By Pam Verhoff

When you’re a small business owner or entrepreneur, nothing is more valuable than good employees. Hiring and retaining a qualified team is critical because each person typically has to take on several roles. Without the abundant resources of your larger competitors, service has to be your key differentiator. When even a single position is filled by someone who is not the best fit or doesn’t live up to expectations, the damage can be significant. This is why it’s so important to be aware of the factors that lead to a high rate of employee turnover. 

All businesses lose personnel on occasion. Many times, there’s nothing you can do about it. An employee may find a better opportunity elsewhere or decide to change careers. In many cases, however, turnover is the result of personality clashes, mismanagement, poor hiring practices, and other avoidable circumstances. When you consider how harmful this can be to your operations, it becomes clear why you should do everything you can to prevent. 

Why Turnover Hurts

The most obvious way excessive turnover impacts your workplace is by losing experienced and effective employees. Each resignation results in a knowledge gap — and it takes time and resources to train a replacement and wait for him or her to get up to speed. Being shorthanded, even temporarily, can have a significant impact on customer service and other operations. The last thing you want is for clients to lose patience with your business. 

Even if you’re able to maintain productivity during periods of high turnover, being short-staffed may wreak havoc on your internal culture. A constant exodus of talent can affect the morale of those who stay. They may become anxious, distracted, or demoralized. The resulting atmosphere is probably not the most conducive for peak performance. What’s worse, you may develop a reputation as a workplace that has difficulty retaining people. This can have a negative impact on your ability to attract new talent or the freelancers you need to fill in the gaps. 

That’s saying nothing about the general chaos and stress that a revolving door can create. You already have enough on your plate as a small business owner without the increased distraction and anxiety caused by constantly scrambling to fill an open position. 

What You Can Do About It

Now that you know why high turnover is so treacherous, it’s time to consider your options for fighting it. Perhaps the most important step you can take right away is to improve your hiring practices. When you focus up front on making sure a candidate is the best fit for the position and the culture, you increase your odds of success. If you have the ability to do so, outsourcing your recruitment processes to a third-party firm could be the answer to this problem. 

Another way to inoculate your workplace against a constantly churning staff is to focus on your corporate identity. Give yourself and your employees a clear idea of your internal values and goals. You may be surprised at how much morale improves when everyone understands and feels connected to the organization. It’s also a good idea to concentrate on building better engagement with your personnel. Create a mentoring initiative, establish an open-door policy, or start an incentive program. 

Managing a start-up or small company means keeping a lot of balls in the air at one time. However, don’t ignore or downplay the situation if you have a high number of team members walking out the door. For more information on tackling turnover, take a look at the accompanying infographic. 


Author bio: Pam Verhoff is President of Advanced RPO, a talent acquisition company in Chicago, IL. Verhoff has extensive experience in building RPO businesses and solutions, as well as developing growth strategy.