High staff turnover is an acknowledged and growing problem in many industries, particularly service industries that employ high numbers of low-paid non-professional employees. If your organization is experiencing a high turnover of staff, then you should pay attention and try to reduce it, because the cost of high turnover is probably higher than you realize.

The Consequences of High Turnover

High staff turnover can have a number of consequences for an organization:

Very high re-recruitment costs

Poor skills transfer between employees

Low employee morale

Reduced employee effectiveness

Lack of team identity

A reputation as a bad employer – difficulty recruiting good employees

Recruitment Costs

One of the most immediate impacts of high staff turnover is financial. It is estimated that recruiting an hourly-paid worker can cost anything from $2,000-$10,000, with managers costing even more to recruit. These costs shouldn't be underestimated, and illustrate that sometimes spending money on retaining existing employees can often cost a lot less than having to re-recruit them.

Reduced Effectiveness

High turnover of staff can have a negative effect on the effectiveness of your workforce. If your existing employees are always worried about job security, having to train new staff, or thinking about leaving themselves, then they will not be doing such a good job for you.

Although it's a cliché, it's true – a happy employee is a productive employee! The opposite is definitely also true, and the loss of skills and lowered morale caused by a high turnover of staff can lead to a lowering of quality standards and efficiency in an organization.

As an employer, you should be aware of this, and try to take steps to address the causes of high turnover if you possibly can.

A Bad Employer

Rightly or wrongly, if your organization has a high turnover of staff, some of those ex-employees will bad-mouth your company, and over time you may gain a reputation as a "bad" employer. While it may not be true, that kind of reputation can lead to difficulty in recruiting good-quality employees, thus making your staff turnover issues even worse.

Reducing Staff Turnover

So what can be done to reduce high staff turnover and stabilize your workforce? You'll be relieved to know that there are several fairly simple processes that can be put in place that should help keep your employees happy.

First of all, it is important to recognize that you, or your management team, will probably have to accept a lot of the responsibility for the high staff turnover. You control the work environment, the work load, and the workers, and inevitably some problems are going have their roots in management behavior.

Listed below are three vital processes you should have in place to help minimize staff turnover in your organization:

1. Hiring practices – are you hiring the right people for the job? Spend some time developing a thorough recruitment process that identifies people's skills, motivation and previous histories – always take up references, and check they are genuine.
2. Communicate – talk to your employees; find out what they do, what they like and what causes them problems. Create an environment where people are not afraid to speak up if they have an issue.
3. Appraisal – this doesn't have to be overly formal or long-winded, but it is worth making sure that your employees are doing the job they were recruited for, and that your teams are working properly together. If they aren't, then find out why.

I hope that this article will give you an idea of both the cost of high staff turnover and some of the fundamental remedial measures that can help reduce it.

High staff turnover may be here to stay, but it doesn't have to affect your organization.