Long employee tenures are no longer the norm within today’s offices. We don’t expect employees to stay with organizations for ten, fifteen, or twenty years as was the goal for previous generations. But, we should still be concerned about the retention of employees and new hire turnover.

Constant turnover has a high cost for employers and is felt throughout business operations.


Once an employee leaves, they take all their training and expertise in the area with them. The team’s productivity and quality levels decrease as other members try to pick up the work.  If the team is already short-staffed, this could be detrimental to business.

Turnover costs can be compounded by overtime or a temporary worker. Long hours and added stress only decrease an employee’s performance, so overtime may not be a good option. Alternatively, onboarding a temp will require training for someone who may be leaving before they’re meeting performance needs.

Even once the open position is filled, it will take time and resources to train the new person. It can take up to six months for the new hire to get up to speed. Training new hires takes time away from managers and team members. Also, during that time, mistakes will happen. The costs of mistakes can be vast, up to and including losing valued clients.


Calculating new hire turnover


It’s important to keep up with your new hires and measure their turnover. To calculate new hire turnover, take the total number of separations over a given period of time, divided by the number of people hired during that time frame. Multiply the resulting decimal by 100 to get the percentage. A few milestones to calculate this metric at are 30-day, 90-day, 6-month, 1-year, and 3-year.

A high turnover rate should be a red flag for both HR and talent acquisition (TA) teams.


From the TA perspective, a higher rate could mean you’re not hiring the right people. To address it, take a look at the full hiring lifecycle, from sourcing to interviewing to offers. Maybe you’re not sourcing from the right talent pools or the hiring managers are not asking the right questions. Also, it’s not just about hiring someone who could do the job, it’s also about finding the right culture fit. Even someone with all the right skills and experience will not perform well if they can not integrate within the organization.

So after looking at the TA side of things, new hire turnover is still high. This is when the functions of the HR team should be looked at. A high turnover rate for new hires, especially within the first year, means there are breakdowns in the onboarding process. Employees may not be getting adequate training or experience frustrations with trying to navigate the workplace. If turnover is higher after the one year mark, there could be problems with career growth and leadership development for employees. Employees may not be seeing what their opportunities are for growth within the organization and move on to find it.


But let’s not forget… 


A low turnover rate means you’re retaining people, which is great. But, that doesn’t mean you still shouldn’t take a look at what makes your recruitment, onboarding, and employee development work. You want to ensure you continue those great practices with standardized processes. We can’t expect employees to retire with the organization, but we can set them up to be as successful for the time they are with us.




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