9 Strategies to Manage Employee Turnover

Did you know that losing an employee costs companies around two times more than their salary if they were working? Also, when employees leave at a steady or alarming pace, it disrupts both workflow and productivity. 

The US Bureau of Labor Statistics reports that by the end of 2024, the total annual separations hit around 5.3 million. Out of which voluntary exits amounted to a little under 3.2 million. 3.2 million is still more than 50% of the total US employee turnover and strategies to manage them are needed. 

Here, you will learn about employee turnover, differentiate it from attrition, explore the most common reasons for employees leaving, and effective strategies to retain top talents. 

What is employee turnover?

Employee turnover refers to the number of employees who leave an organization during a specified period. It could be annual, quarterly, or monthly. On the one hand, we have an employee leaving voluntarily. And then there are situations when the management releases an employee or group of employees. 

When an employee leaves a company at will, it is a voluntary turnover. They may resign due to better offers or retire if they hit their retirement age. They can also relocate and leave the present organization. 

The other side of the coin is involuntary turnover, where employees are let go by the company. It could be due to termination, layoff, discharge, or even redundancy of a role. When a position or role is no longer deemed necessary or valuable, the employer might eliminate the job, releasing the employee or employees assigned to the role (or a project).

Attrition vs Turnover

Often, attrition is interchangeably used with turnover. However, there is a subtle difference. 

When an employee leaves a company for any reason and the vacant position isn’t replaced for a long time or ever, it is called employee attrition. It usually results in a drop in the overall number of an organization’s or department’s workforce since vacancies are not renewed as people leave.

So, we can see that employee attrition refers to long-term vacancies or position eliminations, unlike employee turnovers.  The attrition rate measures employee attrition.

For instance, during the pandemic times (early 2020), I was working at a real-estate firm’s HR department. The HR team was asked by the employer to lay off around 30 employees of their advertising wing and dissolve the wing, till further notice. This resulted in eliminating multiple positions that were never refilled. 

Reasons for voluntary employee turnover

If you release employees via termination, layoff, or discharge, it is usually a strategic move. As mentioned above, it could be due to poor performance, redundancy of roles, the employer’s inability to pay the employees further, or their physical incapacity to work. 

However, what do you do when over 85% of employees want to leave their current roles? In such cases, you need to find out the reasons for voluntary employee turnover. 

Poor work-life balance

If employees feel their work life is taking a toll on their personal lives, more often than not, they will quit. In a recent survey by Elvtr magazine, 68% of Americans work on vacations. ‘

In fact, Randstad reports that 73% of employees consider work-life balance a core factor when choosing a job.

So, it is an important stimulant behind employees leaving, if compromised. 

Toxic company culture

Employees value how their bosses, managers, and team members are more than what they are getting.  A recent study shows that 57% of employees have left their jobs because they are frustrated with their manager or company leadership.

If an employee feels threatened, unsafe, or undervalued, they will leave the company. That is because they do not see long-term potential with their current employer. 

Lack of career development

One of the reasons I left one of my previous employers was the lack of enough opportunities to learn and grow. I felt I was doing the same stuff over and over again, for the majority of my tenure. 

In fact, a 2022 survey by the Pew Research Center found that 63% of employees quit their jobs due to a lack of career growth.

This factor is important primarily because employees might feel undervalued if they are not given the right amount of career development scope. When workers perceive limited pathways for progression, feel their roles do not match their evolving skills, or sense that their professional vision conflicts with the company’s mission, they are more inclined to look elsewhere

Unsatisfactory pay packages

Employees will leave if you don’t offer the right packages. People nowadays keep their eyes and ears open to all sorts of market trends and pay. Thus, workers know how much rival firms or other employers in the industry are paying their employees. And, they also have their own needs and evaluation of their worth. 

So, if you don’t reward them with the right pay, they can jump ship.  

Regular extra hours of work

A survey by FlexJobs revealed one of the most common reasons people want to leave their jobs is burnout. 

Now HR professionals might claim that what if we pay for overtime? Well, that is not always going to solve the problem, because people will lose productivity and fail to concentrate if made to work more than they can. 

Eventually, employees will lose their morale and confidence, wanting to get out of the workplace as soon as possible. 

