People are joining and leaving organizations all the time. But some find it more difficult to keep people than others.

There are a number of reasons why organisations might suffer high staff turnover.  Rates of turnover vary from one industry to another.  Retail catering is always going to have more staff coming and going when compared to accounting firms, because many of the people who work in restaurants and bars are students or travellers taking short term positions to generate some income before moving on.  But even a coffee shop can suffer from staff turnover higher than that of the industry average.

Experience shows the following to be major causes of high staff turnover:

  1. Below average rates of pay. Every industry has organisations that pay well and some that pay badly.  There will always be a few employers who try to get away with paying as little as possible and high staff turnover is the inevitable result.  Employees might stay a little longer in times of recession because no other work is available, but they know they’re being exploited and will be looking for a way out.
  2. Poor training.  Asking someone to do a job but not giving them adequate training is demotivating.  Some people pick it up quickly and may even thrive on the challenge, but they are the exception.  Often there are good intentions to train but other, apparently more important, things keep getting in the way.  Managers continually under estimate the value of training staff.
  3. Weak leadership.  In most organisations people work teams alongside colleagues performing complementary roles.  Between them they run a process or deliver a solution or product, whether in a coffee shop or a bank.  Teams perform at their best under clear leadership, where someone has a vision of how the team should work and the level at which it should perform.  Weak leadership can lead to disagreements about purpose and direction, disharmony and employee discontent.
  4. Unreasonable expectations. Some managers expect too much from their staff, often because they don’t know how to do the job themselves and don’t understand why it takes longer than they think it should.  Or they want an unreasonable level of commitment to unpaid overtime or working through breaks.  This is often accompanied by the absence of positive feedback and encouragement.
  5. A history of high turnover. It can be difficult to break the cycle of high turnover. When new employees join an organisation they soon become aware of the culture and they quickly pick up on expectations about length of service. This will affect their own career planning and unless serious effort is put into breaking the cycle high turnover will continue.

A period of financial uncertainty or recession naturally reduces staff turnover as employees have fewer opportunities to move on.  However, this is only a temporary and when the economy recovers organisations with a history of high turnover may struggle as a relatively high proportion of their labour force look to leave at the same time.