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What is Employee turnover?

Employee turnover refers to the frequency which employees depart from an organization and are replaced by new hires. High employee turnover rates can be expensive for companies due to the costs involved in recruiting, training, and orienting new employees. Moreover, turnover can result in a loss of institutional knowledge and a decline in overall productivity.

Employee turnover can be classified into two categories: voluntary and involuntary. Voluntary turnover occurs when employees choose to leave their positions, while involuntary turnover occurs when employees are terminated or laid off by the organization.

Multiple factors can contribute to high employee turnover rates, including ineffective management, limited opportunities for professional advancement, inadequate compensation, and an imbalance between work and personal life. Organizations can reduce employee turnover by offering a competitive salary and benefits packages, providing avenues for career progression and skill development, enhancing management practices, and fostering a positive work environment that values employee input and feedback.

Measuring employee turnover rates enables organizations to identify areas where improvements can be made to enhance employee retention and reduce costs associated with high turnover. Additionally, conducting exit interviews with departing employees allows organizations to gain insights into the reasons behind their decisions and discover areas that can be enhanced.