In workforce management, employee turnover is unavoidable for organizations. It is classified as involuntary turnover when employees leave an organization against their will due to layoffs, terminations, or job eliminations. In this blog post, we'll understand involuntary turnover, highlighting the various types of involuntary turnover, the reasons behind it, and the strategies to reduce it. 

Types of involuntary turnover

Understanding the various kinds of involuntary turnover is necessary for organizations to deal with empathy and clarity. It reduces legal risks and maintains a positive work environment.

Performance-related turnover:

Performance-related turnover is when the employee’s performance doesn’t match the company-implied performance standards. Organizations can fire employees who often fail to perform well enough to maintain company standards and productivity.

Disciplinary turnover:

This type of turnover happens if an employee breaks the company’s code of conduct, behaves in a way that violates the company’s rules, or breaks the law. Workplace harassment, theft, or leaking of sensitive information can often be the reason behind this type of involuntary turnover.

Restructuring-related turnover:

Mergers, acquisitions, or downsizing can often be the reason behind restructuring-related turnover. The designation that was so far quite important might become redundant due to restructuring.

Reasons for involuntary turnover

Involuntary turnover can be a costly affair for companies. Statistics show that the cost of replacing an individual employee can be up to twice the employee’s salary. Finding the root cause can help reduce the involuntary turnover rate.

1. Poor job fit

While recruiting new employees, if they are not placed in designations that suit their skills,  background, and career aspirations, it results in a poor job fit. It leads to a lack of productivity, resulting in involuntary turnover, and costs the company a lot. To avoid this, proper job matching during the hiring process is essential. Predictive analysis can help in finding the right matches.

2. Lack of training and development

According to the statistics, only 29% of employees are satisfied with the training and development they received at their respective organizations. Training and development programs aligned with company goals and employee career growth can help retain talent.

3. No open communication

Communication is the key to avoiding escalating situations between employees and managers. Lack of regular feedback from employees or acting on the feedback provided can also be the reason for frustration in employees.  Fostering a positive environment where open communication is encouraged with confidentiality and anonymity can improve company culture.

4. Ineffective management

Employees thrive on the support and appreciation they receive from their managers. A toxic workplace culture where managers do not play their roles correctly and fail to guide, support, and appreciate employees might lead to non-productivity at work. Training managers for leadership roles so they can guide and support their subordinates is necessary.

5. Organizational restructuring

Organizations often have to restructure their management system due to mergers and acquisitions. During these processes, specific job roles become unnecessary. Organizations must let go of these employees to ensure proper business growth and revenue generation.

6. Economic situation

Often, industries face economic recession, or the company goes through a rough patch financially and must resort to cost-cutting. This can increase involuntary turnover.

7. Failing background checks

Providing false records, failing drug tests, and hiding critical information lead to employee firing right after the recruitment.

8. Consistent poor performance at work

Last but not least, performing poorly at work constantly is one of the biggest reasons for involuntary turnover. Most employees need encouragement, guidance, and support in development programs to help them achieve success at work. Organizations must provide them to ensure employees can reach their full potential at work.

inFeedo’s AI action planning powered by GPT-3 is an excellent feature that uses cutting-edge technology to develop strategic plans for at-risk employees. This enables HRBPs to brainstorm solutions, create actionable strategies, and track real-time progress to avoid involuntary turnover.

Involuntary turnover rate and its significance

The involuntary turnover rate indicates the percentage of employees who leave the organization against their will. Understanding and analyzing the numbers will help reveal fundamental issues in an organization and help turn employees into brand ambassadors.

Calculating the involuntary turnover rate

• First, find the total number of employees terminated involuntarily last year. Let’s say that number is 25.
• Now find out the average number of employees during the same period. Let’s take that number as 250.
• Divide the number of employees terminated involuntarily by the total number at that period. The number will be 25/ 250 = 1/10.
• Now, find the percentage by multiplying it by 100. So, 100 x 1/10 = 10%

Involuntary turnover rate = number of employees terminated involuntarily in a year   X 100

                                             number of employees employed during this period

                                          =  10%

Turnover rates across different industries

Understand how your organization is doing regarding involuntary turnover rates by comparing data with turnover rates across industries. Here are some benchmarks for your reference.

Average yearly turnover rate for 2022: 10.6%

Image courtesy: Linkedin

Image courtesy: Linkedin

It is evident from these numbers that Tech, Media, and Professional Services see the highest turnover rate, while the Government sector has the lowest turnover rate. Workplace burnout, stagnant compensation, and lack of flexibility are the main reasons behind high turnover rates. 

Across all industries, aiming for a people-first culture is the growing trend in HR right now.

Strategies to reduce involuntary turnover

1. Effective onboarding

A comprehensive and robust onboarding process with inFeedo can help new hires understand the company culture and track queries to improve their experience. Clarity in communication will help them understand their role and reduce performance issues in the future. It will also ensure proper behavior at work and respect the company code of conduct, breaking which can lead to job loss.

2. Provide training and development

As mentioned before, learning and development are integral to company growth and success. Empowering employees with the right programs aligning with their job roles and career aspirations will help them perform better at work and boost self-confidence..

3. Emphasize regular feedback

Creating a culture of open communication where the employees can be honest without being scared of the top tier can induce an environment of trust and reliability. Regular check-ins through pulse surveys that are confidential and anonymous gauge employee sentiment. inFeedo’s Sentiment Analysis feature is excellent in detecting the slightest emotional changes in employee feedback or answers. 

For example, an employee has been moved under a different manager. How is the employee feeling about this change? The surveys by Amber can help detect any concerns promptly.

4. Use data from exit interviews

Exit interviews can provide a wealth of data to help management detect the root cause of employees’ frustration or performance issues. inFeedo helps simplify exit surveys and derives all significant data to analyze it for deeper insights.

5. Optimize the recruitment process

Finding suitable candidates to fit a job role can help reduce involuntary turnover. Optimizing the recruitment process with new tools and technology is essential for any organization.

6. Create a thriving work culture

A positive work culture will attract top talent and boost the morale of the existing workforce. To build a thriving work culture, organizations must provide industry-standard compensation packages, ensure the managers are adequately trained to handle conflict and guide employees who need that extra push, introduce awards and recognitions company-wide to show appreciation, and finally prioritize the mental health of all employees. 

Create a winning culture at work with inFeedo

inFeedos’ AI-powered platform can drive your HR towards creating a people-first, positive culture at work. Amber is not just a chatbot but an empathetic HR chatbot that can continue a conversation easily. It encourages employees to be honest with their feedback, and its predictive analysis helps identify at-risk employees. 

Amber helped India Infoline, struggling to connect with its 19,000+ employees at 1000+ locations. Neither could they analyze employee feedback and build a business strategy based on it. With inFeedo’s Amber, connecting in real-time with all employees was possible. Employees without email IDs could use FB Workplace to connect with Amber. Moreover, their HRBPs received daily insights from analyzed data. Special attention was given to monitoring HiPo ( High Potential) employees so that timely action could be taken to avoid attrition.

225+ CHROs have benefitted from using inFeedo’s platform backed by science. Harness the expertise of the people science gurus to reduce involuntary turnover by using the Attrition Prediction Platform. Talk to us today!