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5 Tips to Reduce Employee Turnover in Your Company
Safira Adnin
September 10, 2024

Employee turnover is a common challenge for many businesses, and managing it is crucial to maintaining a productive and stable work environment. High turnover rates, whether due to resignations, retirements, or other reasons, often lead to significant costs. These costs include recruitment expenses, onboarding, and training new hires, which can be quite expensive.

Reducing turnover means minimizing these costs and ensuring that your business retains its talent. This is particularly important when employees voluntarily resign, as it can disrupt team dynamics and lower morale. In this article, we’ll break down key insights into understanding employee turnover and offer five practical tips to reduce it.

What is Employee Turnover Rate?

Turnover rate refers to the percentage of employees who leave a company within a specific time period. This could be measured over a month, a quarter, or even a year, though monthly turnover is most commonly used in calculations.

The financial services industry, for example, has experienced high turnover for years, with around 4 out of 5 executives reporting increased employee exits. Factors like more flexible job opportunities and better career prospects elsewhere contribute to this trend.

Monitoring turnover rate is a critical responsibility for HR teams. Beyond cost concerns, understanding employee turnover can help identify patterns, reasons for departures, and strategies to reduce it.

Formula to Calculate Employee Turnover Rate

Calculating employee turnover is fairly simple. According to SHRM, the basic formula for monthly turnover is:

Turnover Rate = (Number of Employees Who Left / Average Number of Employees) × 100

To use this formula, you first need to know your total employee count. But should you include only full-time staff, or also consider contract and outsourced workers?

A good rule of thumb is to use your company’s payroll data to determine the total number of employees on your payroll. Outsourced workers who aren’t on your payroll shouldn’t be included.

Next, you’ll need to calculate the average number of employees, which can be done by summing your employee count over a certain number of reports (monthly, for example) and dividing by the number of reports.

For example, if you calculate the employee count three times in a month, and the counts are 151, 143, and 148, the formula would be:

(151 + 143 + 148) / 3 = 147.33

Once you know the number of employees who left in that period, the turnover rate can be easily calculated using the formula.


5 Tips to Lower Employee Turnover

If your turnover rate is higher than expected, don’t worry! There are several steps you can take to improve employee retention. Here are five proven strategies, inspired by Forbes, to help reduce turnover and keep your top talent engaged.

1. Hire the Right Candidates from the Start

An old saying goes, “Prevention is better than cure,” and this rings true for reducing employee turnover. The key to lowering turnover begins during the recruitment process.

While most companies focus on hiring candidates with the right skills, it’s equally important to ensure they’re a cultural fit for your organization. Often, high turnover stems from a mismatch between an employee’s personality and the company’s work culture.

One way to avoid this is by asking behavioral interview questions that assess how candidates would handle specific scenarios at work. Additionally, give potential hires a glimpse into your company’s culture during the interview process, so they know what to expect.

2. Offer Competitive Salaries and Benefits

Compensation plays a huge role in employee satisfaction. If your company isn’t offering competitive salaries and benefits, your employees may be tempted to leave for better-paying opportunities elsewhere.

In Indonesia, for example, companies should at least meet the local minimum wage (UMR) and provide basic health and employment benefits, such as BPJS coverage. Beyond the basics, offering additional perks like transportation allowances or meal stipends can make a significant difference in employee satisfaction.

To ensure your salaries are competitive, conduct local salary research to understand what other companies in your industry are offering. This will help you position your compensation packages in a way that attracts and retains top talent.

3. Show Appreciation for Employees

Everyone wants to feel valued for their hard work. Recognizing employees for their achievements can go a long way in building a positive work environment.

When employees meet or exceed targets, or successfully complete a large project, show your appreciation publicly. A simple acknowledgment during a team meeting or a shoutout in a company newsletter can make employees feel seen and appreciated.

While it’s important not to overdo it for routine tasks, offering recognition when it’s truly deserved helps create a positive and motivating workplace. Employees who feel appreciated are more likely to stay committed to the company, reducing the likelihood of turnover.

4. Provide Clear Career Development Opportunities

When employees feel their careers are stagnant, they often lose motivation and start looking for new opportunities. Providing clear career development paths is essential for keeping employees engaged and invested in their future with your company.

Employees generally want to improve their skills and advance to higher positions. A company that offers structured career development opportunities, such as coaching, training, or leadership programs, can retain employees for the long term.

As an employer or HR professional, you can also support employees by providing access to paid training programs or external workshops that help them develop new skills and grow within their roles.

5. Implement Flexible Work Arrangements When Possible

In today’s workplace, flexibility is highly valued, especially by millennials and younger generations. Offering flexible work hours or remote work options can help employees achieve a better work-life balance, reducing burnout and increasing job satisfaction.

While flexible work arrangements aren’t feasible for every industry, it’s worth considering for roles where it’s possible. Allowing employees to manage their schedules or work from home a few days a week can reduce turnover by fostering a more balanced and accommodating work environment.


Reducing employee turnover is a challenge, but by taking these steps, you can create a workplace where employees feel valued, motivated, and committed to the long-term success of the company. Remember, the key to lowering turnover starts with creating a strong, positive company culture and ensuring that you hire candidates who align with your values. By following these tips, your business will be well on its way to retaining top talent and building a stable, productive workforce.

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Glints TalentHub is our complete talent solution that covers all aspects of talent acquisition, management, and development. Our team can help you access the extensive talent pool across Southeast Asia and build great teams quickly and affordably. Simply schedule a call with us and our dedicated experts will be thrilled to guide you in your journey towards building a borderless team.


This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.

Glints TalentHub offers an end-to-end, tech-enabled talent solution that encompasses talent acquisition, EOR, and talent development. We empower businesses to leverage the strengths of regional talent efficiently to build high-performing, cost-efficient teams.

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