Fluctuation sets alarm bells ringing for managers and HR staff. The labor market is growing and becoming more international, remote work expands the choice, the opportunities for employees increase and companies are fighting for talented employees. Qualified employees have many doors open to them and younger generations, in particular, are not opposed to job hopping. This presents companies with the question: What are some ways to retain good people? In order to bind employees to the company and actively reduce fluctuation, the following is recommended: Get active - and stay active!
Fluctuation originally means "swaying back and forth" or also "being undecided." In a professional context, the term refers to staff turnover, i.e. the "replacement rate" of employees: How many go? How many come? And how quickly does that happen?
Some fluctuation is quite normal. It exists in various forms:
It is referred to as natural fluctuation when employees retire or die.
Intra-company turnover includes all employees who remain in the same company but take on another position or change departments.
The corporate fluctuation means that employees leave the company at their own request. If this happens after less than twelve months, it is referred to as early turnover.
The major drawback of fluctuation is the loss of manpower and potential. In addition, filling the position and training a new team member always involves high costs for the company. On the other hand, new employees also bring in new knowledge and skills. The goal is not to stop personnel changes, but to keep them within a healthy normal range through active and targeted retention measures.
Employee retention refers to all measures that help to reduce non-company fluctuation and keep it at a healthy level long term. It is particularly important that the measures give employees the feeling that they are perceived and valued in the company and team as individuals with unique qualities, concerns and dreams. Employees must feel that they not only have a function in the company, but also a home.
The fluctuation rate or turnover rate indicates how many employees leave the company in relation to the total number of all employees within a year. It is a business indicator that can be calculated. There are different methods for this, such as the formula according to Schlüter. In addition to the permanent staff, it also records new additions. To calculate, start with the number of resignations. For example, if ten people have quit, the number 10 is divided by the number of all employees including new hires, for example 240 employees plus 3 new hires. Multiply the result by 100 and you get the current fluctuation rate in percent. In this case, we would be looking at a rate of 4.1%. The turnover rate varies depending on the industry: it therefore makes sense to make industry-specific comparisons in order to assess how "normal" the fluctuation rate is in the company.
Employees quit their jobs for a variety of reasons, but the general trends are quite clear worldwide: In a study of employees in Australia, Singapore, India, the United Kingdom and the United States, a lack of career opportunities ranked first and inadequate pay ranked second. This is followed by apathetic and uninspiring managers, the lack of meaningful work, unsustainable work expectations and unreliable colleagues. In the Germany-wide study, pay and opportunities for advancement share first place. This is followed by job security, work atmosphere and work-life balance.
In addition, there are personal reasons for which the employer is not responsible. This can be a move, an addition to the family or the start of self-employment. In addition, overriding factors play a role, such as a favorable economic situation or, conversely, high unemployment. Managers have no influence on this, but they should keep an eye on the situation and react.
Avoiding fluctuation starts with recruiting. A meaningful job description, sufficient time to find the ideal person to fill the position, and a well-prepared orientation are crucial to this. Clear communication about work reality and tasks directly in the interview is also a must. During onboarding, targeted technical training on the one hand and personal integration into the team on the other are crucial.
Appreciating employees as personalities means staying on top of things permanently. In doing so, managers should always ask themselves how their team members feel about their tasks, their role in the team and also in the company. Does the workday fit their life situation? What kind of work makes employees satisfied and what achievements make them proud? On the other hand, it is also important to perceive and react to warning signals. Signs of dissatisfaction are, for example, declining commitment, a negative attitude, cynical criticism or high absenteeism.
A fresh fruit basket every week is nice. Well-organized hybrid working is also important as well as the possibility to work in a home office. But this is nothing special anymore. Tangible benefits and factors such as salary are now among the relevant hygiene factors that prevent dissatisfaction. In addition, however, Motivators which have a positive effect are also necessary. These include recognition, job content and responsibility.
In addition to fair pay and flexible working, people today want to develop and realize their individual potential. Important retention measures are therefore the creation of needs-based training opportunities as well as giving employees a say in decisions and providing them with creative possibilities.
Another important binding factor is the meaningfulness of one's own activity. Employees want to stand behind the company's goals and values. Managers should therefore ensure that they authentically exemplify and support the company's values. It also makes sense to involve employees - for example in the area of CSR.
When an employee decides to leave, the first rule is not to take the termination personally. The second rule is to make an appointment for what is called an exit interview. This way, motives can be ascertained and findings derived as to how terminations for similar reasons can be avoided in the future. In addition, exit interviews help people to part on good terms, provided they are conciliatory and overall positive. This is useful for preventing the development of a negative reputation and, more importantly, for maintaining contact afterwards. This way, parting can also be a chance to stay connected.
Staff turnover will always be part of leadership reality and retention measures will always be part of the behavior of a good leader.