Welcome to Alanis Business Academy.
I'm Matt Alanis and this is The Different Types of Employee Turnover.
Employee turnover, which refers to people leaving their jobs, is a common occurrence
in the work environment.
Chances are you yourself have left an employer and thus been included in what is known as
turnover rate.
The turnover rate is the percentage of an employer's total workforce that leaves the
organization during a given period of time.
If an employer has 100 employees and 7 leave the organization during the year, then the
employer has a turnover rate of 7 percent for the year.
Now employee turnover is caused by a number a different factors.
These factors can include poor performance, lack of career advancement opportunities,
workplace conflict, and even a better offer from a competing firm.
In general, employee turnover is problematic for organizations since people leaving create
a number of different costs.
Replacing an employee can be a time-consuming process that forces the organization to expend
resources that could otherwise be used in other areas.
In addition to recruiting, selection, and training costs, many new employees need time
to become competent in their positions.
During this time mistakes are more frequent, which can cost the employer hundreds if not
thousands of dollars.
There are two types of employee turnover: voluntary turnover and involuntary turnover.
Voluntary turnover is turnover that is initiated by an employee.
An employee may leave voluntarily because he or she received a better offer somewhere
else or is leaving the workforce altogether maybe to stay home with family or go back
to school.
Whatever the reason, the employee is choosing to leave and many times the organization would
prefer they stay.
Involuntary turnover is turnover that is initiated by the employer when the employee would rather
stay with the organization.
Involuntary turnover can result from a number of situations, including poor performance,
drug use, or overall slowdown in demand for the organizations goods or services.
Now the common belief is that voluntary turnover is bad for the organization.
After all, if employees were performing poorly they would probably be fired at some point.
But is this always the case?
Certainly the impact of losing an extremely productive employee needs to be considered.
After all, organizations would find it difficult to succeed without a talented workforce.
If talented employees continued to leave this would result in a knowledge and skills deficiency
that would likely affect the organizations ability to compete in their market.
In this case, employee turnover is dysfunctional because the employees that are leaving the
organization are valued members of the organization.
So if dysfunctional turnover occurs when valued employees leave when we don't want them to,
are there instances when employees leave and we actually support it?
The answer is Yes.
Although the general belief is that poor performing employees are eventually removed from the
organization this doesn't always hold to be true.
With the rate of employment lawsuits on the rise, employers are leery of terminating an
employee without substantial documentation that the employee has underperformed or otherwise
engaged in some type of dysfunctional behavior.
Amassing sufficient documentation on poor performance can sometimes take years to accomplish
and even then there are no guarantees.
So when a poor performing employee or an employee who does not fit in well with the culture
leaves on their own it's generally a good thing for all parties involved.
This is the counter to dysfunctional turnover.
Functional turnover.
Functional turnover can also have a positive impact on employee morale.
You may have been in the unfortunate position to shoulder a heavier workload to account
for a poor performing coworker.
This is often demotivating and can result in the perception that fairness is not present
in the workplace.
After all, why should I work hard when I know that my co-worker isn't and he still gets
paid as much as I do?
If this perception of unfairness continues it can result in high-performing employees
lowering their own performance or even leaving the organization.
So while voluntary turnover can in some situations be good for the work environment, it's still
a good practice for employers to deal with under performers and other problem employees
instead of hoping that they'll eventually just leave on their own.
This has been The Different Types of Employee Turnover.
If you have any questions or comments please leave them in the comment box below and I'll
do my best to get back to them in a timely fashion.
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