High turnover rate: should you apply or run for the hills?

Jun 07, 2022

5 mins

High turnover rate: should you apply or run for the hills?
Lauren Dunmore

Content specialist passionate about storytelling

Imagine joining a company with a shockingly high turnover rate early in your career. Perhaps you were wooed by promises of the fantastic culture, great work-life balance, and rapid professional development. But the company has a dark secret that slips under your radar until later in your tenure: people tend to leave - quickly. Ideally, you would have inquired about employee retention before joining the company, but you were new to the working world and didn’t ask enough questions. So you watch in shock as a tide of resignations rock the company. First 10, then 15, and then 20 people depart at the same time.

But, you stick around. Why? Because you love working there. The culture is fantastic, you achieve a healthy work-life balance, and you’re learning a lot. It turns out that employees were leaving the company because there was a low supply of people in your field and high demand. The turnover is also addressed extensively by the company who also works together with employees to get to the root of the problem and sweeten the compensation package. And it works: people stop leaving in droves.

Of course, this isn’t true of all organizations with an employee retention problem. High turnover is defined as a significant number of employees leaving an organization. It can be indicative of a bad culture, poor leadership, a stressful work environment, or a paltry remuneration package, among other things. So what do you do if you’re interviewing at a company with significant turnover? Should you head for the hills, or suck it up and stick it out?

How to identify high turnover

According to the U.S Bureau of Labor Statistics, in 2021, the average employee turnover rate was about 57.3% across all industries. However, this number drops by almost 60% when you look at voluntary turnover. A good turnover rate is about 10%, which is an impressive 90% employee retention rate.

However, as most companies don’t advertise turnover rates on their websites, you’ll probably need to do a little digging to get an idea of what this number might look like where you’re applying. Here’s what you can do to figure it out.

Do your research

There is a plethora of information about companies online. So, do your research. Read the Glassdoor and Indeed reviews, check out the website and social media pages, and Google every variation of the company’s name. If it’s a large company, you’ll likely find enough information to get a sense of the culture and why people generally move on to greener pastures. Smaller companies and young startups can be a bit trickier to find information on, but you might be able to find TED talks, speaking engagements, or interviews with current employees to give you a sense of what it would be like to work there.

Ask the right questions during the interview

An interview is probably the best time to understand a company’s habits. Sure, everyone will be on their best behavior, but if you ask the right questions, you can learn a lot. Ask things like, “Is this a new position or a replacement? Why did my predecessor decide to leave? How would you describe the company culture? How do you keep employees engaged? Why have you stayed at the company this long?” You might not get exactly what you want from these questions, but pay attention to how they’re answered. This will already tell you a lot about the company culture and allow you to identify any potential red flags when it comes to retention.

Reach out to former employees

While you might not get the full story from current employees, former employees have less to lose and are more likely to tell you the truth. Ask them why they left, what they think of leadership at the company, what the work-life balance was like, and if they’d recommend the company to a friend. Assure them that anything they share is confidential and if you turn down the job, don’t cite them as the reason for it.

Trust your gut

If you feel negative about a job offer, or you have an overwhelming sense of foreboding when you think about joining the team, then trust your gut and don’t take the job. Logic should of course play a part in your decision-making process, but don’t underestimate the power of intuition. It’s possible that your subconscious picked up on something and you should listen to it. Plus, numerous studies have shown that trusting your gut can help you make more accurate decisions.

When to disregard high turnover

A high turnover rate isn’t always a red flag and can be overlooked in some cases. While your initial thoughts may be “this is obviously not a good place to work if so many people are leaving,” their poor retention rate could be explained by other, less threatening factors. Alas, all is not lost! Here are some specific scenarios in which you could pardon high turnover.

There are a lot of temporary employees

If the company you’re working for tends to hire a lot of freelancers, interns, or temporary employees, then don’t let the high turnover scare you. This is typical of younger companies that might not have the resources to hire as many permanent employees. As the company grows and its budgets gain stability, there will usually be an increase in permanent hires and a subsequent shrinking of the turnover rate.

The company went through a significant change

Think restructuring, mergers and acquisitions, culture transformation, a pandemic. All of these things can change the way people feel about a company or force them to move on. Maybe Joe Bloggs used to be a great fit at his company, but a major transformation left him feeling less aligned with the values of the organization - that doesn’t mean that you’ll feel the same. Figure out what this change means for the company - and more importantly, you - before letting that high turnover rate scare you.

It’s Google

Tech giants like Google, Apple, and Amazon might offer employees sky-high salaries and an impressive list of perks, but they also struggle to hold on to talent. Employees spend, on average, less than two years at these companies. Why? Because they can. Tech talent, in particular, is highly sought after. Due to a low supply and high demand, workers have the luxury of job-hopping whenever they please. So if you get a job at Google and it feels like the right next move, don’t let the high turnover deter you. If anything, it speaks to how marketable you’ll be with a tech giant on your résumé.

It’s your dream job

Even if the Glassdoor reviews are terrible and the office smells like old gym socks, it might still be the right career move for you. If you love the company, felt a strong connection to your team and future manager, and believe that it will help you take the next meaningful step in your career, then take the job. Not everyone will have the same experience at a company. For all you know, the high turnover rate might only affect the sales team whereas the marketing team has a great culture and retention rate. Especially in the case of large companies, sometimes culture varies by team and manager. So ask the right questions, make connections with people at the company, and listen to your gut.

At the end of the day, it’s up to you to make the best decision for your career. Maybe that means toughing it out at a company with a less than stellar culture or maybe it means waiting for that perfect opportunity to come knocking. You know yourself the best, so make the right decision based on what you want, not just a series of numbers or some bad online reviews.

Photo: Welcome to the Jungle

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