High turnover may not seem especially damaging, but make no mistake; it is one of the most harmful qualities that a business can have. Inability to keep employees around for extended periods of time not only lessens the productivity of a workplace but also speaks to deeper problems within the business. In order to help you understand the damage caused by high turnover, here is a list of the effects it can have on a business.
Hiring Costs
Having a high turnover rate is expensive, especially for larger businesses. There are multiple investments required to replace employees who quit, such as advertising and fees from outside recruiters. These costs tend to be ever more draining when coupled with the reduced productivity caused by many newer, less experienced employees.
Training Costs
Employee training is often a protracted, costly process. Training a new employee cuts back on productivity and often increases overhead; though this is necessary, the costs do add up when the turnover rate is especially high. Additionally, new employees often need even more experience outside the company training program before they can effectively do their job; there really is no substitute for experience.
Reduced Security
Employee turnover hurts every step of your security. Simply put, if you have to constantly replace quitting employees, your business is much less stable. The culture of your workplace becomes inconstant and ever changing, with few workers around to maintain consistency. The quality of work is also reduced as your employees will be less experienced, which can definitely affect your bottom line.
Reduced Team Morale
As a rule, high turnover rates tend to reduce worker morale. When people cannot make and maintain consistent work relationships, it tends to make the job feel boring and impersonal. On top of that, when there are fewer experienced employees around to help guide the team, new workers can often have a more difficult time adjusting to the workplace. As a result, when people do not feel that their efforts are productive and successful, they are more likely to quit and work somewhere else, creating a loop and increasing the turnover rate even more.
Therefore, to mitigate and eliminate a high turnover rate, the root issues need to be addressed. By paying attention to these negative effects and caring about employee concerns and complaints, unhealthy methods and dynamics within the business structure can be addressed and fixed. If this is not done, the security and success of your business can be compromised.
