What is employee turnover? Conventional thought would tell you that the employee turnover ratio is hires compared to terminations over a period of time. Certainly there are complex methods that tell you how to calculate turnover. Companies spend a lot of money to find and understand staff retention rates. A high attrition rate is expensive. Staff retention has to be a priority for every organization.
I would suggest that the traditional methods that teach you how to calculate turnover are wrong! Yes, they can tell you a mathematical ratio and, yes, that number is true. But corporate leaders could be asking the wrong questions about their true retention rate. Instead of asking “what are our employee turnover rates?” a better question is “What is employee retention?” An employee doesn’t have to leave your company to stop working. Recent surveys state that more than 50% of employees today have mentally or emotionally left their jobs. To really understand your attrition rate you must factor this into how you calculate turnover. A disengaged employee could cost a company more than a vacant seat. To truly understand staff retention, employee engagement must be part of the equation. Otherwise companies are fooling themselves into believing their employee turnover rates are simply a mathematical ratio.
The most overlooked fact about employee turnover is this; employee disengagement has to be part of employee turnover rates. Find out who is in the wrong job (see my other posts about job analysis). Add that number to your actual terminations. Then you’ll truly understand your employee turnover ratio.
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Are you still Fishing for employee motivation? This was a popular employee motivation strategy several years ago. There are lots of books on Amazon.com that will teach you about how to motivate employees. Every business wants good employee relations and a happy, productive workforce. Strong and positive employee morale is necessary for optimum productivity. I can’t think of any client who has told me they didn’t want high employee satisfactory. All companies work hard to motivate employees.
Corporate leaders and business owners have a lot of reasons to know how to motivate employees. High levels of employee engagement make their jobs easier. They want less stress in their employee relations. They have profits to increase. They want to sharpen their competitive edge. They want to keep costs low and productivity high. They want to generate more revenue. They want, they want, they want… Are you reading this? They want to motivate employees for all their corporate reasons and this is why most companies fail in how to motivate employees.
Employee motivation, employee satisfaction, employee engagement, and employee relations will never improve if it is all about what the company wants. No one is going to work to make the company better or to reach company goals. Organizations will fail if they believe a slick, new “program” is the way to motivate employees. Employees will only be motivated when they know what’s in it for them. They will increase productivity only when their needs are met. Incentives to motivate employees must be tied to what they value and desire. Strategic employers know this. They work hard to understand what makes their employees tick. Only when employee values are linked to motivating incentives will companies succeed.