The most common phrase we hear for the staff circulation or labour cycle, and I think that is because it is more charming as it is not a Turkish phrase, is “turnover rate”. Turnover is a bad thing. It’s a good thing that it is low. If it goes up, then we should be panicking and questioning “what’s going on, where are the workers going, why are they leaving?!”
For the ones who heard for the first time, “Turnover 101: Introduction to Turnover” part is over. Let’s continue with the detailed definition: In Human Resources litterateur, turnover is the rate obtained as a percentage from a comparison of the number of employees recruited and leaving. Mathematically, monthly turnover rate is calculated by dividing the number of personnel leaving the company in the relevant month into the total number of the personnel already working within the company and new ones.
monthly turnover (%) = the number of personnel leaving the company / (number of personnel in the company + newly recruited personnel)
Why is it a bad thing if this rate is high? Because there are many negative effects of high staff circulation for companies. These effects can be listed in the most concise way as below:
* When there is a need for a new employee, the search for candidates should start after determining the requirements for the position. Candidate search and selection processes are a waste of time and labour. If there is a separate consultant firm included in the process or the candidates are applied special tests, each one of them will have their own costs.
* If an employee left his/her job and went to a rival company, that means you lost a successful worker and he/she left with all in-house secrets. (Yes, we probably signed a Confidentiality Agreement, and it would probably be very hard to prove that you learned the information you use now, or vice versa; you use an information that you learned from us…)
*Sometimes, when an employee leaves the company and starts to work in another place, he/she tells their ex-colleagues about the new job that they like it a lot and maybe those colleagues follow them to the new company, which makes the rate get higher.
*There is an extra cost that the company pays for a new employee who cannot make any contribution in the beginning, as well as additional work force and expenses for their trainings during the orientation process.
*When such fluctuations happen within a company, those who are happy with their current positions start to get nervous and ask themselves “What is going on?”. If there is an employee who thinks that something’s wrong, he/she may start to look for another job with a fear that it’s time for them to go, as well. This search may result in a leave of another successful worker.
*When an employee in a one-to-one contact with a customer leaves, it means for the customer that the contact person, with whom the customer grew a good communication and long contact, is changed and a new “introduction process” begins for them. If this process happens again and again, then the customer may start to feel unsafe thinking “What is going on?”.
Am I too pessimist? I don’t think so. I’m sure there are a lot of negative results that are not included in this list and this fact is a hamper for the sustainability of the business in any way. Besides, this rate is over 20% in many sectors (which is not good).
As in the title, you can hear the expression of “You know the turnover rate is high in our sector.” from Human Resources in many sectors. (This is actually another issue. I think there is a psychological explanation for this. You know, everybody believes that their job is the hardest to do. Even the sentence of “your job is so difficult, man” is a good one to start a conversation. Likewise, having a high rate of turnover makes Human Resources’ job difficult. The title is another way to say “What I do is a very difficult job to do”, with the logic of “the more turnover, the harder the job is.”) Yes, there are a few sectors this rate is high: Retail, IT, Tourism, Telecommunications, etc. The reason why this rate is high in these sectors can be explained as the number of rival companies these employees can go to work is getting higher every day. Among general reasons that are less effective without having any relation with the related sector, it can be the inconsistent career goals of Y Generation that doesn’t know what they want exactly; people who want to go back to academic life with the intention of “having a relaxed life” after working for a bit; the dreamers who think “I would definitely get two times more with the same work I do in another place; the ones in Istanbul who think “I spend my life on the road, I should find a job that is closer to my house”.
No, we are not like our fathers who retired from where they started working. Yes, we have certain career goals. We believe that working in the same place will not help us develop ourselves. Yes, we can count a million reasons. Yet, changing a job frequently is not a positive act for many employers. If a candidate has 6 different work experiences in his/her 2-year work life and he/she cannot explain them reasonably, unfortunately it will have a negative impression. So, as for me, even this reason is enough to think twice before deciding to leave the job.
On the other hand, the employers are responsible for providing a suitable working environment for their employees to make them feel happy and enjoy what they do, as well.