August 29, 2022

Types of employee turnover in organizations

For most companies in the world, losing an employee and having a vacant position entails an important change in the regular processes. That is a situation that must be managed correctly to prevent issues in the company’s activities. That leads us to the concept of employee turnover. What do you know about turnover in organizations? Do you know all its different types? 

It’s always important to understand this element and the way it interacts with your organization. At T2W we have an extensive experience in Human Resources administration, so we can help you. In this article we will delve into the concept of employee turnover and the main types of employee turnover in businesses. 

Employee turnover 

Employee turnover happens when employees leave the organization, which creates a vacant position that must be filled quickly. When turnover happens frequently, you have a potential problem that can affect the regular performance of the business. That makes turnover one of the most important concepts in Human Resources. 

That takes us to a similar concept: the turnover rate, as a way to keep this problem under control. The turnover rate is a number that indicates how many people have left the company in a specific period of time. This is usually expressed in a percentage. Based on this, it’s possible to know if turnover in the organization is too high or at an acceptable level. 

For that purpose, there is a turnover rate formula, which helps you identifying the turnover level in your organization. You need to understand that all companies have certain level of turnover. That is natural. However, turnover rate can change a lot depending on the field. For example, the average turnover rate in service companies is around 30% annually. On the other hand, in healthcare, the average rate is around 20% annually.  

It’s important for Human Resources professionals to know the main reasons why employees leave the company. Some of the most frequent causes for high turnover are high stress levels, bad workplace environment, low salaries or lack of career growth opportunities.  

Types of employee turnover 

Types of employee turnover

1. Voluntary turnover 

This happens when an employee decides to leave the company looking for another job opportunity in the market. While this is something that always happens in the employee lifecycle, there is a problem when this happens too often. In that case, it’s necessary to delve in to the reasons why employees usually leave the organization. A great tool to get that valuable information are exit surveys, which can reveal many potential problems inside the organization. 

2. Involuntary turnover 

There also is involuntary turnover, which happens when employees are terminated by the organization.  Since this is a decision made by the company itself, this is considered less of a problem and more of a functional action. In this case, there are not potential problems regarding employee management that should be solved. Some of the main reasons for this type of turnover are poor performance, lack of compatibility between the employee and the organizational culture, behavioral problems, reduction in staff, among others. 

3. Internal turnover 

When we speak about internal turnover, we refer to employees changing positions inside the same organization. In this case, there are two types of internal turnover: vertical and horizontal movement. In the first case, vertical movement happens when an employee is promoted to a position of more responsibility inside the same area. This is common in companies that offer a career path for the professional growth of employees 

On the other hand, there is horizontal movement, which usually happens when an employee is transferred to a new position inside the same company, but in a different area. This is not a promotion, but a new environment where the employee will have completely different tasks.  While in both cases there is no talent lost, internal turnover also leaves vacant positions that will have to be filled. This starts again the recruitment process. 

4. Retirement 

Lastly, another reason why an employee could leave a company is retirement. This is a normal stage in the professional life of any employee. The good news is that this is a foreseeable scenario when you have a good personnel management. For that reason, it doesn’t usually cause many problems for the organization. 

Now you know what is employee turnover and its different types. Keep in mind that is always necessary to check turnover in an organization to identify possible issues in talent management. 

At Talent2Win, we strive to align your company’s business objectives with the best Talent Acquisition strategies available. If you want to learn more about the services we offer, do not hesitate to contact us.  

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