In societies based on consumerism, maintaining low employee turnover rates is key in long-term business growth. The United States, being the focus of this paper, best exemplifies the need for low turnover rates in a consumer-based economy. It best reveals the need for low turnover rates because of the significant financial losses businesses acquire when they cannot retain qualified employees. Reasons for losing employees can be extensive, however companies should be focused on retaining employees in order to maximize business growth potential. Business goals can be drastically impacted, especially profit-based goals. Employers and their workplace environments should accommodate and provide incentive that will acquire and obtain the best employees in that specific field. Companies should equip their human resources department with incentives in order to increase the quality of applicant, which in turn will increase overall employee quality. Considering the financial impact a high turnover rate can have, it is pertinent HR departments are utilizing their resources to retain employees. In this paper, I will thoroughly present why maintaining a low turnover rate is pertinent to a business' success.
Retention rate represents the percentage of employees who have stayed at a job for a full year. Since most companies experience some type of loss within their staff, whether that is a resignation or a firing, the number of losses is compared to retained employees. Employers and organizations as a whole, measure their turnover rate during a fiscal year. A turnover rate is the number of employees that leave during that fiscal year (Ball & Colvin, 2011). These rates serve as important ratios for HR departments because they reveal many key qualities about companies and their workplace environments. These ratios can reveal why employees choose to jump ship or remain at a job. They also serve as references when employers are looking to decrease their turnover rate.