The second wave of new arrivals had to learn from the remaining first wave who barely knew what to do themselves! Morale was down in the basement. Rumour had it that the company was being ground down so it could be sold to a rival.
    Not to brag, but it was the other agency workers who kept it going down in the warehouse, handling orders and dispatch. I outlasted two warehouse managers!

    Liked by 1 person

  2. You have hit the nail on the head with this post, Kally. It is crucial to understand what is causing the turnover and getting to the bottom of it all. Way back in the mists of time, I was responsible for the organisational development of a reasonable sized local government. The turnover at that time was in excess of 36%. Anyway, we developed a strategy that saw the turnover reduced to 12-16% inside 12 months. What we put in place around work/life balance, equity and professional development lasted over ten years and was considered industry leading at the time.

    Liked by 1 person

    1. I was once in a small company that have weekly turnover. Seriously, It was scary. I left after the first month. The high turnover was mainly due to micromanaging on an intense level by the owner.

      Like

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