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What is causing your high turnover rate?

Dec 23, 2022

It’s well known that a high employee turnover rate comes with increase in cost per position. But what is a turnover rate? Your annual employee turnover rate can be calculated using the following equation:​

For example, if the number of separations is 50 and the average yearly employment is 500, then your turnover rate is 10%. Average turnover rates vary by industry but, due to the competitive job market, they reached a total average of 41.9% in 2016.

​Now, how will this affect your cost per position? According to the Society of Human Resource Management, “employers will need to spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement.”
That estimate does not include the possible loss of profit when your team is missing a valuable player. Read more about the cost of leaving a position vacant here.

​If you don’t want your cost per hire to increase due to employee turnover, you’ll need to find out why your employees are resigning. We’ve curated the most popular causes for high turnover rates here:

1. Bad Managers

Unsurprisingly, 17% of employees reported quitting because of a bad manager. People might join a company for the compensation, growth opportunities, or mission but you’ll have just as many employees quit when they’re required to work with a bad manager. The cost of a bad manager is too high to tolerate. Even if the employee chooses to tolerate the manager, their productivity and motivation will decrease.

While not all employees are forthcoming about the reason they’re resigning, it’s the job of the Human Resource department to dig deeper. If you notice a specific department has a higher turnover rate than others, it’s time to investigate the manager.

2. Lack of Growth

Nobody wants to work a dead-end job. Once an employee feels that there is no room for growth, he/she is going to leave. When an employee states this as a major factor in his/her resignation, it can be difficult to provide a counter offer. From the get go, leaders should be supporting their employees’ development. This ensures they’ll be more engaged and productive.

3. Overall Company Culture

Employees are more likely to enjoy their time in the workplace when they fit in with the company culture. Most new hires state “unfit company culture” as their main reason for leaving and 28% of new hires are willing to quit their new jobs if they don’t find it satisfactory in the first 90 days. That’s why it’s important for hiring managers and recruiters to ensure that a candidate’s attitude and work ethic are the right fit for the company before signing them on.

4. Bad Hire

Let’s say you’ve hired a candidate that you thought had the capabilities to improve your team’s productivity and efficiency. However, it turns out that he/she lacks the skills you really need. Both parties are left frustrated and it’s highly likely that the employee will resign.

It’s time consuming to source quality candidates, and tedious to screen and interview every candidate. At some point, you might consider just settling for the best of the bad. However, it is this decision that will cost you more in the long run.

5. Insufficient Recognition or Compensation

If you do not recognize your employees’ good work, whether financially or publicly, someone else will. Employees resign when they feel poorly compensated for the amount of work they put in. They can potentially increase their income by changing jobs – you need to stay on top of the competition or you could lose skilled employees.

Pay attention to these factors and you’ll save money on recruiting new hires. If not, be prepared for regular exit interviews.

Want to reduce turnover rate from the get go? Utilize’s Candidate Intelligence to ensure you are hiring the best possible candidates. We use data science to source the top-tier of qualified candidates and screen out job hoppers. We are able to provide our customers with candidates who are more likely to stay and grow with their company.

If you’re ready to take the next step toward hiring better employees, send us an email at

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