How do you reduce employee turnover?

Employees changing jobs is a natural part of working life. But when many people leave the same organisation within a short period, it can become both costly and difficult to build a stable business.

High employee turnover can affect continuity, expertise, workload, customer relationships and workplace culture.

Reducing employee turnover, however, is not about trying to make every employee stay forever.

The goal is to create a workplace where people who are a good fit for the organisation have good reasons to want to stay, develop and contribute over time.

What is employee turnover?

Employee turnover describes the proportion of an organisation's employees who leave and are replaced during a given period.

Some employee turnover is natural and can even be positive.

Problems can arise when the organisation repeatedly loses valuable expertise or when people leave for reasons the company could actually have influenced.

Why do employees leave?

People leave workplaces for many different reasons.

Common reasons can include:

• Poor leadership
• Limited development opportunities
• Heavy workloads
• A poor working environment
• A lack of appreciation
• Unclear expectations
• A weak company culture
• A lack of trust
• Insufficient compensation
• Better opportunities elsewhere

It is therefore important to understand why employees resign in your own organisation rather than relying on general assumptions.

8 ways to reduce employee turnover

1. Understand why people leave

Start with the facts.

For example, analyse:

• Exit interviews
• Employee surveys
• Absence patterns
• Employee turnover across different teams
• Recurring feedback
• How long people stay

If an unusually large number of people leave the same department or manager, there may be a local problem that needs investigating.

2. Develop leadership

The relationship with an immediate manager often affects how people experience the workplace.

Good leadership involves, among other things:

• Clear expectations
• Trust
• Communication
• Feedback
• Support
• Fairness
• The ability to listen

Managers therefore need more than a good understanding of the business. They also need opportunities to develop their leadership and understand what makes a good leader.

3. Create development opportunities

An employee does not always need to change companies to take the next step.

Create opportunities to:

• Learn new skills
• Take on greater responsibility
• Participate in new projects
• Move into a different role internally
• Develop within their specialist field
• Prepare for future leadership roles

When people can see a future within the organisation, they have less need to seek development elsewhere. This is closely linked to how you motivate your employees over time.

4. Provide regular feedback and appreciation

Employees should not have to wait for an annual development review to find out how they are doing.

Regular feedback creates clarity. Explore how to give feedback that works.

Appreciation also needs to be specific and genuine.

Explain what the person did well and why it mattered.

This strengthens both learning and the feeling that their contribution is recognised.

5. Create a sustainable workload

Temporary periods of intense work occur in many workplaces.

But if a heavy workload becomes permanent, it can affect performance, motivation and the desire to stay.

Leaders therefore need to pay attention to:

• Unreasonable demands
• Unclear priorities
• Recurring overtime
• A lack of resources
• Insufficient recovery time

The fact that an employee can handle a heavy workload for a period does not mean the situation is sustainable in the long term. Read more about how to prevent workplace stress.

6. Build a culture people want to be part of

Company culture is created through everyday behaviours.

How are people treated?

What happens when someone makes a mistake?

Can employees speak their minds?

Do leaders live by the organisation's values?

Culture affects people's sense of belonging and can be an important reason both for staying and for leaving. It can be valuable here to work deliberately on how you create a strong company culture and create job satisfaction.

7. Encourage involvement and trust

People often want to have a say in their work.

When every detail is dictated from above, their sense of responsibility and engagement can diminish. This directly affects how successfully you create engagement in the workplace.

Give employees appropriate scope to make decisions, share ideas and influence how work is carried out.

Trust needs to be combined with clear goals and responsibilities, and depends on you as a leader setting an example. Read more about how to build trust as a leader.

8. Act before an employee resigns

The exit interview is valuable, but by then it is often already too late.

Have regular conversations even with people who seem happy at work.

For example, ask:

• What is working well right now?
• What could work better?
• What makes you want to stay here?
• Is anything frustrating you?
• What would you like to develop going forward?
• Is there anything you need from me as a leader that you are not getting?

Conversations like these can help the organisation identify problems long before anyone hands in their notice.

What does high employee turnover cost?

When an employee leaves, the consequences go beyond the cost of recruiting a replacement.

The organisation can also be affected by:

• Lost expertise
• Time spent recruiting
• Onboarding new employees
• Lower productivity during training
• Increased workloads for remaining staff
• Lost customer relationships
• Reduced continuity

This makes retaining the right people a strategic issue, not just an HR issue.

Should you try to retain every employee?

No.

Low employee turnover is not automatically a goal in itself.

Sometimes it is right for people to move on. An organisation changes, and the needs of both the business and the individual can evolve.

The focus should therefore be on avoiding unnecessary and unwanted employee turnover, especially when valuable employees leave because of problems the organisation could have influenced.

Common mistakes

Only increasing pay

Pay can be an important factor, but it does not automatically solve problems with leadership, culture, workload or development opportunities.

Only starting to act when someone resigns

Efforts to retain employees need to be ongoing.

Treating every employee the same

Different people value different things.

Ignoring poor leadership

If employee turnover is particularly high in a specific team, the organisation needs to be willing to investigate why.

Collecting feedback without acting on it

If employees repeatedly raise the same problems without anything changing, trust can decline further.

Summary

At its core, reducing employee turnover is about creating a workplace where people have the right conditions to succeed and develop.

Good leadership, clear communication, development opportunities, reasonable workloads, appreciation and a strong company culture can all contribute.

But start by understanding your own organisation.

Find out why people leave—and, above all, what makes the best employees want to stay.

Frequently asked questions

What is a normal employee turnover rate?

There is no single level that is optimal for every organisation. Employee turnover varies across industries, roles and labour markets. What matters most is tracking trends over time and understanding why people leave.

How can you reduce employee turnover?

Organisations can work on areas including better leadership, development opportunities, regular feedback, sustainable workloads, employee involvement and a strong company culture.

Why is high employee turnover a problem?

High employee turnover can mean lost expertise, increased recruitment costs, heavier workloads for remaining employees and reduced continuity.

How do you encourage good employees to stay?

Try to understand what employees value and create the right conditions for development, responsibility, appreciation, trust and a sustainable working life.

Is low employee turnover always good?

No. Some employee turnover is natural and can be positive. The primary goal should be to reduce unwanted employee turnover where valuable employees leave for reasons the organisation could have influenced.