Leadership Retreats Resources

How To Manage Employee Turnover

How To Manage Employee Turnover

November 15, 2022
Lead Teams
Jesse Parrish

I was sitting in my small-town barber shop engaging in casual banter with the end-of-shift crowd, waiting to get a haircut before heading home. The topic of conversation: what is it like working at your job? Here are a few of the comments made: 

  • Yeah, as soon as they hire you, they are looking for ways to fire you.” Railroad and logistics company employee
  • I just started at this new place last month; I couldn’t stand the last one. They couldn’t keep anyone there. All my buddies left.” Electrician for a regional company
  • We can’t keep anyone! I’m short-staffed constantly and working overtime every week.” – Local restaurant manager
  • It takes so long for us to hire someone. Meanwhile, I’m doing my job and covering for this open position.” – Manufacturing company employee
  • Yeah, last week I hired a new cook. Halfway through their first shift they quit and walked out.” – Local restaurant owner
  • It seems to be that way for everyone right now. Everybody’s leaving and going somewhere else.” – Barber shop owner

The tone and message of the conversation was clear. Losing staff, being short-staffed, and the effort to find new staff were taking a toll on each person and industry represented in that conversation. While the issue of employee turnover will never be solved (0% turnover) it is an important issue to be managed for any team or organization.  

Turnover rate (the rate at which employees leave an organization and are replaced during a given time) and retention rate (an annual rate dividing the number of employees with one year or more of service by the number of staff in those positions one year ago) are two important metrics tied to your teams people strategy, employee engagement, and cultural health.

How To Manage Employee Turnover

The Cost of Employee Turnover

The U.S Bureau of Labor Statistics indicated 2019 and 2021 turnover rates across industries were between 45-47.2% (2020 saw a spike to nearly 58%!)

Higher turnover rates and lower retention rates directly affect the monetary bottom line and an organization’s productivity and performance!

The Society for Human Resource Management (SHRM) estimates that employers will spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement. You can see a breakdown below of where some of these costs originate.


Cost of Vacant Position Cost to Fill Position Cost to Get to 100% Productive
Increased staffing costs to cover lost work Cost of hiring manager’s time Cost of new hire’s salary & benefits
Reduced productivity and/or quality of work Recruitment and advertising costs Cost of training manager’s time
Increased costs of errors or reduced customer satisfaction Cost of screening and interview time Cost of reduced productivity for new hire
Exit interview and/or separation costs Continued cost of vacant position Cost of new materials (ex. training resources)


All this adds up to a conservative estimate of over ONE TRILLION-dollars of negative impact on the U.S. economy!

How To Manage Employee Turnover

Three Leadership Tips on Healthy Turnover

Bringing it back to you, the leadership of your team and organization. What can you do to navigate a healthy relationship with healthy turnover? 

1. Understand that turnover can be healthy and good. It can be a sign of people within an organization growing and pursuing new opportunities. New hires can bring fresh perspectives and skills that stimulate a healthy and vitalized culture. Explore the U.S. Bureau of Labor and Statistics breakdown of turnover by industry and see what is “normal” in your industry. Establish a healthy perspective for retention and turnover. For example, WinShape Teams is in the Educational Services industry, which had 25.5% in 2021. We established a target of 12% or less annual turnover and a KPI for our organization.   

2. Onboard your people well. In The Power of Moments, author and researcher Chip Heath describes the power onboarding has in creating a sense of purpose and belonging for employees. Good onboarding directly correlates to strong cultures and healthy turnover rates. WinShape Teams currently breaks down onboarding into three categories: Organization, department, and team/role onboarding.

3. Create and implement a people strategy. What are you doing to regularly invest in your people? This can range from vacation policy to performance management process, individual development plans to career pathing. Three broad areas to consider:

  • Invest in the head. What opportunities are available for people to gain knowledge and grow mentally? 
  • Invest in the heart. What is being done to foster people’s dreams/hopes and to create purposeful belonging? 
  • Invest in the hands. What is available for people to gain mastery of their role and enhance their skills? 
How To Manage Employee Turnover

Get Started Today

Here are a few small wins that can get you started: 

1. Identify your team or organization’s turnover rate in the past year and compare that to industry averages.

2. Make day 1 memorable and meaningful for each new employee. Save the HR videos for day 2!

3. Explore with your current directs what they are growing in, what skills will help them in their role, how you can coach/train them, and what they aspire to (both professionally and personally).

Even these small changes can affect the bottom line of turnover, improve employee engagement, and promote a more positive culture within your team or organization. 

How To Manage Employee Turnover

Improve employee engagement with the help of a coach.

To enhance your own leadership development journey and explore how you can take actionable steps to improve your teams engagement, work with a WinShape Teams Coach. Our certified coaches can help you identify targeted areas of growth and come alongside you in developing a tailored action plan that will set you and your team on a path toward more focused success.