Why High Turnovers Rate Are So Detrimental to Your Business
Rob Turner

The rate at which employees leave your business can affect the profitability, morale, and productivity of the business. As a business owner, you need to make sure that you have retained the best talent for the longest time possible. This prevents labor turnover.

Businesses that have a high employee turnover need to implement the best employee retention programs to curb the turnover. Such businesses can also check their approaches to human resources to find out why their employees leave at a high rate.

What is Employee Turnover?

Also referred to as employee turnover rate, employee turnover is used to calculate the number of employees leaving a business at a given time. This calculation is done annually in most businesses and applies to the entire business.

However, you can also calculate employee turnover within a group of employees or even departments. This is important when you want to find out the departments that are losing more employees every year.

Why is a High Turnover Rate Detrimental to Your Business?

A high turnover rate in a business can lead to negative effects that might affect the performance of the business. Here are some of the reasons why a high turnover rate is detrimental to your business;

Deteriorating Service and Product Quality

If you lose several employees at a given time, chances are that you are going to experience sub-par quality and low productivity. This can be a result of the disruption of operations brought about by low employee numbers.

It can also be caused by hiring new employees without the requisite experience due to the loss of experienced employees. For instance, a new developer might spend time before they understand how your development environment works.

Low Morale at the Workplace

Losing a high number of employees can lead to low morale among employees in the workplace. One of the main reasons contributing to this is overworking of employees due to increased workloads resulting from the loss of other employees.

Unfortunately, hiring new employees might not provide an immediate solution to this. This is because apart from handling more than they could have signed for, they also struggle to learn new procedures and duties assigned to them.

Loss of Revenue

A high turnover rate directly affects the profitability and revenue generation of a company. For instance, research indicates that an employee earning $8 each hour can lead to a loss of between $3,500 and $25,000.

This includes the cost of hiring a replacement, productivity loss, lost sales, and training the replacement. This loss can even be higher in some industries depending on what the lost employee was doing.

Add things like severance packages to the costs above… The expenses keep on growing. This is an expense that does not even have ROI (Return on Investment). Businesses should do everything they can to reduce their turnover rates. But how can they keep their employees for longer?

How You Can Keep Employees for Longer

There are different strategies you can implement to keep your employees for long. Some of them include;

Rewarding Employees

Your employees try as much as they can to complete their tasks and see your business succeed. Do you take some time or even spend a little to appreciate what they do for you? If you do, how do you reward them?

One of the most effective ways is to look for custom engraved awards that align with the taste and preferences of each of your employees. This shows the employees that apart from appreciating them, you are also willing to go the extra mile and give them something good.


You need to make sure that you have shown your employees that you trust them. One way of doing that is by giving them responsibilities and letting them handle tasks the way they would like to.

This shows that you are willing to let them grow. In addition, develop programs that help them gain new skills. You can do this by giving them opportunities to learn and promotions when there is a vacancy.

Shared Revenue

Yes, you can decide to tie a certain part of the performance of your business to the wages of your employees. This will ensure that their interests are aligned with the profit goals and revenue-generating strategies of your business. However, this is something you need to consider when starting a business turnover need or changing your modes of operation.

You can also keep your employees for longer by giving them the respect that they deserve, offering them flexible working hours, ensuring there is a work-life balance, and offering mentorship programs, among others.