Relocation

Relocation is often an unavoidable cause of employee turnover. Whether triggered by family commitments, personal desires for a new environment, or mandatory shifts in office location, moving can disrupt employees’ work-life balance and lead them to seek roles closer to their new homes. 

As per Work Institute Retention Report 2024, relocation accounted for nearly 9% of voluntary resignations from 2019-2023 in the US. 

The situation gets worse when there are no scopes for remote work. 

Strategies to Manage Employee Turnover

Hire the right talent

A mind-boggling data I found from a Harvard Business Review study is that 80% of employee turnover is due to bad hiring decisions! 

Finding employees who align with both the job requirements and the company culture is important for reducing turnover. Recruiters need to ensure that they are looking for the right talent pool from the start.

As an HR person, you can improve your hiring processes by letting senior or experienced peers have a say in the recruiting decisions. Employers should also spend time getting to know the candidate using whatever means necessary. 

In my previous job, I was asked to visit a potential hire at his current workplace, as a customer, to see how the candidate interacts and responds with co-workers around. As the role was for a customer relations manager, the way the candidate talks and responds to customers in front of other peers and tackles difficult situations was essential to selecting him for the role. 

Recognize performance

Employees who feel recognized and appreciated for their work extend more loyalty to an employer than others. A Deloitte study in 2024 indicated that organizations with a culture of continuous recognition are 31% less likely to lose employees voluntarily. Likewise, Gallup points out that workers who do not receive proper recognition are two times more likely to quit the following year. 

Handing over awards like “Emerging Talent of the Year” or “Star Performer of the Quarter” encourages employees, gives them a sense of success, and helps them feel appreciated for their efforts. 

Recognition can also promote productivity and commitment to the firm, resulting in higher retention. Sometimes even a simple pat on the shoulder goes a long way in retaining a motivated employee

Provide upskilling and career growth opportunities

LinkedIn 2025 Workplace Learning Report found that “Organizations that prioritize career development outpace others on key indicators of business success.”  LinkedIn analyzed survey responses to determine where firms fall on a career development maturity curve, with the most mature being designated as “career development champions.”

They found the following results from their survey:

So, you can note that supporting employees’ career development boosts both morale and retention. Whether you are arranging training sessions or assigning mentors, career development initiatives are a win-win for all. 

Develop the right company culture

A strong company culture ensures the retention of employees. A well-known 2019 Glassdoor survey asked 5,000 workers from the United States, United Kingdom, France, and Germany on this matter. The survey found that 77% of respondents analyzed the potential employer’s culture even before applying.

HR Manager, upon consultation with the management, must create workplace cultures that foster unity and acceptance among all team members. Their ethos should be set straight and conveyed through various channels for potential hires to see. 

With the current workforce of young professionals who can leave at just one instance of negativity, strategies to retain them through a solid company culture are vital. 

Ensure transparency and open communication

Employees feel more engaged when they’re consistently informed about company strategies. Also, when recruiting, you must be clear about the organization’s culture from the onset. The recruiter should communicate how the company operates rather than what the candidate wants to hear.

Open communication and transparency are proven to increase trust and reduce employee anxiety. Unclear role expectations cause workplace stress. Nearly 70% of employees prefer working for organizations with a strong purpose and corporate which is clearly communicated to them, as HBR reported in 2021. 

You can have a transparent dashboard through tools like Trello or Slack that clarifies both individual and team objectives, keeping everyone aligned on the company’s broader mission. You can also set and convey clear goals each quarter through OKRs or KPIs, ensuring employees understand their contributions.

Promote a Healthy Work-Life Balance

A key strategy to hold on to the employees is ensuring they get a healthy work-life balance. Employees receiving the support of the HR team in managing a healthy work-life balance stay much longer with the company. 

You can set working hours according to the majority of the employees’ suggestions. Then you can require them to complete their tasks within the timeframe and leave office once done. This will help the employer keep the daily operational tasks rolling and let employees take care of personal matters outside of office hours. 

Offering the right personal and professional work time management also saves employees from burnout and frustrations. 

Set up employee engagement activities

In its recent 2024 State of Global Workplace Report, Gallup has found that engaged business teams drive positive outcomes within organizations. Also, low engagement costs the global economy around US$8.9 trillion, or 9% of global GDP.

