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Employee Turnover

Many organizations have found that turnover is a very costly problem. Turnover is the process in which employees leave an organization and have to be replaced. The extent to which employers face high turnover rates and costs often varies by organization and industry. For example, the Society for Human Resource Management (SHRM) calculates that the average for all industries is 15% annual turnover. But companies in service industries such as restaurants have an average annual rate of 35%. Entertainment and recreation has 27% turnover and retail 22%. Health care and social assistance have 20% annual turnover. Research shows that many factors can lead to turnover. For instance, job dissatisfaction, low levels of various kinds of work commitment, work–life conflict, and decreased justice can encourage people to quit their jobs. Forces such as the availability of other employment opportunities and unemployment rates are also tied to employee turnover. Turnover typically goes up as unemployment rates drop and dissatisfied employees can find other jobs. Organizations are better able to keep employees if they address the concerns of those individuals that might lead to controllable turnover.