Employee Turnover

Employee turnover is the rate at which employees leave a company and consequently, the rate at which new employees are hired in order to replace them.

Ideally a company will have a low employee turnover rate, meaning that employees are resigning from the company on a relatively infrequent basis. A high employee turnover rate can be costly and wasteful to companies.

If a company suffers from a high rate of employee turnover, they may be forced to pay employment agencies or executive search firms to manage the process of recruitment for them in order to fill the vacancy or vacancies. See more on employment agencies and executive search firms here and here.

If a company is able to allocate internal resources to replacing employees departing the company, recruiting for roles on a frequent basis and training new staff that do not stay long at a company is a wasteful expenditure of staff time and energy that could otherwise be invested in other areas of the business.

It is important for companies to be aware of their employee turnover rate and assess the causes of a high rate of employee turnover if they have one. Common causes are often low levels of employee engagement and employment motivation. See more on employee engagement and employment motivation here and here.

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Related terms

Employee Engagement

Employment Agencies