How to Manage Your Turnover Rate for Maximum Employee Retention

Every resignation letter represents a missed opportunity. Whether it’s due to better career prospects, workplace dissatisfaction, or lack of growth, employees leave when their needs aren’t met. Understanding why turnover happens is the first step in preventing it. With the right strategies—such as structured onboarding, competitive benefits, and career development programs—organisations can retain their best talent and strengthen their teams.

By Jon Windust

Posted 28 February 2025

Three HR people surrounded by elements of Cognology’s HR Onboarding Software User Interface

Understanding Employee Turnover

Employee turnover refers to the rate at which employees leave an organisation and are replaced by new hires. It is broadly classified into two categories:

Voluntary turnover: When employees leave by choice.
Involuntary turnover: When employees are terminated due to poor performance, redundancy, or other organisational needs.

While both types impact business operations, voluntary turnover is usually more preventable by addressing workplace practices. Some of the most common causes of voluntary turnover include:

Job dissatisfaction: Employees who feel unfulfilled in their roles are more likely to seek new opportunities.
Better compensation elsewhere: Pew Research Center found that the majority of workers who quit their job cited low pay (63%) as the major reason they left.
Lack of career growth: Employees who do not see clear paths for professional advancement may leave for organisations that offer better development opportunities.
Poor management: Inadequate leadership and lack of support from supervisors are among the leading causes of voluntary turnover.
Workplace culture: A study by Deloitte found that a toxic or unsupportive workplace culture is 10.4 times more likely to contribute to employee turnover than inadequate compensation.

The Impact of High Employee Turnover

High employee turnover comes with considerable financial and operational costs, including:

Recruitment and training expenses: Replacing employees involves advertising job openings, conducting interviews, and providing onboarding training.
Lost productivity: New hires require time to reach optimal performance levels, impacting team efficiency.
Knowledge drain: Departing employees take valuable institutional knowledge with them, potentially disrupting workflows.

According to a report by the Society for Human Resource Management (SHRM), replacing an employee can cost up to 50-60% of an employee’s annual salary, highlighting the significant financial burden of high turnover rates.

Beyond the financial implications, high turnover can create a ripple effect throughout the organisation. Frequent employee departures can negatively affect the remaining workforce, with common issues including:

Increased workload: Remaining employees often need to take on additional responsibilities until a replacement is found.
Decreased engagement: A high turnover rate can create instability, reducing employee motivation and engagement.
Lower trust in leadership: Employees may lose confidence in management’s ability to maintain a stable work environment.

Effective Employee Retention Strategies

Recruitment and Onboarding

Hiring the right candidates and providing them with a structured onboarding process is important for long-term retention. Organisations should:

Develop a clear job description to attract suitable candidates.
Implement a well-structured onboarding program to set clear expectations.
Assign mentors to new hires to ensure a smooth transition into the workplace.

Competitive Compensation and Benefits

To retain the best employees, organisations should offer competitive salaries and benefits. This includes regularly benchmarking salaries to remain industry-competitive, providing health and wellness benefits to maintain employee wellbeing, and incentivising long-term loyalty with performance-based bonuses.

Professional Development & eLearning Opportunities

Employees highly value opportunities for professional growth. Offering clear career progression paths, access to eLearning platforms for upskilling, and support for certifications or further education can increase employee satisfaction and loyalty.

Positive Work Environment

A supportive workplace begins with transparent communication between employees and management. It also includes opportunities for collaboration through team-building activities and ensuring concerns are addressed before they escalate. These elements create an environment where employees feel valued and connected to the organisation’s goals.

Recognition and Reward Systems

Acknowledging employees for their contributions is a powerful way to boost motivation and improve retention rates. Strategies such as peer recognition programs, performance-based incentives, and celebrating milestones help employees feel valued and appreciated, which can enhance their loyalty to the company.

Leveraging Cognology’s Solutions to Increase Employee Retention

Onboarding & Inductions

With Cognology’s onboarding software, new employees receive the support they need right from the start. Our software features automated workflows that streamline the entire onboarding process, while digital documentation management allows for a paperless experience. Businesses can also create customisable induction programs that are aligned with their company culture, helping new hires integrate effectively.

Performance Management

Cognology’s performance management software helps organisations foster employee development through:

Regular feedback mechanisms that enhance communication.
Goal-setting frameworks that align employee efforts with business objectives.
Continuous performance tracking to identify development opportunities.

Learning Management

Investing in employee development leads to higher retention. Cognology’s Learning Management System (LMS) supports professional growth through:

Customisable training programs tailored to employee needs.
On-demand eLearning options to encourage continuous learning.
Progress tracking tools to measure skill development.

Explore How Cognology Can Support Your Employee Retention Strategies

Effective employee retention requires a strategic approach that includes structured onboarding, performance management, and continuous learning opportunities. Cognology’s suite of solutions empowers organisations to foster a productive and engaged workforce, ultimately reducing turnover rates.

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