Is there such as thing as an ideal employee turnover rate and if so, how what is it within the industry your company operates within?
In the latest in our series on retaining employees, we focus on turnover levels and what is deemed ‘normal’ and what is not.
Upfront it is fair to say there is no ‘one size fits all’ or ‘normal’ employee turnover figure as different industries, as well as external socio-economic factors affecting them, will play a part in sectors having varied levels of turnover rates. See below for a range of these rates, both voluntary and total for 2015*.
* CompData's 2015 edition of their annual BenchmarkPro Survey, which features data submitted by more than 28,000 organizations.
Likewise, employees resign for a myriad of different reasons. Sometimes it is the attraction of a new job, the simple need to earn more, the opportunity to travel or take a different career path, increased focus on family or other lifestyle commitments, and even the prospect of a period outside the workforce which 'pulls' them. On other occasions they are 'pushed' (due to dissatisfaction in their present jobs) to seek alternative employment. An employee leaving your organisation can of course also be as a result of both pull and push factors.
Most companies believe that a certain level of staff attrition is necessary to prevent lack of motivation setting in - and also to allow a company to recruit individuals who can bring fresh ideas into the mix. Likewise, if a poorly performing employee chooses to leave on their own accord, it can save a company considerable time, effort and administrative costs and can also dispense with the potential problem of dismissing someone in certain situations.
Is there an ideal turnover rate?
As a reference point – here are a few facts and figures:
• The UK average employee turnover rate is approximately 15% a year, although this varies drastically between industries.
• The highest levels of turnover are found in private sector organisations in retailing, catering, call centres, construction and media.
• Turnover levels also vary from region to region with the highest rates found where unemployment is lowest.
• Industries with traditionally low turnover rates include legal, accountancy, education and the public sector.
Here at Park Street we would advise collecting the voluntary turnover figures for your organisation to get a sense of how turnover fluctuates throughout the year. This will then give you the basis for internal benchmarking. By tracking both monthly and quarterly turnover you will really get a sense of the trends within your business, as well as individual teams if your staff numbers are large enough.
Once you have the internal benchmarks, you can decide what your own company's acceptable range of voluntary turnover is in comparison to industry wide figures. If the results show your retention is above average then you can up the ante with your focus on staff retention activity.
This is just one element to consider if you wish to retain staff. Download our latest eBook on 9 key areas to focus on to significantly improve your employee retention levels.