Turnover Will Destroy A Business

Understaffed Coffee Shop

Turnover can and will destroy your business. Can your business afford to lose between $15,600 and $62,400 every time you hire the wrong employee? According to Gallup that’s what it could cost every time a full time employee earning $15.00 an hour leaves either voluntarily, or for cause. This figure does not take into account other potential issues, such as, legal costs if the employee sues for wrongful termination.

Now there is no question you will have turnover. In fact, according to iMercer in 2019 United States businesses averaged 22% employee turnover. The retail and wholesale industry averages 60.5%. If you’re a numbers person, using the average turnover rate and the above example with 25 employees, this could cost your business between $390,000 and $1,560,000. I understand that every business is a little different and your specific costs could be lower or higher, but either way it is money that could be significantly reduced if managed properly.

Spending the Time to Hire the Most Qualified Candidate Will Reduce Turnover

Employee Interview

According to Work Institute in a 2019 report (reflecting what happened in 2018) 77% of employee turnover can be prevented. The reasons employees are voluntarily leaving their jobs are:

  • Career Development
  • Work-Life Balance
  • Manager Behavior
  • Compensation and Benefits
  • Well-Being
  • Job Characteristics
  • Work Environment
  • Career Development

This is the employee using your business as a stepping stone to a more advanced position somewhere else? In and of itself isn’t a reason to not hire someone, but understanding it up front helps you better evaluate whether the potential employees is someone that will add considerable value to your business before leaving. Asking questions that will draw this type of information out is important. Sometimes asking a question like, “what is your dream job” draws out good information.

Work-Life Balance

This is the employee that needs a different schedule all together. This translates into going from part-time to full time, full-time to part-time, different days off, mornings versus evenings, etc. Listening carefully to your employee will help you understand their issues before it’s too late. If you have an extremely valuable employee, it may be more beneficial to your business to make allowances so that you can work around the employees’ issues.

Manager Behavior

This is the employee that has a problem with the way you or your manager is treating them. This does not mean that you should not be holding them accountable if they need to improve. It could mean that you are treating them differently that everyone else, raising your voice, not listening to them, or any number of other reasons.

Compensation and Benefits

This is the employee that needs more money and/or benefits such as healthcare. This is something you will have to evaluate carefully. As a general rule an employee should either be making or saving the business at least three times what their wages and benefits are costing the business. An employee that accepts the compensation package when they were first hired most likely had something change in their life, such as, got married, had children, lost their apartment, etc.


This is the employee that becomes concerned with the working environment. This could mean a procedure changed that they felt made them unsafe. It could mean that they are being harassed by another co-worker and afraid to mention it. Whatever the reason maybe it is important that you stay tuned into what your employees are telling you through their words or actions. If you don’t correct something that is wrong with your work environment this could be a constant problem with any future employees.

Job Characteristics

This is the employee that didn’t completely understand what the position entailed before they were hired. This means that you need to make sure the job description is detailed and includes everything you can about what the job entails, especially, any unsafe or uncomfortable duties.

Work Environment

This is the employee that is uncomfortable with the work environment. That could mean that they don’t get along with a coworker or manager even if it hasn’t violated any rules or laws. It could mean that the environment is too cold, hot, not clean, no breakroom, loud, quiet, etc.

In Conclusion

Recognizing the signs through an improved hiring process, or if they are already an employee, listening and watching for any clues, if critical to not reducing turnover.  Focus your attention on finding out as much as possible about your applicants or your employees. Don’t make the mistake of depending solely on their resume to answer those questions. Resumes can be professionally prepared to make anyone look like a rock star.

May God bless you and Good luck!


Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.