High employee turnover represents a considerable economic and organisational challenge for companies, which is associated with massive recruitment costs, lengthy onboarding phases, loss of expertise and significant productivity losses. Analysing the underlying causes and understanding the driving factors are essential prerequisites for being able to take proactive countermeasures. This can strengthen employee loyalty and ensure the stability of the personnel structure. This article explains in detail how an effective reduction in staff turnover can be achieved by conducting in-depth root cause analyses and presenting evidence-based solutions.

"Long-term employee retention begins with a deep understanding of their needs. Only those who ask the right questions and show a willingness to continuously improve can establish sustainable employee loyalty." - Ilka Zeiner, Managing Director of indivHR

What is meant by fluctuation?

Staff turnover refers to the continuous change in personnel within an organisation caused by voluntary or involuntary departures. This dynamic not only leads to quantitative fluctuations in the number of employees, but also poses challenges in terms of maintaining organisational stability, process reliability and efficiency. Staff turnover can be caused by a variety of factors, which can vary depending on the industry, company size and specific site conditions.

Calculation of the fluctuation rate

The staff turnover rate is a key figure for measuring staff turnover in a company. It is calculated by dividing the number of employee departures by the average number of employees in the company and multiplying the result by 100. A turnover rate in the range of 8-12 per cent is generally regarded as "healthy", while significantly higher values often indicate systemic deficits that are associated with both considerable disadvantages and additional costs. A high turnover rate can be an indicator of structural deficits in the corporate culture, management style or working conditions and should therefore be regarded as a critical warning signal.

Fluctuation in Germany and Austria

Experience shows that the labour market in Germany and Austria is highly dynamic: in many cases, up to 50 percent of jobs are filled within a year. The Stepstone Jobreport 2024 confirms this development: 44 per cent of employees surveyed are open to a change, with 5 per cent actively looking for a new job. These figures illustrate the considerable dynamics and the resulting challenges for companies in retaining qualified employees in the long term. The high fluctuation rate presents companies with the task of positioning themselves as attractive employers in order to minimise the costs incurred by constant changes and stabilise staffing levels.

Types of employee turnover

In business practice, a distinction is made between three different types of employee turnover, each of which requires specific challenges and options for action:

• Natural fluctuationThis form includes all staff departures that occur without the active involvement of the employee or employer, for example due to retirement, fixed-term contracts or death. Such departures are often unavoidable. Companies can take preventative action here by building up successors in good time and organising a targeted transfer of knowledge in order to secure expertise.
• Internal company fluctuationEmployees change positions, departments or projects within the company. This type of fluctuation can be used as an opportunity for further development and strategic personnel planning, as internal knowledge is retained and talent can be developed in a targeted manner. Internal transfer also offers an opportunity to promote employee motivation and satisfaction.
• External fluctuationIn this type of fluctuation, the employee leaves the company due to termination or cancellation of contract by mutual agreement. This leads to a loss of valuable knowledge and additional costs associated with training new employees. This form of staff turnover can lead to significant disruptions in operational processes, especially if key personnel are affected.

Reasons and causes for fluctuation

The causes of employee turnover are complex and varied. They range from individual motivations to structural deficits within the organisation. In most cases, it is a combination of several influencing factors:

• High workloadExcessive stress, a lot of overtime and an unbalanced work-life balance are common reasons for changing jobs. Companies that fail to create a balance between work requirements and available resources risk a long-term exodus of qualified employees.
• Dissatisfaction with remunerationLack of salary increases, inadequate additional benefits or rigid salary structures contribute significantly to the willingness to change jobs. The feeling of a lack of appreciation due to insufficient financial recognition of work performance weakens loyalty to the company.
• Weak management cultureDeficits in leadership, in particular a lack of empathy, appreciation or communication deficits on the part of managers, can demotivate employees and increase staff turnover. A management style that is not employee-orientated often has a negative impact on loyalty.
• Lack of flexibilityThe lack of options for mobile working, rigid working hours or an inadequate workplace design have a negative impact on employee satisfaction. Especially in times when flexible working models are becoming increasingly important, it is essential to offer these options in order to be perceived as an attractive employer.
• Lack of career prospectsEmployees who see no opportunity for professional development often feel forced to leave the company. If prospects are lacking or not communicated, this creates the impression of professional stagnation, which increases the churn rate.
• Approach by other companiesEmployees who are already dissatisfied with their current situation are particularly susceptible to poaching attempts by competitors. This targeted approach by external companies increases the willingness to change jobs and poses a particular problem if the internal framework conditions are not competitive.

Consequences of high staff turnover for companies

A high fluctuation rate has far-reaching consequences for companies, which are not only felt at a financial level, but also affect the organisation as a whole:

• Cost-intensive recruitment processesThe constant search for qualified personnel is expensive and ties up internal resources. The costs include not only the actual recruitment, but also the administrative effort and the use of external service providers.
• Loss of expertiseLong-serving employees often possess company-specific knowledge that is irretrievably lost when they leave. This has a far-reaching impact on process reliability and innovative strength, particularly in key positions.
• Productivity lossesNew employees often require a considerable familiarisation period before they can work productively. These familiarisation phases cause temporary productivity losses and increase the pressure on the existing team.
• Demotivation of the remaining workforceA high staff turnover rate also has a negative impact on the remaining employees. The constant turnover of colleagues can lead to uncertainty and a deterioration in the working atmosphere. This creates an unstable working atmosphere in which employees wonder whether they too should leave the company.
• Negative impact on customer satisfactionIn industries where personal relationships with customers play a central role, the frequent change of contact persons can affect customer trust. Consistent support is essential in order to maintain long-term customer relationships.

5 strategies to reduce staff turnover in the company

1. Survey of employee needsRegular surveys to determine the needs and satisfaction of employees are essential in order to identify areas for action. The areas that could potentially lead to dissatisfaction should be specifically identified in order to initiate appropriate measures.
2. Use exit interviews to analyseThe structured evaluation of exit interviews provides valuable insights into the reasons for leaving. This information can be used to identify systemic weaknesses and make adjustments to improve employee retention.
3. Targeted measures for employee retentionEmployee loyalty can be strengthened through emotional, calculative and qualification-orientated measures. These include appreciation and recognition of performance, greater scope for action and further training and development programmes for professional development.
4. Increase in employee motivationFair remuneration, transparent communication and a positive working environment form the basis for employee motivation. In addition, team cohesion, individual support and the opportunity for further development are decisive factors that contribute to employee motivation in the long term.
5. Employer branding and positioning on the labour marketAn authentic and strong employer brand not only helps to attract new talent, but also contributes to the long-term retention of existing employees. Companies that communicate and live their values consistently can target employees who are in line with these values, which strengthens long-term loyalty.

Employee turnover is a complex challenge that has both individual and structural causes. With a sound, strategic approach and a clear focus on the needs of employees, staff turnover can be reduced in the long term. indivHR supports companies in identifying and recruiting the best IT talent and ensures that they stay on board in the long term through targeted consulting. Arrange a free initial consultation now to find tailor-made solutions for optimising your employee retention and to position your company optimally in the competition for the best specialists!