Staff Turnover and Movement on Positions (I)
What is the healthy employee turnover rate? How can movement on positions be a motivator for employees?
Posted: Sep 2010
The Employee Turnover is the change that occurs in every organization. People come and go. The rate of employee turnover is expressed as number of employees that leave versus total number of employees during one year. This rate is expressed as percentage number. The turnover of staff can not be understood simply as positive neither as negative fact.
If the turnover of employees is occurring at a high rate, say 10% or more present, than this can be negative fact, since every vacant position requires a new employee. The learning curve of new employees affects the productivity of the position and the company. In some extreme cases a large number of employees can leave, which can be a significant problem to company's performance.
In case that staff turnover is at the low rate or is zero that can be the negative fact too. The employees that spend too much time at the same positions ( 10 years or more ) do not show enthusiasm and willingness to develop the same way as new employee.
If the whole organization does not change on the long run, than the culture resistant to change is developed.
The optimum employee turnover is something that gives the balance between fresh and enthusiastic employees and experience and maturity. The optimum staff turnover is not something that is easy to be defined, since it depends on the organization character. Still, the healthy turnover rate for FMCG company can be the turnover of 0,5% on annual level.
The turnover is not the only fact that makes the change in the employee structure. The source of motivation is the movement on positions. The shift of position can be the source of motivation for employee.
Promotion is the strong motivator for employee. Promotion is the vertical movement of employee from one grade to another. The fact of promotion is the event that motivates the employee toward professional development and higher performance. The promotion is not only motivator due to higher position and increased compensation package, but the fact of recognition and trust as well.
Lateral movement is horizontal switch of position. Since there is no possibility to promote everybody to higher position, the lateral movement is an option too. When employee moves to different position of the same rank he/she changes his role and responsibility. This change can be motivator for further development and new motivation after years spent on previous position.
Employee turnover and movement on positions are change factors that create motivation and development drive for the individual employees but for the whole organization as well.