Pavooq Insights and Updates

What Causes Employee Turnover?

employee turnover
For nearly a decade, the disastrous 2002-2003 SARS pandemic was a mystery in the field of epidemiology. The cause of the sickness, which killed 774 people around the world, was unknown, and there was no vaccine.

Finally, in late 2017, a group of Chinese scientists found the virus in a group of bats living in a cave that was very far away. These bats would make it a lot easier to make a vaccine and plan for future epidemics, a SARS expert told the Guardian.



How to investigate the cause of the High Turnover Contagion:


As emotional contagion specialist Sigal Barsade notes, employees “routinely ‘catch’ each people’s emotions when working together in groups.” This may impact the decisions people make, including whether to stop. An academic study released in 2009 indicated that coworkers’ job embeddedness and job search activities “explain variance in individual voluntary turnover above and beyond that explained by other individual and group-level predictors.”

In other words, voluntary turnover doesn’t only happen in isolation due to an individual’s job satisfaction concerns.

Quitting is infectious.

The origins of turnover contagion could be difficult to pin down (particularly in highly networked firms), but the ramifications might be significant: The average cost to replace an exiting employee is $109,676, according to Bersin by Deloitte report. An increase, then, in turnover by merely 1 percent in a business of 30,000 employees may cost $32.9 million per year.

Granted, not all turnover is undesirable — such as when low-performing staff departs — but when people, particularly good performers in important areas, start quitting in quick succession, it’s undoubtedly going to adversely affect overall productivity and the bottom line.

To find the origin of turnover contagion and limit its effects, HR executives thankfully don’t have to go on risky journeys into secluded tunnels or rely on subjective narratives and gut feel.

Instead, HR may take a more data-driven strategy to characterize the problem, calculate employee turnover, forecast the risk of leaving for employees, and prepare for the most vulnerable circumstances.

Here are four ways human resource professionals may analyze employee turnover rates in the workplace utilizing a data-driven approach:

#1: Investigate Whether There Is A Problem With Turnover

Turnover rates are typically much greater in one group than in the whole employee population. To identify whether you have a turnover issue, utilize people analytics tools to look at your monthly turnover rates and dig down by role, regions, teams, and departments.

What’s typical for one group may be exceptional for another, but a decent rule of thumb is that if you notice an increase in the annual turnover rate by 3-5 percent, something is awry.

To assess if you have a case of turnover contagion on your hands, check for a few key things:

  • Employees departing in fast succession — This may be due to the effect of their peer group (instead of individual job satisfaction concerns) (instead of individual job satisfaction issues).

  • Turnover dynamics among close-knit teams — “The impact of the turnover contagion is more obvious in smaller team groupings that are self-contained,” argues anthropologist Krystal D’Costa. So pay special attention to levels of attrition among these groups.

Yes, high turnover rates may be due to external market variables that are beyond your control. But if benchmarking data suggests that your industry counterparts have substantially higher retention rates than your firm, then it’s evident that you own the issue.

#2: Find Out What's Causing The Issue.


When you figure out why turnover is on the increase, retention programs may be better geared to address the fundamental problems. It's "the difference between carpet bombing and utilizing laser-guided missiles," as one HR VP described it.

This entails examining resignation drivers in all turnover circumstances to understand what variables raise and reduce resignations. It also entails examining resignation patterns (how resignations are affected by things such as employee experience, compensation ratio, promotion wait time, pay increases, tenure, performance, training opportunities, and even the total number of employees).

When it comes to turnover contagion, there are a few unique aspects to consider. Examine the following critical aspects concerning the population that is departing: Are they workers that other firms in your region find appealing? What do they say during exit interviews? Do they have a low-approval supervisor in common? Is it true that they're all working on the same thing?

Keep in mind that performance differences do important as you move through the data:

  • While top performers need 25% more spending than average performers, "organizations that have calculated the performance gap between average and top-performing workers have discovered that it is typically 300 percent greater," according to HR expert Dr. John Sullivan.

  • Weak workers, on the other hand, are more likely to be absent, make more mistakes, have worse customer relations, lower employee engagement, and require more of HR management's attention.

As a result, creating "blank" retention campaigns for everyone should be avoided. When large companies' initiatives are more focused, the overall turnover rate drops dramatically.

#3: Identify High-Risk Situations


It is feasible to reduce employee turnover contagion from happening in the first place. If you can identify potential sources of the spread (well-connected persons who may escape), you may take proactive actions to limit their chances of departing and manage those around the flight risk person.

This is where predictive skills may assist; if you wait until annual engagement surveys, it may be too late to make a difference.

Predicting the chance of an escape may take some complex equipment, but the technique is simple: A profile of the company's prior talent is developed, which may afterward be leveraged to locate equivalent traits in current workers.

You may go one step further and select those who have close ties to the person once you know who is likely to travel. This is where data from sociometric badges, which show unofficial team connections, can be beneficial. Examining project team statistics, on the other hand, may be valuable.

HR may then share this information with line managers, who may then meet with workers who are on the brink of leaving and those who will be affected by their departure.

#4. Prepare for Possible Triggers


Epidemiologists exploit a range of factors, such as insect populations, human demography, and airline routes, to mimic epidemics during high-risk conditions, such as when air travel rises around the American Thanksgiving, as detailed in this article. These maps are then utilized by health teams to plan responses.

When a high-risk incident is on the horizon, HR may plan a response to prevent turnover contagion. It's now easy to gather data from multiple sources to simulate different situations owing to the digitization of the complete employee lifecycle, from sourcing to offboarding.

Let's say your firm is planning a huge merger and acquisition. "Many merger and acquisition (M&A) deals have inherent retention issues," according to Bersin by Deloitte, "owing to adverse feelings typically felt by workers, including survivor guilt due to decrease of other employees."

With this in mind, you may establish retention tactics for the employees who produce value. Because it may be challenging to eradicate turnover contagion, you may plan for a larger degree of turnover in your team, so justifying fewer job losses.

Look for technologies and tools that enable you to develop and assess various workforce planning scenarios (each with different workforce mobility and cost assumptions) so that you can not only make the best solution for your organization but also have backup plans in place.

Turnover Contagion: The Benefits of a Laser-Focused Approach


Individuals rely on others to help them understand reality in challenging situations, which has long been a prominent theme in social psychology. Indeed, the workplace is growing more volatile and unpredictable, making us more vulnerable to the effects of people around us.

There is no such thing as an employee who works on an island. Most people, on the other hand, are portrayed as individual line items on a spreadsheet. When data from the whole employee ecosystem is gathered and analyzed, we have a far better understanding of how turnover contagion occurs, and as a result, we understand how it can be managed and prevented.

Russell L. Ackoff, an American organizational theorist, stated, "We fail more often because we address the incorrect issue than because we have the wrong response to the proper problem." Using an evidence-based approach to turnover contagion issues, HR managers can identify — and fix — the relevant problem.