Employee turnover is rising steadily across the nation. In health care specifically, turnover has increased from an average of 11.2 percent in 2011 to 16.4 percent in 2015, and the average hospital spends an additional $379,500 for every percentage point increase in turnover (NSI Nursing Solutions, Inc. 2015). This means the average hospital has nearly spent an extra two million dollars over the past four years. Bottom line – turnover is expensive and is getting worse!

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What is driving this trend? According to the Bureau of Labor Statistics, there is a direct relationship between the employment rate, the number of people being hired, and the rate of employee separations (i.e., turnover). The chart below provides a longitudinal look at the national trends since January of 2005. When the employment rate was at its lowest point, after the recession, the turnover rate also reached its lowest point and stayed relatively consistent until around mid-2011. Now, in 2015, turnover rates are steadily increasing toward the pre-recession rates as more jobs are available. It is likely the best talent are even more aggressively seeking better opportunities with better pay and status, especially if their current employers are not meeting their needs. In fact, 85 percent of fully employed professionals would consider leaving their current job for a better opportunity (LinkedIn, 2014).

Leaders are acting fast to create strategies to solve the turnover problem but, nevertheless, turnover keeps rising. Should organizations brace themselves and wait for things to turn around or is there a way to buffer themselves against the national trend? The good news is, there are alternatives to waiting for another recession to lower turnover. In the following sections, I will highlight strategies for understanding and impacting the turnover in your organization.

Chart 1: National Trends in Employment, Hires and Separations – 2005-2015

What Predicts Turnover?

The first question that leaders likely ask when they see high turnover rates in their organization is, “What is causing the turnover we are experiencing?” But perhaps the question they should be asking is, “What kind of turnover are we experiencing?” The difference is subtle but gets at the root cause of turnover and acknowledges the unique nature of each organization. For instance, do we have an older work force that is beginning to retire? Do we have a manager whom no one can seem to get along with who seems to be driving people away? Are a large percentage of new employees failing their 90-day probationary period due to poor performance.

So how do organizations begin to understand their turnover? A deep-dive diagnostic approach to turnover data may help organizations to better strategize how to impact and lower turnover without trying to develop global strategies that may not work across all pockets of the organization. The key is to ask the following questions:

  • Why are they leaving?
  • Who is leaving?
  • When are they leaving?

First, an understanding of the why of turnover is critical. We know that there are many reasons why a person may leave an organization; once you understand the different reasons, you can assess the varying impacts of each reason. Some turnover is simply unavoidable; people move, people retire, people go back to school, and there are few remedies for these reasons. It is the avoidable turnover that organizations should be most concerned with – the people who made a deliberate decision to find a new job – which normally happens long before they leave!

Next, an understanding of who is leaving can help to pinpoint effective strategies. Considering a number of characteristics about the people who leave can reveal where the major issues exist. Is turnover higher for part-time employees than full-time associates? Is turnover higher for third-shift employees? Are the rates higher for people who work in a particular department or unit? If data reveals that certain characteristics or groups of people are more likely to leave, the organization may more effectively reduce its overall turnover rates by focusing retention efforts on those groups, not the entire organization.

Finally, understanding when employees are leaving can help leaders to time their strategies. An analysis of the average time duration between hire and termination may reveal that a large portion of employees are leaving after a certain period of time. For example, if the analysis reveals that there is a large spike in turnover at the 90-day mark, leaders can implement a series of investment and recognition events that precede the 90-day mark in order to “emotionally re-hire” their employees and hopefully get them to stay with the company longer.

Strategies to Combat Turnover

  • Hire top talent: Hiring top talent is key to keeping involuntary turnover low. We know that more talented employees have higher on-the-job performance and are less likely to be terminated for poor performance. Top talent, however, isn’t necessarily the most likely to stay long term. In fact, they have many options and are hungry for investment from their manager and the organization, so if they are not getting what they need, they will likely look elsewhere.
  • Invest in your best: Managing and retaining top talent takes effort. Managers need to recognize these individuals for what they do well, coach them to utilize their strengths and continuously invest in them. Nothing is more frustrating to top performers than a manager who doesn’t seem to appreciate them and instead spends all their time trying to fix the lower performers.
  • Be the employer of choice: This is easier said than done and is certainly not something that happens overnight. However, a continuous, intentional focus on selecting and developing talented people should help to build your brand as a place that people want to come to work. Through continued focus on the first two strategies, the word will soon spread that your organization truly cares about its most important resource – its people.

Holly Olson is a Senior Research Analyst at Talent Plus ® She refines The Science of Talent ® through ROI studies, benchmarking, and building new interviews and assessments. Olson has studied individuals through quantitative and qualitative processes to help client partners select highly talented individuals into various roles.

Holly Olson
Senior Research Analyst
This email address is being protected from spambots. You need JavaScript enabled to view it.

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