Employee turnover vs employee retention?

First thing to note is that both terms are totally different conceptually. While retention entails an organization or management function to keep employees at work for long, turnover is rather an employee desire to quit working in an organization. In terms of relationship, wide range of research has been conducted and result shows that an inverse relationship exist between both, such that as retention packages increases, employee desires to quit (turnover) reduces (Yisa, 2024; Ubana, Arikpo and Bassey, 2022; Ndemaki, 2014). The same is reflective on turnover as independent variable, which reveals an organization poor ability to retain its workers.

Linda Mbonambi

Employee Turnover:Definition: Employee turnover refers to the rate at which employees leave an organization within a certain period, typically measured annually. It includes both voluntary departures (resignations) and involuntary departures (terminations). Measurement: Turnover rate is calculated by dividing the number of employees who leave by the average number of employees during the period and multiplying by 100 to get a percentage. Implications: High turnover can indicate issues such as poor job satisfaction, inadequate compensation, lack of career development opportunities, or a negative organizational culture. It can lead to increased recruitment and training costs, loss of organizational knowledge, and potential disruptions in service or productivity.

Employee Retention:Definition: Employee retention is the ability of an organization to keep its employees over time, minimizing the number of departures. Measurement: Retention rate is calculated by dividing the number of employees who remain in the organization by the total number of employees at the start of the period, multiplied by 100 to get a percentage. Implications: High retention typically indicates positive aspects such as job satisfaction, effective management, good compensation and benefits, opportunities for career advancement, and a positive organizational culture. It can lead to lower hiring and training costs, increased employee morale, and higher levels of productivity and engagement.

Correlation Between Turnover and Retention

While employee turnover and retention are inversely related, addressing turnover does not necessarily correlate directly to high employee retention due to several factors:

Turnover Types:Voluntary vs. Involuntary: Reducing involuntary turnover (e.g., layoffs) does not automatically improve voluntary retention. Addressing voluntary turnover by understanding why employees leave (exit interviews, surveys) is crucial for improving retention.

Retention Strategies:Comprehensive Approach: High retention requires a holistic approach, including competitive compensation, career development, work-life balance, employee engagement, and a positive workplace culture. Merely reducing turnover without addressing these factors may not lead to sustained high retention.

Quality vs. Quantity:Retention of Top Talent: High retention rates are beneficial only if they involve retaining top talent. Retaining underperforming employees might improve retention metrics but harm overall organizational performance.

Employee Engagement:Engagement Levels: Employee engagement plays a crucial role in retention. Engaged employees are more likely to stay, even if turnover rates fluctuate due to external factors (e.g., economic conditions).

Hope this will answer your question

Rizgar Ali Dolpamuee

Research and References:

For further reading and research on employee turnover and retention, you can refer to academic journals, books, and reputable websites that specialize in organizational behavior, human resources, and management studies. Here are some suggested sources:

Academic Journals: Journals like Journal of Applied Psychology, Human Resource Management, and Journal of Organizational Behavior often publish studies on turnover and retention.

Books: Look for books by renowned authors in the field of HR and organizational behavior, such as those by Peter Cappelli, David Guest, or Jeffrey Pfeffer.

Websites: Websites like SHRM (Society for Human Resource Management), HR Magazine, or Harvard Business Review often feature articles and research summaries related to turnover and retention.

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