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Understanding Healthy Staff Turnover & Improving Your Retention Rate

By Stephen Jolley
Illustration of Carl the yeti packing up his desk and walking towards an exit sign.

It’s finally happened — your employee is breaking up with you. You gave them all the pep talks. You spearheaded the yearly evals. You even threw a couple of potlucks and rewards in for good measure. And still, the day has come – your beloved employees have decided to move on. It’s not you; it’s them. Right?

Well, maybe.

image with text - Voluntary turnover in 2021 was a whopping 25% across all industries, and 57.3% when including non-voluntary rates.

Staff turnover is just a fact of life, like death, taxes, and a new season of The Simpsons. You should always expect to have some margin of employee churn, but too much can be overwhelming, or worse, productivity-destroying. Voluntary turnover in 2021 was a whopping 25% across all industries, and 57.3% when including non-voluntary rates. That’s more than half the workforce!

Like a romantic breakup, you might be pacing the floor wondering what went wrong. Was it something you said? Could you have stopped this from happening? Or better yet, is this normal?

Never fear, dear reader! Let’s examine what a healthy turnover rate actually looks like, and develop an action plan for lowering churn. Better yet, we’ll provide some solutions that have been proven to work in multiple industries – guaranteed!

How is staff turnover calculated?

This process is way simpler than it sounds, provided you have some good records. The formula is a straightforward one:

Leaving employees divided by current employees multiplied by 100.

So let’s say a company has 100 current employees, with 70 leaving in the next few weeks. The formula would be 70 divided by 100 (0.70) multiplied by 100 to get a 70% turnover rate. Yikes. Not a great look for those guys, huh?

As you can see, calculating staff turnover is pretty easy — using hypotheticals, anyway. But how do you calculate staff turnover in your company? Let’s take a closer look.

What is a healthy staff turnover rate?

Turnover can happen for almost any reason. Employees might be leaving to start a family, retiring, getting a promotion elsewhere, or taking a midlife sabbatical. And if it’s not a voluntary turnover, suspensions, firing, or laying off employees can also contribute to your calculated percentage.

So, what is a healthy staff turnover rate? Good question.

image with text - The gold standard for healthy turnover rate is 10%, but most companies fall between 12% and 20%.

The gold standard for a healthy turnover rate is 10%. However, most companies will fall into the 12% to 20% range during their yearly calculations. Keep in mind that this changes according to your industry or location (entry-level grocery stores aren’t likely to retain as many employees as universities, for example).

Turnover is like a birthday — it’s happening, whether you want it to or not. And if your company is bleeding out without replacing employees fast enough, you might be facing some serious problems. Let’s take a closer look at some of the details:

While you can’t eliminate all turnover, you can take steps to reduce voluntary pink slips pretty much immediately. And we’ll give you a hint — it starts with intentionality.

How to decrease staff turnover

Here’s how to lower staff turnover the easy way — with engagement!

  1. The most common reasons employees leave companies are due to a lack of career development and promotion opportunities. Listen to the needs of your staff, and react accordingly.
  2. Everyone loves a pat on the back! Create a learning and development plan for your teams, and recognize their efforts with rewards and opportunities.
  3. A healthy team is a connected team. Bring your employees together with plenty of opportunities to connect (and not necessarily about work).
  4. Managers have a huge impact on your workforce. Bad ones can push turnover rates through the roof! Equip your leaders with the management resources they need to coach employees effectively.
image with text -  Promote company culture. Reach for engagement. And above all, lead with excellence.

Promote company culture. Reach for engagement. And above all, lead with excellence. You’ll be lowering staff turnover rates in no time!

How to improve staff turnover with Motivosity

As we’ve just learned, managing employee turnover starts by aligning your values and culture into all levels of the leadership pyramid. But this isn’t feasible for startups and large brands with unique needs. For companies all over the world, the answer to implementing engagement on-budget and at-scale starts with Motivosity. Motivosity is a champion of empowerment for all employees, offering a personalized system of platforms to every and any industry. Help people be happier at work by sharing thanks and recognition, and reduce staff turnover using a proven system with a 96% adoption rate.

Watch Motivosity in action yourself with a free demo at your convenience.