![]() ![]() And employee engagement is linked to organizational outcomes, with a very important effect being that companies with lower turnover are more profitable and have more loyal customers. Companies with higher levels of employee engagement have lower turnover rates - as much as 43% lower for companies that have less than 40% annualized turnover, according to a study of more than 112,000 business units by analytics firm Gallup. Turnover and retention are closely linked to employee engagement. High turnover and low retention rates signal problems with aspects of the organization’s culture and employee experience. This includes whether it is paying competitive salaries, providing training and opportunities for advancement and offering a good work/life balance for employees, as well as how effective management is. ![]() And if it can’t attract more people with new and specialized skills, it can’t innovate or execute on growth plans.Įmployee turnover and retention rates provide strong indicators about how well the business is taking care of its people. If a business doesn’t have the right people with the right skills, it can’t deliver its products and services. Why Measuring Employee Retention & Turnover Matters Monthly turnover rates are added together to calculate and compare annual turnover rates. This provides a more accurate and actionable view of departures that are the result of, for instance, seasonal layoffs and give more accurate long-term insights into that rate. Turnover rates provide important snapshots of employee movement and are, for that reason, calculated and viewed by month or quarter.
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