What is early turnover?

• Early turnover: definition
• How is the early turnover rate calculated
• How can companies reduce early turnover?

Early turnover: definition

As a rule, we talk about early fluctuation when employees give notice and leave the company relatively shortly after they have been hired. In this case, the termination usually takes place on the employee’s side.

The period of early turnover is not exactly defined. However, this period often means from the time the contract is signed until the probationary period is completed.

So, by definition, early turnover occurs when the termination of employment happens within a few days, weeks, or months of onboarding a company. This happens more often than one might initially think:

According to the Haufe Onboarding Study 2021, a full 36% of respondents terminated their employment relationship even before the first official day of work at the company. Another 15% were already thinking about terminating their employment relationship on their first day of work.

It’s fitting, then, that early fluctuation – or the early turnover rate – is an important recruiting metric that can provide employers with important insights.

Why is early turnover interesting?

A certain amount of employee turnover in companies is quite natural. Sometimes, colleagues retire or decide to make changes that may require laying down their jobs or changing employers.

These can be sabbaticals, upskilling (e.g. a degree), reskilling, a move, or even starting a family or a business. However, these changes usually take place only after a longer period of cooperation between the company and the employee.

The situation is somewhat different, however, in the case of early turnover. New joiners leaving so early needs to be understood as a clear warning sign.

If newly hired employees leave the company frequently or regularly shortly after joining, this indicates a lack of satisfaction. But it can also mean that the wrong decision was made when the employee was hired.

It is particularly important to note, however, that such premature departures can be very burdensome for companies, especially financially:

If new hires leave right away, the hiring process starts all over again and – depending on qualifications – causes high cost of vacancy and cost per hire, and the new training also costs a lot of money.

Keeping an eye on early turnover and regularly monitoring it can help to identify such trends at an early stage and take effective countermeasures.

We explain below what these measures can look like!

Reasons for early turnover

The reasons for early turnover can vary from candidate to candidate. They can be caused by:

• The hiring process
• The onboarding process
• The company culture

It is not always easy to identify where exactly the problem lies. However, there are some reasons that are particularly frequent and can be pointed out.

For example, a misleading job advertisement or misleading communication with the candidate could create false ideas or expectations of the job or the company during the hiring process. This misleading can result in candidates quitting more frequently.

It is also common for onboarding to drive new employees away because it is scheduled for too short or too long – or even worse – without any structure or preparation at all.

But the company culture itself can also cause new employees to leave early. For example, through a lack of diversity, equity, and inclusion in the team, a lack of appreciation, or tensions between the new team members.

Last but not least, the prevailing uncertainty of the current labour market is probably also a driver of early turnover. Read more about this in our blog article on 7 tips for hiring in times of uncertainty.

How is the early turnover rate calculated?

The early turnover rate expresses as a percentage how high the proportion of employees who leave early is in relation to the total number of newly hired employees. To determine it, we need a small but powerful calculation formula.

But don’t worry, the formula for early turnover is not complicated:

Of course, it should also be mentioned that both values should refer to a specific period of time (such as a quarter or a half year) in order to be truly meaningful. This is the only way to make meaningful comparisons.

Case and calculation example

Let’s take another look at the formula for early turnover in a brief case study and calculation example. Let’s assume that a company has hired 15 employees within half a year. 

At the end of their respective probationary periods, only 9 of these new employees are still with the company, meaning a total of 6 people have left prematurely.

The following result is used in the formula:

According to this result, more than one-third of new hires were dissatisfied with the working conditions, the onboarding process, or the company itself. A clear signal that something urgently needs to be changed in order to retain the talent they have acquired.

How can companies reduce early turnover?

This brings us to the question of how to reduce early turnover. There are some simple but effective measures here, which we will briefly present.

• Ask for feedback:
  As mentioned above, the reasons for early turnover vary widely. The easiest way to find out the exact cause is probably to ask directly. This allows problem areas to be identified and remedied more quickly and accurately.
• Establish a recruiting communication strategy:
  Communication with candidates is a major driver of early turnover. Too often, misunderstandings arise that can be easily avoided with the help of a consistent strategy for your recruiting communications.
• Optimize job advertisements:
  Improved communication should be accompanied by better or more precise job advertisements.
  The company and its values, as well as the requirements and daily tasks, should be presented transparently and unambiguously to not create false expectations or impressions.
  You can read everything you need to know about this in our guide about how to write a good job advert.
• Offer an attractive career page:
  Since job ads should be as brief as possible, it is also advisable to provide a meaningful, attractive career page.
  This rounds out the information offered by introducing employer branding and thus helps talents get a better picture of the company and its work culture. Read more in our blog article on creating career pages.
• Improve onboarding:
  Once the employment contract is signed, the onboarding phase begins. And it shouldn’t start on the first day of work!
  After all, it sets the course for how much new team members will feel like they belong and how competently they will fill their new positions. But most importantly, how loyal they will be to a company in the long run (employee retention).
  The earlier and more impressively new team members are brought on board, the better! Find out what to consider in our blog article “The art of employee onboarding”.

• Use relevant job boards:
  The problem isn’t always onboarding or company culture. Sometimes the pool of applicants includes people who don’t match the target audience you’re looking for. This can happen when companies search on the wrong job boards.
  Modern talent attraction software such as JOIN can help to target the talent that is being sought. With JOIN, recruiting teams receive individual suggestions as to which platforms are best for publishing a job ad.
  Both free job boards and low-cost offers for niche job boards are available.

More on employee retention and fluctuation.

Want to learn more about how to reduce early turnover and increase employee retention? Then these articles are just what you need:

• Interview best practices
  During the interview process, it’s easy to create false impressions that later lead to early turnover. This article shows how you can effectively prevent this problem.
• Build stronger remote cultures
  Remote work will continue to be with us post-pandemic, so onboarding needs to be made remote-friendly as well. However, this first requires a good remote working culture. Here’s how to build it.
• Great resignation: how to retain great talent
  The dynamics of the job market have changed massively during the COVID-19 pandemic and hiring seems to have a new way of working. This article reveals how you can still retain top talent.

For more interesting articles on onboarding and employee retention, check out our Recruiting & HR blog.