Running a business can be difficult, but it can be even more so when you’re struggling with a high turnover rate. Not only that, but if you’re unsure why your turnover rate is so high, it can make it hard to know what to do to improve the situation and keep your business going like it should. While having a high employee turnover rate can be a troublesome problem, the good news is that if you take a little time to analyze your business, it is often easy to figure out what’s going on, and find a way to fix it.
What is a high turnover rate?
Basically, a high turnover rate is when you lose many of the employees you hire within a relatively short period of time. While what is considered a high turnover rate can vary from industry to industry, having one can spell trouble for your business. Some businesses or industries are comprised of low-skill or low paying jobs, and they may expect to see a rate of turnover that is generally high. However, for other industries where more education and a broader skill set is required for a job, turnover is expected to be lower, and a high turnover rate in a business like this could mean that they need to look at their business metrics and that there are some issues with the way that it is being run.
You’re not keeping up with competitors
One of the main reasons a business may see a high rate of turnover is that they are not keeping up with other competitors in the field. When another business similar to yours offers a better wage and similar benefits, or a similar wage and better benefits, people will usually choose to go where they can get better compensation for their work. While some companies may think that they are saving themselves money by keeping their wages a little low, the reality is that it could be pushing qualified people out the door, and it could be costing you more in the long run because of all the work and resources that then have to go into hiring new people on a continual basis.
Your management needs improvement
Another area that needs review if you have a high turnover rate is your management. Often, an employee may leave a job not because they don’t like the job itself, but because they have an issue with the management there that makes it difficult for them to work properly. There can be many different ways in which your management could be causing problems, ranging from bosses that show favoritism, to bosses that don’t listen to their worker’s comments and don’t take them seriously. Also, managers that are either overly involved, and that micromanage can be equally as trouble causing as managers that don’t get involved enough. By taking some time to assess your management, you can help find the right balance.
Bad workplace culture
Along with poor management, a poor workplace culture can also be to blame for a high turnover rate. When there are frequent interpersonal issues between employees, it can make it difficult for them to feel comfortable at work, and can therefore make it more difficult for them to do their jobs properly. After a while, they may get tired of having to deal with the added stress of a negative workplace culture and simply give up altogether. By setting a positive example and promoting healthy communication at your business, you can help to avoid this.
No opportunities for growth
Not feeling like there is room to develop can be another big reason for high turnover rates at a company. Employees like to feel like they’re making a difference, and like they can grow and achieve things. If a worker feels that there is a hard limit to the growth they will be able to achieve at your business, they may feel like their time would be better spent elsewhere. For low-skilled labor, this may just be something that comes with the territory. However, if your business is one that generally requires more knowledge and skill, this could be a big problem, and it may be a good idea to do some restructuring within your business, so that you can allow for more opportunities for your employees.
Some final thoughts
There are a lot of reasons why running a business can feel difficult at times, and having a high turnover rate can often make it feel even more difficult. While there may be some industries that typically have a high turnover rate, for many businesses high turnover can spell trouble. The good news is, though, that you don’t just have to keep dealing with it. By analyzing your situation and making the appropriate tweaks, it can be easy to lower your turnover rate and retain a happy workforce.
Lindsey Patterson is a freelance writer and entrepreneur based in the US who specialises in business technology, customer relationship management and lead management. She also writes about the latest social trends, specifically involving social media.