Is voluntary turnover always a bad thing? Let’s face it, high turnover often has bad consequences for an organization. It reflects a disorganized and unsatisfied workforce, and it can lead to chaos and affect morale.
However, can we find any opportunities that can arise from voluntary turnover? Is every type of turnover bad? How can you prevent voluntary turnover in the workplace and how does skills testing fit into this? We’ll begin by looking at the four types of employee turnover and then consider how to reduce it or turn it to your advantage.
Table of contents
What are the four main types of employee turnover?
The four types of employee turnover include voluntary, involuntary, functional, and dysfunctional. Let’s define and describe each of these.
1. What is voluntary turnover?
Voluntary turnover refers to the number of employees who leave your organization by choice over a particular timeframe. This type of turnover happens when employees choose to leave your business voluntarily.
2. What is involuntary turnover?
Involuntary turnover refers to the number of employees who leave your organization after they are fired or otherwise forced to leave. It typically occurs when an employee consistently fails to meet targets or has behaved inappropriately in the workplace. In other words, counterproductive or damaging work behavior is the main cause of involuntary turnover.
3. What is functional turnover?
Functional turnover refers to the number of employees who leave your organization due to their inability to meet targets or the performance expectations of the business. Functional turnover can be voluntary or involuntary, meaning the employee may choose to leave or may be laid off.
4. What is dysfunctional turnover?
Dysfunctional turnover refers to the number of employees who leave your organization despite their leadership potential. Since this turnover can significantly impact your business, creating a succession plan and preparing a solution beforehand is vital.
What causes voluntary turnover?
53% of employees actively seek new opportunities, but what causes them to actually leave? The main motives that drive voluntary turnover include better career opportunities, benefits, work/life balance, and employment flexibility. Other motives that lead to voluntary turnover may be more personal, such as relocation, health challenges, seeking a better salary, or a less toxic work environment.
What other factors affect turnover?
Three other important factors affect turnover. Make sure to watch out for the following so you can plan more effectively to avoid a high employee turnover rate.
- Job role dissatisfaction. A critical factor that contributes to employee turnover is job dissatisfaction. It’s not a surprise that your employees will be more efficient and productive if they’re satisfied in their roles. If they’re not, their performance can suffer and they may seek new opportunities.
- Poor business reputation. If your organization has a poor reputation, you may find an issue with your employees’ work ethic and trust in the business. Working to boost your reputation as a business can make your staff proud to work with you and aim to work productively.
- Poor communication. Problems with communication, such as the inability to share work-related or personal information with colleagues, can make it more difficult for your employees to solve challenging problems. A lack of communication can make your employees feel unappreciated, unacknowledged, and eager to leave.
Is voluntary turnover good?
When you hear “voluntary turnover,” you’ll likely think of the negative consequences of losing team members. You may see voluntary turnover as a bad thing for employee morale and productivity, and you’d be right to notice this correlation.
However, in some situations, voluntary turnover can have positive consequences. If a single poor-performing employee leaves, you can replace them with more productive team members.
Voluntary turnover is usually only bad when you can’t retain your best performers or the cost to replace them is high. It’s also negative if your company notices poor performance due to declining morale in your business.
What are the effects of voluntary turnover?
We’ve already mentioned some of the effects of voluntary turnover, such as low productivity and morale. But other consequences may also impact your business.
You face extra expenses when hiring a replacement to fill a vacancy. It costs about $4,000 to hire a new employee, and you may also need to train them, which can take time. In the time it takes to hire and train new employees, you may lose sales opportunities, which can harm company revenue.
How can you prevent a high turnover rate?
So, what are the best ways to prevent a high turnover rate? Check out the three methods we recommend below.
Use skills tests to upskill employees
Since employees may consider leaving your business if they can’t progress, it’s your responsibility to help them nurture their skills to facilitate career progression. One of the best options to do this is skills testing.
By asking employees to complete a skills assessment, you can review their strengths and identify the skills they lack. With this data, you can more easily create the best training materials and resources for upskilling your team.
If you need to upskill an outside sales employee, consider our B2B Sales test to benchmark their abilities, inform the creation of training materials, and prepare your employee to take on more responsibility in your organization.
Recognize your employees’ achievements
If you want to reduce voluntary turnover, increasing employee engagement is critical. You will see positive outcomes for employee retention when you increase engagement.
For instance, did you know that peer engagement can make employees feel they’re performing better at work, boosting morale? Building better employee relationships is crucial here: Organizations may see a 26% increase in engagement scores due to employee recognition.
There is a clear correlation between recognizing and acknowledging achievements and employee engagement, so ensuring manager-given and peer-to-peer recognition is essential.
Create an effective succession plan
An effective succession plan will help you address dysfunctional turnover challenges. By reviewing the potential impact of a team member’s departure and reviewing successors’ skills, you can create a top succession plan and prepare for the departure of a potential leader.
A succession plan is most effective when you offer the right training to successors. If you use skills tests to benchmark potential successors’ skills, you can target areas for upskilling and prepare them for moving into a vacant leadership role.
Voluntary turnover: Remember these facts to prevent it
Voluntary turnover can present opportunities to hire new skilled team members, but it could also cost a lot in terms of time and money. To keep voluntary turnover and hiring costs to a minimum, ensure you have a succession plan ready and use skills-testing platforms to help you create one.
Go directly to TestGorilla to learn more about succession planning, upskilling, and skills tests to reduce voluntary turnover in your organization.
