Understanding Staff Turnover

What is Staff Turnover?

Staff Turnover is a measure of employee tenure and the frequency of replacements, and its understanding is critical for any business.

Factors such as industry type, geographic location, job function, and broader social and economic conditions inherently influence a company’s natural turnover rate.

Turnover exceeding this baseline often signals preventable or unexpected losses, which are particularly costly in terms of both financial resources and organisational morale.

In the current economic landscape, where competitive pressures mount and talent is in short supply, CEOs are increasingly seeking insights into the turnover trends impacting their operations.

This heightened awareness is driven by the recognition of turnover’s significant costs, which are estimated to range from 100% to 300% of the replaced employee’s base salary.


These costs include:

  • the expenses associated with hiring and onboarding new staff.
  • lost productivity until new employees reach full efficiency.
  • diminished engagement from other employees witnessing high turnover.
  • errors and diminished customer service from newer, less experienced staff
  • the training investments and cultural impacts each departure creates.


Why should we be concerned about high turnover?

Elevated turnover rates offer a clear indicator that there are opportunities to enhance recruitment, onboarding, retention, and development processes.

Addressing these issues not only reduces turnover costs but also boosts performance and cultivates a stronger organisational culture.

To strategically reduce unwanted turnover, organisations must refine several key areas:

  • the Employee Value Proposition to attract and retain talent.
  • onboarding processes to ensure smooth integration of new hires.
  • performance management to maintain and increase employee productivity.
  • employee engagement to foster a committed workforce.
  • differentiated development and career paths to sustain employee growth and satisfaction.
  • By exploring these questions through the lens of the New Zealand Employment and Staff Turnover Survey, organisations can develop strategies to not only manage but capitalise on their human capital investments, ensuring sustainability and growth in an increasingly complex business environment.

    Find out more about the New Zealand Staff Turnover Survey