Stop the Costly Revolving Door of Employee Turnover

June 2, 2021
Author: ThinkWhy Staff

A high employee turnover rate can hamper productivity and burn a sizeable hole in your pocket. It's no secret that staff turnover is a costly expense. According to Gallup, total turnover costs can range from $600,000 to $2.5 million per year for an organization of 100 employees. This includes hard dollar costs, as well as soft costs, such as reduced employee morale and its effect on productivity.

Voluntary turnover affects your bottom line.

As of a January 2021 study, 27% of employees indicated intent to change employers this year. Another source reports that up to 28% of new employees quit within the first 90 days on the job. Needless to say, this is less than ideal and will likely impact your organization.

Learning to recognize and prevent common causes for staff turnover can help improve retention and the bottom line while building a more robust company culture. Let’s take a look at the most common causes of employee turnover.


Burnout is wrecking employee retention. According to a study by Kronos, 46% of HR leaders say burnout is responsible for almost half of the annual workforce's turnover rate.

Causes can range from overloading capable employees, an excessive need to fit into the corporate culture, unclear job expectations, work-life imbalance, and a hostile work environment. Changes brought about in dealing with the pandemic, such as hours on Zoom meetings for some and additional sanitation responsibilities and procedures on the job for others, added to the pressure.

If you suspect your employees are burning out, do you know why? For instance, are you offering enough flexibility? Are you sharing workloads fairly and treating employees equally? Have you made clear how their job contributes to organizational success? Provide regular two-way communication with your employees to give them the opportunity to express their needs and preferences, so that these can be addressed in a timely manner.

Addressing these issues can make employees feel more appreciated, secure and reduce their chances of jumping ship for a more favorable employer.


Low Pay

Ironically, low pay can have a high cost for your business. While 76% of people say their pay is sufficient for them to remain with their company for another year, only 47 percent of employees scored their employer highly for compensation and benefits. As of January 2021, more than a third say that financial motivators are their top reason to change jobs. As many as 74% of millennials expect a raise each year to stay at their current organization. Also, 66% of people said they would change companies for a salary increase if they don’t expect a raise at their current employer.

What are your competitors paying? If it's more than you're offering, employees are less likely to stick with you for the long term. So, make sure you're offering a salary that reflects their skills and experience and budget for wage increases on par with their professional development.

Work-life Balance

Traditional 9 to 5, Monday to Friday work weeks and standard retail schedules can be tough on employees if you're not willing to be flexible. In fact, 43% of new hires who leave do so within their first 90 days, with inflexible schedules and excessive travel being two of the top offenders. More than 50% of workers identified work-life balance as their number one priority for being an engaged employee, and 32% wished they had more flexibility in their schedule or work location.

The bottom line? To boost employee retention, it's time to intentionally allow for work-life balance.

In addition to assigning realistic job responsibilities, try offering these flexible time and location options:

• Telecommuting / working remotely
• Compressed work weeks
• Flex time
• Part-time arrangements
Hybrid work models (some days in-office; some days remote)

These can all provide employees more time to tackle responsibilities at home. Not only will flexibility go a long way to enhancing employee satisfaction, but it will also often coincide with an increase in productivity. After all, employees aren't as distracted by the anxiety of juggling work and home-life obligations.


What causes so many people to flee a new job within the first 90 days? This is an especially acute problem in the retail and hospitality industries but affects other organizations as well.

The critical first few weeks help a new employee learn how to do their job properly, meet and feel welcomed by their supervisor and co-workers, and understand the company culture. Pre-onboarding for paperwork and assigned relevant videos and readings can help make time for the first day on the job to be more engaging. Providing a strategic onboarding schedule and assigning a “buddy” can also ease the onboarding transition.

If you are experiencing a large drop-off of new employees, take the time to investigate the reasons. Efforts spent understanding and improving the process, from initial paperwork to job training and feedback, should pay for themselves many times over.

Related: Is Your Employee Onboarding Designed for Retention?

Are You Ready to Improve Your Employee Retention Rate?

Employee retention impacts your business's bottom line. If your employees aren't satisfied, you risk losing talent, wasting money on turnover costs, and hampered productivity. To avoid a high turnover rate, be open to making operations more flexible and ensure your staff feels valued. People want to know their worth and be recognized for their contributions.

Aim to identify the challenges your employees face beyond the workplace and offer more flexibility and better pay. Once you can, you're better positioned to nurture a proactive and satisfied workforce that's more likely to stick with you in the long run.

Related link: Under Pressure: Mid-Level Managers Impact Culture and Turnover