MPEX's Blog



    13 September 2018

    What Is the Right Level of Turnover? That Depends on a Lot

    While some turnover is healthy and ensures an influx of new ideas and perspectives into your company, high levels of turnover are generally detrimental. Nobody wants their organization to develop a reputation for having a revolving door.


    But what constitutes “healthy turnover” isn’t the same in all industries. Recent research from LinkedIn shows that technology jobs see high turnover driven by demand and compensation, while retail turnover is increasing as brick-and-mortar stores transition their sales models to favor e-Commerce. Meanwhile, media and entertainment professionals drift in and out of jobs based on project needs.

    The Breaking Point

    With so many factors in play, many executives struggle with turnover math. Is it too high? Is it normal?

    “There is not a one-size fits all answer,” says Sarah O’Brien, global insights director at LinkedIn Talent Solutions. “The breaking point depends on the company’s talent strategy and the specific needs of the employees and roles that the company is focusing on. Having access to data and insights into how and why talent is moving within your specific market, industry, and roles is key.”

    In other words: Turnover isn’t a simple matter of numbers. Organizations can only assess their turnover levels if they understand why employees decide to stay or leave.

    “Once you understand the why, you can develop strategies to retain and recruit talent where needed for your unique circumstances,” O’Brien says. “Our research shows the top reason people leave a company is lack of opportunities for advancement. The other biggest reasons people jumped ship included being unhappy with leadership or the work environment and a desire for more challenging work.”

    While employers should keep these broad trends in mind, O’Brien urges all organizations to analyze their own data to get the clearest picture of what is happening among their own employees.

    With so many moving parts, evaluating turnover requires information on a variety of factors, such as your organization, your industry, skills gaps that may exist, and your workforce. Most organizations already have much of this data on hand — they just don’t properly utilize it.

    “Looking at your own data is essential to understanding causes of turnover internally,” O’Brien says. “External data is useful for understanding new competitive developments, which may be changing the face of the talent marketplace. With internal and external data in hand, companies can then develop customized strategies for addressing specific retention issues.”

    For example, Hershey is able to predict employee retention rates with 87 percent accuracy by paying close attention to things like number of managers and employee commute time. Hershey found that workers with longer commute times and workers who had multiple managers in short periods of time were more likely to leave.

    “Using insights from its workforce planning model, [Hershey was] able to retain valuable, at-risk employees and recruit new talent in advance of busy seasons, such as Halloween and Easter,” O’Brien says.

    Won’t You Stay Just a Little Bit Longer?

    Workers want to be engaged, and they want to know they have a future and room to grow at your company. Providing these two things will go miles in the right direction for your retention efforts.

    Our recent analysis found that 94 percent of employees said they’d stay longer if their company showed that they were willing to invest in their career,” O’Brien says. “This doesn’t always take the shape of moving up the ladder. Depending on the insights you find from analyzing your organization’s data, career coaching, lateral job moves, and continuous learning could very well be the action you take.”

    Nielsen, for example, found that lateral career moves within the company were almost as effective as promotions, in terms of increasing retention rates.

    The importance of engagement cannot be overstated. If your employees are bolting for the door at an alarming rate, the easiest thing you can do is just talk to them. A simple conversation costs much less than onboarding a brand new employee.

    “At LinkedIn, for instance, attrition rates among our top engineers plummeted to 5.5 percent when we encouraged managers to have more career-focused conversations with employees,” says O’Brien.

    Addressing turnover doesn’t have to be an expensive affair. A few meaningful conversations may be enough to do the trick.

    Auteur : Jason McDowell