According to the Chartered Institute of Personnel and Development, employee turnover is a measure of the quantity of workers who leave a firm, for whatever reason. The figure is often expressed as a percentage. Companies don’t want to lose their employees and try to retain them.
Employees tend to develop their knowledge and expertise over time when they stay with the same employer. Knowledge and expertise is developed by the expenditure of company resources, through expensive training courses, in some cases. This knowledge and expertise is an asset of the company and an asset to the company. One objective for employee retention is maintaining these company assets and continuing to benefit thereby.
Businesses often try to recruit employees from rival businesses, in a process informally called head-hunting. They may offer tempting incentives to lure staff away from their current employer. It makes sense to hang onto your employees, not least because you do not want rival companies to benefit from their skills.
When employees stay with a firm for a long time, the company enjoys a certain degree of stability. This stability aids the business by providing it with a firm base for operations. Companies that are regularly having to recruit new staff, even when this is a sign of expansion, often stumble in their forward momentum because new members to the team bring new inter-personal and training challenges.
When an employee leaves a company, finding a replacement costs the company time, effort and money. This is effort companies could use better in other ways. Investopedia quotes one source as claiming the cost in monetary terms alone is between 1.5 and 3 times the new employee’s salary. It’s little wonder that companies who find good staff want to hang onto them.
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