TURNOVER INVISIBLE COSTS

Incredible turnover rates that?Terus has noticed in companies where we perform turnarounds. There must be a clear relationship between crisis and turnover!

High turnover rates?indicate a lack of engagement, mismatched growth plans with the required competencies, aggressive and non-constructive resource allocation and communication, and absence of alignment in pathways. The financial and intangible costs are high!

Very low turnover rates?in crisis-ridden companies signal lethargy, lack of a solid and clear growth plan for the company, absence of goals, excessive conformity. This leads talented individuals to leave in search of growth, leaving behind employees without ambition – they are present but unproductive. They won't be let go due to unproductivity and often remain in the company for 10, 15, 20 years in the same position, role, using the same methods and routines, and nobody fires them!

The financial and intangible costs are very high!

Reasonable turnover rates?appear more positive: they indicate balance, forward movement, progress, teams with knowledge, expertise, clear growth plans, and ample engaging ambition. The less qualified ones leave. The better-prepared, more engaged, and visionary ones stay, and after a while, they are promoted or seek other opportunities, making room for the highly competent individuals from the teams below.

The success with which a company hires, integrates, manages, and rewards its personnel is crucial for success.

In companies that engage Terus for turnaround, corporate governance, and strategic and tactical projects, we have adopted certain success premises, such as:

1. Comparing their turnover rates?with national benchmarks and industry-specific standards;
2. Holding managers accountable for maintaining open lines of communication with their subordinates.?They actively manage their career development programs and analyze total compensation metrics in the context of the cost of replacing top employees;
3. Assessing voluntary turnover, where employees resign by choice.?Generally, they perceive themselves as more capable of occupying higher positions with career progression, escaping toxic managers, and taking roles in companies that offer better pay and benefits. They are more daring (we like that at Terus);
4. Assessing involuntary turnover, where employees are fired?or part of a seasonal layoff or workforce reduction;
5. Turnover rates should be viewed in context, as certain sectors, such as hospitality and retail, traditionally exhibit higher-than-average employee turnover. A company can and should evaluate its turnover rate against similar businesses in its sector to gauge how well it is retaining talent;
6. Saving company money! Creating and adopting actions to prevent turnover rates.

For an entrepreneur, a C-level or a board of director’s member, the only certainty is the uncertainty in the business landscape.

Taking advantage for growth and profitability.

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