The cost of a high turnover

Having a high turnover is great! Why wouldn’t you want lots of money coming into your business?

Well, this blog will not be focusing on turnover in the sense of business revenue, but instead, we will be considering the consequences of high employee turnover, which in most instances is not so good.

We previously looked at the importance of talent acquisition and retention in small businesses. Given just how important this is for startups and small businesses, we will look further into the consequences of high staff turnover and the impact it can have on the growth of a business.

What is (employee) turnover?

Turnover in an employment context is the process of replacing an existing employee with a new one. In a business context, the employee turnover rate is commonly calculated as the percentage of employees who leave the business during a specific period of time.

This is a simple concept which can have a massive impact on the success and growth rate of a business.

The causes of high turnover

A person can leave a business for any number of reasons. The impact of that person’s departure depends on their value and worth to your business. Keeping actively involved in the running of your business will help you identify where the talent exists, and will help you understand the cause of employee departures so you can take steps to retain the best talent within your business.

Unfortunately sometimes a departure will be outside of your control, however, in most instances there is plenty a business can do to retain those who are most important to it.

Pay and other benefits

Pay (or a lack of), is likely one of the greatest motivators for an employee to start looking for new work. Whilst it is often difficult for startups and small businesses to compete with some of their more established counterparts, there’s still plenty you can do to retain your most talented employees. Consider other ways you can reward them. Good bonuses, shares in the business, flexible working, and a good work-life balance can all help to keep your team engaged with the business.


Failing to engage your employees is a sure way to see them leave for greener pastures. Motivated employees like to be engaged with the long term plans of the business. They welcome challenge, being listened to, and the opportunity to learn and develop new skills. These simple opportunities will ensure your best employees remain invested in the long term growth of your small business.

The list does goes on, but recognising the causes of high employee turnover is a simple step towards ensuring your business practices are aligned with what motivates your team.

The cost and consequences

High staff turnover can cost businesses a significant amount of time, money and resources. Finding and training new staff is no easy feat, unless you have dedicated a significant amount of time building the perfect employee training program.

You may have also experienced, or have been a part of a business which has suffered from a high employee turnover. The knock-on effect just one departure can have on the morale and attitudes of the remaining workforce can be severe, particularly where the departure has been a result of the action or inaction of the business. The pressure it can place on others having to pick up the slack can often result in others wanting to move on, and before you know it – your business has just taken an even bigger hit.

From personal experience, one of the most detrimental consequences of high employee turnover is the impact it can have on new, and even more importantly, existing customers. People often work with businesses as a result of one or more individuals within it. Rarely is it the case that it’s the inanimate business a customer is attracted to. It’s more likely a good accounts manager, a pro-active member of the support team, or the trustworthy sales rep who has never let you down. A notable loss of talent will likely result in a loss of customers, and that all important business revenue you spend your time trying to maximise.

The upshot

Once you identify the reasons for a high employee turnover, it’s relatively easy to implement practices to ensure you retain the best talent in your business. Keep an eye on competitor pay, and implement methods to reward those employees most valuable to you. Keeping your team engaged in their role and the business generally will ensure that they remain as motivated as you to make a success of their position and the business itself.

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