Innovative high-tech companies and the most successful manufacturers frequently experience low turnover rates while fast-food restaurant managers expect turnover to be as high as 50 to 75 percent.
The prospect of getting higher salary somewhere else is one of the most obvious reasons of turnover. However, there is considerable evidence that money is often not the root cause of turnover, even when it is a factor in an employee's decision to quit. Some experts believe that high turnover persists in certain jobs and companies because they have an atmosphere in which employees look for reasons to leave, and money is a convenient and sometimes seductive justification.
High staff turnover can be directly linked to management practices. Turnover tends to be higher in environments where employees feel they are taken advantage of, where they feel undervalued or ignored, and where they feel helpless or unimportant. Clearly, if managers are impersonal, arbitrary, and demanding, there is greater risk of alienation and turnover.
Some turnover is demographically specific, particularly for women who are balancing significant work and family duties at the same time. Such women (or men) may choose to leave a company instead of sacrificing their other interests and responsibilities in order to make the job work out. Some women elect to quit their jobs at childbirth and not simply taking a maternity leave.
High turnover can be a serious obstacle to productivity, quality, and profitability at firms of all sizes. Turnover is no less a problem for major companies, which often spend millions of dollars a year on turnover-related costs. For service-oriented professions, such as management consulting or account management, high employee turnover can also lead to customer dissatisfaction and turnover, as clients feel little attachment to a contact. Customers are also likely to experience a lack of loyalty each time their representative changes.
In general, reducing employee turnover saves money. Money saved from not having to find and train replacement workers can be used elsewhere. The U.S. Department of Labor estimates that it costs about 33 percent of a new recruit's salary to replace a lost employee. In other words, it could cost $11,000 in direct training expenses and lost productivity to replace an experienced employee making $33,000. Private industry estimates for highly skilled jobs price turnover losses at a much higher level, up to 150 percent of the position's annual salary.
But experts agree that high staff turnover is because of poor management. As they say: if there is a high staff turnover in your company, it is because there is something wrong with the management.