Turnovers can cost up to 37% of the employee’s annual salary. To solve this problem, businesses turn to HRIS to lower the turnover rate.

Your workforce is your most important investment as a business owner. The moment an employee becomes part of your company, you spend resources under the notion that it would yield a significant value for the business. This often leads to positive results, but when someone leaves the organization, the entire process is repeated. When multiple people leave at once, there is a need for additional expenses.

For years, HRIS has transformed how businesses address workplace challenges, especially in lowering the turnover rate. In fact, 494 companies of the Fortune 500 acknowledge the pivotal role of HRIS in the success of their business. Hence, the immense impact of HRIS makes it imperative for companies to integrate it into their business practices.

Why does it matter, and what value does it provide?

hris lower turnover rate hurey

What is Turnover?

hris lower turnover rate

Employee turnover refers to the departure of individuals from an organization. Also, this instance occurs through various methods, such as layoff, termination, retirement, illness, or health reasons, among others. Most of the time, employees who leave the company must have a replacement immediately.

If employers could not do this, the workflow would be disrupted. Additionally, there will be a dip in productivity. Also, there can be a strain on remaining employees who will pick up the work, leading to burnout and decreased morale. Hence, it is crucial to recognize the significant impact turnovers can have on an organization.

Meanwhile, the turnover rate is the overall percentage of employees leaving the organization that was replaced. This is calculated within a specific period, like monthly, quarterly, or yearly. 

To calculate the turnover rate, you must follow this formula:

Turnover rate =

number of terminations and resignations within a period
                                                                                                                         X 100
number of employees when the period started

Implementing an HRIS can help lower the turnover rate in your organization. Know how you can do this by reading the article!

  • Voluntary turnover: When an employee makes the personal decision to leave an organization. The reasons behind this departure can vary, ranging from receiving a different job offer to other personal circumstances.
  • Involuntary turnover: This is when the employer initiates the separation from the employee. This typically happens due to poor performance or unforeseen circumstances beyond the employee’s control.
  • Functional turnover: Refers to the departure of low-performing individuals within the company. These employees can be easily let go without causing significant disruption to the organization.
  • Dysfunctional turnover: Refers to the loss of employees who possess impressive skills and significant leadership potential.
  • Internal turnover: Happens when an employee departs from their current position to work in a different department at the same organization.

hris lower turnover rate hurey

Reasons Behind Employee Turnover

Implementing an HRIS can help lower the turnover rate in your organization. Know how you can do this by reading the article!

1. Poor HR Management

Foremost, ineffective HR resolutions have an immense impact on employee morale and satisfaction. Hence, it is crucial for workers to feel that the management hears their concerns and demands, and HR plays a critical role in achieving this. By ensuring that there is clear communication between both parties, HR can come up with a solution that will generate better results. Additionally, this approach fosters stronger working relationships between the management and the people.

Also, this enables HR to gather valuable feedback from employees easily. Moreover, a fully functioning HR department can shape employees into high-level performers. This not only allows the employees to be duly recognized and rewarded for their efforts, but also reduces their inclination to seek employment elsewhere.

2. Limited career development

Another major factor why people leave their jobs is because of the lack of opportunities. Employees frequently aspire to find avenues for growth and development within their organization. At some point, your workers will have the need to face greater challenges to hone their potential.

Thus, neglecting this aspect would convey a message that their skills and talents are being disregarded. Moreover, this could also make them feel that they are incompetent. Once they realize that there are limited or no chances for advancement, they may be inclined to explore alternative options.

3. Unjust performance reviews

Feedback is important for employees as it allows them to grow and improve. Consequently, performance reviews assist individuals in aligning their goals with the organization’s objectives. By actively taking part in evaluations, workers and managers gain valuable insights. Furthermore, this includes expectations and areas that require improvement.

