A Business Leaders Guide to Reducing Employee Turnover
Leadership Development

A Business Leaders Guide to Reducing Employee Turnover

Bonnie Hagemann • October 05 , 2022

Understanding Employee Turnover for Your Business

Now more than ever, employee turnover has become a challenging obstacle in all types of business settings. Employees are continuing to leave organizations at rapid rates, leaving behind an unprecedented number of job openings with very few people desiring to fill those roles. Therefore, understanding employee turnover and how it impacts on your organization will be critical to the success and future of your business. 

In the month of July 2022, the US Bureau of Labor Statistics reported a rate of 5.9 million employee separations detailed in their latest Job Openings and Labor Turnover Summary. These employee separations included but were not limited to layoffs, discharges, quits, and involuntary turnover. With employee turnover statistics being higher now than when they were pre-pandemic, your business must take action to gain insight into employee turnover, what this looks like in your business, and how your business and its leaders can reduce turnover and improve your employee retention.

What is Employee Turnover?

Employee turnover is essentially when employees leave your organization and no longer continue working for your business. Employees leave their workplaces for a wide range of reasons, so it is imperative that your business brings awareness to turnover and what leads employees to their ultimate decision of leaving your business.   

It is important to note employee turnover should be expected within your business. However, high employee turnover rates can be detrimental to the growth and future of your organization. Due to the potential risk of higher employee turnover, organizations should continue to monitor their employee turnover rates. All areas of a business such as departments, demographics, positions, and job settings also face the potential risk of employee turnover issues, which can lead to possible long-term issues for the organization and its staffing, goals, and success. Some industries can see higher turnover rates than others (e.g., hotels, retail), but all businesses and leaders should learn to keep this on their radar.  

There are 2 main types of employee turnovers: 

  1. Voluntary Employee Turnover – Voluntary turnover is when employees independently make the decision on their own to leave your organization. This form of turnover typically consists of resignations, job changes or transfers, and retirements. It is vital to understand the employees’ reasoning and what drove their final decision to voluntarily leave your business. Gaining this information will help you to better understand your turnover rate and how your business and its leaders can act to prevent too much of it.
  2.  Involuntary Employee Turnover – Involuntary turnover is when employees are released from their role and job duties by the organization. This usually results in an employee being laid off or fired from the organization. These reasons could be beyond your control as a leader. But it is important that leaders work to ensure involuntary turnover is infrequent due to the impact it can have on your business and the well-being of your employees. 

Understanding employee turnover and these two main types can help guide your business to reduce turnover and increase employee retention. Whether it is enhancing your leadership, reshaping your culture, or making necessary internal changes to the strategies of your business, these changes will take time, teamwork, and wise decision-making skills by all levels of your organization’s leadership. Hiring and retaining top talent is now more challenging than ever but gaining awareness of turnover can help drive the actions needed for the future success of your business by retaining the best talent in your workplace. 

Potential Obstacles Leading to Turnover

As you may know, there is a range of factors that can impact an employee and their overall workplace experience. Today, leaders must gain deeper insight into employee reasoning and what leads employees to decide to leave, as well as determine their personal impact relating to these reasons. Leaders must strive to guide and support employees effectively to reduce the risk of turnover through their leadership and developing a compelling culture. Doing so will enable leaders to create an environment that will reduce high turnover rate challenges for your business.   

There will always be turnover within an organization. Often, people leave their job for reasons outside the control of a company’s leadership. Some of those reasons include changes in a partner’s job status or location; changes in family responsibilities; retirement; or changes in personal interests.   

Companies do have a great deal of control over some of the negative reasons employees leave their job. 

The following are a few common examples of negative employee turnover obstacles. 

  • Poor Leadership and Workplace Culture – In the words of our CEO Bonnie Hagemann, “To lead with vision, leaders must display courage, provide clarity, shape and enhance the culture, and energize and connect with people at all levels, both inside and outside the company.” Poor leadership and workplace culture are one of the leading reasons employees will leave the workplace. This can result in higher employee turnover rates for your business. 
  • Lack of Opportunity for Growth and Career Development – When an employee experiences a lack of growth and career development opportunities at their organization, there can be issues with employee motivation and productivity, as well as employee turnover issues. If an employee is not encouraged, inspired, and invested in by their organization and its leaders, they will likely not perform at their best or desire to continue their employment in this workplace atmosphere. Employees desire to advance, enhance their skill sets, and be challenged and valued in their day-to-day duties and role. If your employees do not feel this way, there is the risk of an employee moving on to a different opportunity.  
  • Lack of or Minimal Workplace Flexibility – Employees Want Better Work-Life Balance. Work-life balance promotes employee health and well-being, as well as create more flexibility in both employees’ work and home life. Work-life balance can look like flexibility in work hours, remote or hybrid options, and allowing employees to grow individually and personally outside of the company. When an organization lacks work-life balance opportunities, its employees do not feel as valued. Employees can also experience burnout due to a lack of work-life balance. Lack of work-life balance can lead to turnover if an organization and its leaders do not engage in a healthy, dynamic, flexible, and employee-first business culture.  
  • Benefits and Compensation – Employees desire to make an honest and fair living where they feel valued in terms of their time and efforts relating to compensation. Well-compensated employees will be more engaged and productive. Especially in today’s job market, employees who do not believe their compensation is fair and in line with the current labor market will be dissatisfied and likely leave for other opportunities.   

Understanding employee turnover, what it can look like in your business, and the importance of maintaining a healthy turnover rate will be critical to the success of your business and both your current and future employees. Organizations should strive to gain awareness and insights into their employees to learn their desires and needs within the workplace, as well as their individual needs and goals. Enhancing your organization’s leadership by creating a compassionate and employee-centered business approach can be valuable in reducing turnover and can lead to increased employee retention.  


It is important that leaders: 

  1. Understand the reasons for employee turnover 
  2. Take action to make the necessary changes needed to maintain a good culture and workplace for their employees 
  3. Be able to hire and retain new top talent.  

Employee turnover rate can be tricky to navigate and understand with its numerous factors, and at EDA, we are here to help.  

Here at EDA, we utilize a results-driven and practical approach to addressing your business needs. With industry-leading experts and our high-level and dynamic service offerings, EDA is here to guide and support your organization through these challenging times and obstacles in the workplace. Employee turnover will continue to be a critical factor in all business settings and we at EDA are here to help bring the awareness and effective change needed to reduce turnover in your business. EDA provides a range of programs including executive development, leadership development, and high-potential development, as well as specific programs for healthcare, government, or universities. Check out more about EDA services and how we can help your business and its leaders to reduce employee turnover and increase employee retention: https://bit.ly/3C89QYD 

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