Employee Recognition Proven to Reduce Turnover


When a company has a high employee turnover rate, it’s usually a sure sign of major problems within the entire organization. The turnover rate is defined as the rate at which employers need to replace their employees. Through the years, the employee turnover rate has continued to rise. In 2013, the average turnover rate for all industries was 15.1%. By 2017, that number had increased to 18.5%.

Some industries have much higher turnover rates than others. For example, while the employee turnover rate for federal government positions is only 1.3%, the rate is 352% for the staffing industry. Other industries with high employee turnover rates include fast food, which has a 100% turnover rate and the retail industry, which is at 59%.

High employee turnover rates can cause a lot of problems for organizations. When a company loses an employee, not only do they lose all the money invested in hiring them, they must also spend money to rehire another person for that position. High level employees can be especially costly to replace. The cost of replacing a highly specialized employee is about 400% of their annual salary. Besides losing money, high employee turnover rates often cause a loss of productivity and continuity. High turnover rates can also have a negative effect on the overall morale of the entire company.

For these reasons, it’s important for organizations to understand the reasons for their employee turnover rate and find ways to reduce it. Some of the most common causes of high employee turnover rates include:

  • Employees are unable to advance their careers
  • There is a disconnect between the employees and the managers
  • Managers don’t value feedback from their employees

One more cause of high turnover rates is that employees don’t feel valued in general. It has been proven that when employers take the time and opportunity to recognize their employees, it causes employees to be more satisfied in their job. This is especially true when employee recognition programs are well-organized and consistent. It also helps that every employee has a fair share of receiving such recognition.

There are many ways employers can go about recognizing their employees. Some of them include placing plaques on the wall with the names of recognized employees, writing their employees a simple thank-you note, or taking their employees out to lunch. It’s also effective for employers to recognize whole teams when certain goals or metrics are met.

Hosting holiday parties, offering praise to employees for a job well done, and even recognizing personal achievements can all help to boost morale within the entire organization, which in turn will lead to lower employee turnover rates. Offering rewards, including bonuses and cash incentives, will also go a long way to reduce employee turnover rates.


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