Notably, engagement fosters teamwork and loyalty, directly decreasing employee turnover rates. You can try engagement tactics like the following to help retain employees:

• Tours outside the office with colleagues and mentors
• Interactive workshops and discussion sessions where employees’ voices are heard
• Early morning motivational emails to charge up their minds
• Gamified learning through online games based on your business 
• Outdoor or indoor game activities that refresh everyone’s dispositions. 

You can also try something like HubSpot’s “HubTalks” featuring thought leaders, creating an environment of continuous learning that has landed the company on multiple “Best Places to Work” lists.

Standardize performance reviews

Unproductive or inconsistent performance assessments are another indicator of turnover. Yearly or biannual performance assessments with static targets cause more harm than good. 

I’ve seen employees feel attacked when advised to improve in certain areas of their work. They end up looking for new jobs and leave the organization when they get a new one. 

For instance, I was once asked by my HR manager to sit with a junior officer and discuss the areas where he needs more improvement. One of the issues with his performance was he never gave updates on his work progress and ended up submitting each work after deadlines. 

He tried to defend his position by claiming an overload of tasks. He then submitted his resignation after a few days, when the HR Manager and his HoD tried to explain that the workload was adequate and that e had to pick up his pace and give more work updates.  

The best approach is to make the performance review a dynamic, cooperative, and ongoing procedure that tries to strengthen the bond between a manager and employee rather than creating barriers. 

One thing HR managers can do is use HR software for performance reviews as a process that helps managers and employees set goals together, gives them a chance to evaluate their progress, and rewards good work. 

Managers can effortlessly adjust goals in real-time by linking them to actionable measures and evaluating them through performance management dashboards. And employees can let them know the progress through the software. 

Offer competitive salary & benefits packages

Compensation remains a key consideration for managing employee turnover. You should try to pay your employees at par with market pay grades if not more. Your salary structure should be equivalent to your skills and knowledge. 

Although most firms are required by law to provide health insurance, workers’ compensation, and family and medical leave, optional fringe benefits and bonuses can be important differentiators that help businesses hold on to the top performers. 

In fact, according to MetLife’s 2023 U.S. Employee Benefit Trends Study, more than 60% of employees believe benefits make them feel more valued and loyal to their companies. 

Good benefits options could be:

• Retirement plans
• Paid Time Off (PTO)
• Childcare subsidies
• Travel Allowances 
• Gym memberships
• Tuition reimbursement, etc. 

Using HR Software to Manage Employee Turnover

Specialized HR software can significantly reduce turnover by allowing data-driven decisions, faster processes, and offering predictive insights into employee behavior. Many modern platforms like Workday, SAP SuccessFactors, OracleHCM, and BambooHR, come equipped with analytics dashboards that help HR professionals track key metrics.

The metrics can be absenteeism, performance ratings, and engagement scores. All of which can indicate potential employee turnover.

For instance, an employee becoming disengaged on a regular basis indicates he is losing interest in his role. It could well be that he is no longer feeling aligned with the company’s goals. So poor engagement scores can depict a possibility of them leaving the organization. 

Similarly, if an employee consistently performs poorly, they may be losing the dedication toward the company and can submit resignation anytime. This becomes more apparent when addressing poor performance does not effectuate any improvement. 

These tools also facilitate smoother onboarding, performance reviews, and career development planning. These critical elements align employee aspirations with organizational goals. 

By adopting a centralized, real-time approach to workforce data, HR teams can proactively identify problem areas, intervene with targeted retention strategies, and ultimately foster a more stable and engaged workforce.

FAQ

Summing Up

Effectively managing employee turnover needs a multi-faceted approach. Organizations must tackle the root causes of voluntary turnover, be it poor hiring practices, lack of recognition, or inadequate career development opportunities. 

Ensuring a healthy work-life balance, nurturing an inclusive and transparent culture, and standardizing performance reviews all play key roles in retaining human resources. HR software can offer real-time insights, too, helping HR teams spot high-risk scenarios early and implement targeted solutions. 

Give these employee retention strategies a try and see how they help sustain your business and company.