What are the main causes of employee turnover?

Employee turnover costs are quite substantial for big and small enterprises. After all, a high employee turnover rate wastes time and money, and leads to a drop in employee morale. It can also affect your company’s reputation.

It’s unavoidable that some employees will leave. Retirement and relocation, for instance, cannot be prevented. However, if you want to have a certain degree of control over employee retention, you must keep track of staff turnover and understand why people leave. In this article, we share the main causes of employee turnover, as well as tips to reduce your employee turnover rate. 

What is employee turnover?

The total number of employees who leave an organization during a given time period is referred to as employee turnover. Employees who leave voluntarily as well as those who are dismissed (involuntary turnover) are included in this figure.

How does turnover affect a company?

High turnover rates generally indicate issues with recruitment, workplace culture, compensation and benefits, management, or training. Turnover affects a company negatively since the workload remains the same, but there are fewer people to rely on.

Why is employee turnover bad?

High turnover rates harm a company and its personnel in a variety of ways. With the ongoing need to hire and train new personnel, it’s easy to lose sight of the organization’s actual mission and vision.


Employee turnover has a direct impact on the revenue and profitability of a company. Depending on the sector, employee position, and compensation, the loss of revenue caused by employee turnover varies. Nevertheless, rather than concentrating on the place of your firm in the market, lots of valuable hours are spent scrutinizing the labor market. Consider the time and labor costs associated with classified vacant position ads, assessing applicants, interviewing, and training management personnel.


Employee morale can be affected by a high turnover rate. As disgruntled employees leave their functions, the workload must be delegated and distributed amongst fewer employees. In turn, these employees could feel added pressures due to tight deadlines and the pile of work that weighs on them in and out of work. This quickly becomes a vicious circle if steps aren’t taken to mitigate this situation.

When the amount of work surpasses the capability of the labor force of a company, regardless of the positive company culture that might have reigned before, the morale of employees will erode just as their efficiency.

Deterioration of service

A disruption in daily operations due to high turnover rates, coupled with inexperienced staff with insufficient training results in lower productivity. This is especially true in businesses where familiarity and repetition are more important than innovation.

 What is an employment agency?

What is a good employee turnover rate?

According to the SHRM Human Capital Benchmarking Report, the average employee turnover rate in 2017 was 18%, and less than half of companies have a succession plan in place. Employee turnover should be kept to a minimum of 10%, however, most companies’ turnover rates are between 12% and 20% (source).

Then again, there are some exceptions. Depending on the nature of the industry, turnover rates can be 100%. Just think of that ice cream shop that closes during winter due to seasonal demand. Retail, staffing agencies, hospitality, and fast food are all sectors that intrinsically have high turnover rates.

What causes high employee turnover?

People seek more money, better benefits, work-life balance, opportunities for professional development, and sometimes a better boss. As a result, a high employee turnover rate is often due to unrealistic expectations, which leads to a toxic culture in the workplace. 

A critical component of personnel management is gaining a better understanding of the causes behind voluntary turnover. Human resources can encourage employees to be candid in an exit interview process by ensuring that their answers will be kept confidential and will have no bearing on how the company handles requests for references.

5 Main Causes of Employee Turnover

If your staff turnover rate is higher than usual, you should assess your company culture. These 5 causes of employee turnover are enough to drive good workers to your competition:

  1. Lack of professional development
  2. Bad manager
  3. No work-life balance
  4. Poor interview process
  5. Little opportunity for initiative

1. Lack of professional development

High staff turnover may suggest that your organization does not provide adequate growth opportunities. Employees will hunt for a better job if they feel stuck in a dead-end employment. Employees also favor organizations that offer career training programs that enable them to expand their skill sets and improve their resumes. Training opportunities might also help them feel more confident in their existing employment responsibilities.

2. Bad manager

Poor management is another factor that contributes to increased staff turnover. Workers may look for work elsewhere if their supervisors are tough, or strictly micromanage their employees. Furthermore, if a leader’s management style is negative rather than encouraging, it will create a toxic culture, causing low employee satisfaction. Lack of recognition is a silent killer.

3. No work-life balance

Forcing employees to choose between their professional and personal lives is never an option. This ultimatum drives up the average employee turnover rate since the labor market will present alternatives to dissatisfied employees. The dream of all professionals is to work less, and earn more. When there is no work-life balance, you make it easier for your competitors to poach your talents.

4. Poor interview process

Finding the ideal employee is challenging, but forcing a match with someone who is not compatible with the company’s culture or principles is never a good idea. Even if you’re desperate to fill that position, hiring someone who isn’t a good fit for the job is counterproductive. A poor interview process also means a recruitment process that drags on over months, and not many candidates have time for that.

5. Little opportunity for initiative

Do you tend to micromanage your employees? If that’s the case, you’re telling them, “I don’t think you can accomplish this without my supervision”. Micromanaging suffocates initiative, which is the last thing you want. Employees who are over-managed are more prone to become dissatisfied with lack of recognition.

Top 10 reasons employees leave their jobs

Tips to reduce employee turnover

Here are key tips to reduce your average employee turnover rate:

  • Invest in your employees
  • Reward your employees
  • Provide honest feedback
  • Ensure work-life balance
  • Hire an employment agency

Invest in your employees

Employees want to feel like they’re valuable members of the team. Participate in their professional development to show that you believe they are assets to your enterprise. Promoting development will help strengthen employee retention in the long run. You’ll improve your workers’ capabilities while also attracting new talent.

Reward your employees

Make a conscious effort to recognize and acknowledge your employees’ achievements and efforts. Offering incentives and recognizing accomplishments may seem effortless, but it will enhance employee loyalty. While money may not be the major cause of high turnover, ensure that you offer your staff a fair remuneration that grows in tandem with their professional development. As a result, your employees will be less likely to look for a better job elsewhere.

Provide honest feedback

Knowing how to deliver pertinent, well-considered feedback is a critical component of employee retention. Employees can use feedback to reflect on their overall performance, identify areas for development, and improve their skills. Skipping the opportunity to provide feedback to your employees stifles your company’s growth and may cause your employees to look for jobs elsewhere.

Work-life balance

It is critical to maintain a sense of equilibrium. If your employees are overworked, they will be unsatisfied. Encourage all of your employees to take their whole lunch break, and make sure their tasks are realistically achievable so they don’t need to stay late or start early all of the time.

Hire an employment agency

Spartanium is a recruitment firm that works in a variety of industries and sectors. We are the referential bridge between talented professionals and organizations in Montreal. We specialize in the disciplines of insurance, accounting, law, and transportation logistics for all your recruitment needs. 

Find the right talents for your business 

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