However, there are times when reviews cause frustration. A 2019 study of American professionals found that unfair job reviews cause 85% of employees to consider quitting. Consequently, employees disengage from their job when given unjust perceptions instead of accurate and growth-oriented criticism. Sometimes, they even turn to resignation.

hris lower turnover rate hurey

Reasons Behind Employee Turnover

Implementing an HRIS can help lower the turnover rate in your organization.

1. Finding the Right Talent

The competition to hire the best person for the job is heated. Hence, in a market saturated with limited talent, companies are forced to make hiring quicker. Unfortunately, this approach often leads to poor recruitment practices, especially when the hired person cannot integrate well in the organization. In some cases, these employees cannot perform well in their position.

Thus, addressing this challenge requires a demanding and time-consuming effort. HR must consider a range of factors to ensure that the applicant fits the organization. Also, they must ensure that they can get the candidate with the right skills and knowledge for the job.

One solution is having an HRIS with a comprehensive talent recruitment tool. Additionally, companies can benefit from features that simplify the hiring process. Thus, enhancing your long-term success by finding the right talent.

2. Tracking Employee Performance

Another way that HRIS can lower turnover rate is by tracking the productivity of employees. Additionally, the system provides detailed reports showing their progress and KPIs. Hence, your people will have a better vision of what they need to work on.

Also, this would make goals more measurable, since you can create metrics based on your needs. The data generated by the system enables managers to become more objective in their evaluation, rather than providing reviews based on impressions.

3. Increasing Satisfaction and Engagement

Employee satisfaction and engagement are the keys to retaining talents. Consequently, a study noted that instead of having things done for them, workers favor self-service options. This includes managing their own benefits, leave requests, and overtime.

Thus, having an HRIS will lower the retention rate by allowing employees to gain access to a centralized platform that allows them to control their own data. This means that employees can review their information anytime. Additionally, they can even make requests without requiring HR intervention—just a simple approval from their direct supervisor. Hence, leveraging this can provide employees with a seamless and transparent process that will boost the employee experience.

4. Automating Payslips

The complex payroll framework of the Philippines often leads to pay disputes. However, with an HRIS, you would not have to worry about problems concerning this matter. Also, the system will automatically provide a timesheet with accurate calculations of the employees’ net pay. This includes factors affecting the employee’s pay as overtime, night differential, and even holiday rates. Additionally, the system will also deduct any government contributions needed, and even loans if you have any.

Furthermore, the built-in functionality minimizes the risk of errors while ensuring full compliance with legal regulations. Consequently, employees can ensure that their pay will be accurately calculated and disbursed on time. Thus, this reduces the need for them to seek alternative employment opportunities that guarantee satisfactory payroll services.

5. Analyzing Separation Trends

To make informed decisions, it is important to have data. However, you cannot breakdown numbers without sufficient information. An HRIS can help lower the turnover rate when it can provide historical data on employee separation to compare patterns. Moreover, some systems can distinguish the type of separations and categorize the employees for a more significant insight.

Thus, allowing HR professionals to recognize turnover trends and create an appropriate plan of action. Additionally, having sufficient information on turnover trends helps the management to modify retention strategies and improve the employee experience.

hris lower turnover rate hurey

Implementing an HRIS can help lower the turnover rate in your organization.

The Perfect HRIS to Lower Turnover Rate

Even with different advancements in HR processes, you cannot solve turnover problems without a comprehensive solution. More importantly, you need a holistic strategy to address other HR issues, including recruitment, reskilling, and appraisal, among others. Hence, it is important to implement an HRIS that prioritizes your company’s growth enables you to utilize the system to lower the turnover rate.

Hurey understands the importance of retaining employees in an organization. Our goal is to help you say goodbye to repeated and laborious HR tasks. Also, the system streamlines processes that will make HR’s work more efficient. Not only that, but you can easily scale Hurey to suit your needs—allowing you to focus on more important matters.

Furthermore, this HRIS will help you choose the perfect applicant for the organization and optimize the recruitment process—from onboarding to exit. Thus, Hurey guarantees a better employee experience, which lessens the probability of turnover.

What are you waiting for?

Take this chance to use an HRIS that will lower your turnover rate.

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