Surprising Ways Turnover Can Hurt Your Business

Employees leave. It’s a fact of life for any organization. Family pressures, career changes, and retirements can send team members headed toward the door.

However, keeping those departures to a minimum is crucial to long-term team building. A revolving door of employees can sap your productivity and stymie growth. This happens in several ways at once. Besides the obvious issues, there are many surprising ways that turnover can hurt your business.

According to the Society of Human Resource Management, the median turnover rate is 14%. The best companies see a number in the single-digit range, while the worst performers experience a figure approaching 25%.

Where you fit on that spectrum depends on a lot of factors. Outside conditions, like dynamics within your particular industry or changes in the overall economy, can influence turnover rates. But whatever the external circumstances, you should take steps to minimize the impact on your business.

Every departure leaves a little hole in your organization. You have to scramble to fill it, stealing time and resources from other endeavors. This can lead to unexpected consequences for your operations.

Here are some of the surprising ways turnover can hurt your business:

Diminished Morale

The impact of turnover doesn’t stop with the people who leave. You also have to think about the staff members left behind. A high turnover rate diminishes morale for the team as a whole. It can also become a self-fulfilling prophesy. Because turnover is high, more people start looking for an exit.

Reduced Institutional Memory

Having long-tenured employees contributes to institutional memory. Your team builds up a shared history and a deep well of experience.

This can’t happen if people leave quickly. You don’t get a chance to develop seen-it-all veterans. All that wisdom walks out the door with your departing employees.

Shaky Team Chemistry

When team members work together over a long period of time, they build up a rapport. They are able to anticipate each other’s moves and become familiar with one another’s quirks. If you’re constantly shuffling new employees into the deck, this familiarity can’t develop. Your team chemistry will never reach its highest potential.

Increased HR Workloads

High turnover means increased pressure to hire. You need to replace all those departing workers. At the same time, all those fresh recruits need onboarding and training.

All this puts a strain on your HR department. They are constantly forced to churn the recruitment process. That means added stress for them, and a lack of resources for other projects.

Studies show that 80% of turnover comes from poor hiring decisions. But, when turnover is high, your HR staff can’t devote the time and money necessary to improve the process. They are continually locked in the recruitment grind.

Lack of Momentum on Long-Term Projects

Turnover can chip away at your broader potential as an organization. As people leave and need to be replaced, you experience a constant start-stop pattern on larger products. This makes it difficult to maintain momentum.

At the same time, you spend so many resources on simply maintaining staffing levels that you can’t invest in longer-term projects. Forget new product launches and efforts to upgrade productivity. You spend all your time and money just finding new recruits to maintain your current operations.

Ready to stop the vicious cycle of turnover? Well, as we mentioned, you solve a lot of problems by simply hiring the right people. A strong recruiting firm, like SmartTalent, can find the perfect staff members for your organization.

Contact SmartTalent today to upgrade your team-building abilities.


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