Every business, regardless of scale, has to deal with employee turnover. Even the most successful businesses face employee turnover at some point, as staff come and go regularly. Because finding and training a replacement requires time and money, it is to your company’s benefit if you try to limit employee turnover.
Employee turnover has a huge impact on any company’s trajectory, and you’re not alone if you’re having difficulties with it. Staff turnover is a problem that even the most experienced businesses face. The majority of business owners and corporate leaders do not pay attention to employee turnover until it becomes a costly issue. This is, of course, a counterproductive strategy.
As the economy continues to slowly recover from the pandemic, a greater proportion of employees may look for better opportunities in other companies moving forward.
Why are employees leaving?
As per the Bureau of Labor Statistics, three out of five persons who leave their job are actually quitting as opposed to getting fired or laid off. More often than not, people leave their jobs not because they found a new or better opportunity in another company but because they are unhappy in their current position.
Employees will struggle to be effective, productive workers who take pride in their jobs if they are not constantly provided the attention and resources they require to prosper in their profession. As such, they may grow dissatisfied and frustrated, which leads to giving up and departing.
The average annual turnover rate, according to a LinkedIn survey, is around 11%. Add in employees who would have changed jobs during the pandemic but didn’t because they were afraid of losing their jobs, as well as employees who seek more flexibility than their current employers can offer. All of this sums up quite a lot.
How much is the cost of high employee turnover?
Employee turnover is costly. Some costs, such as the expenses related to finding and onboarding a replacement, can be quantified in money. These costs are estimated in a variety of ways.
According to research; replacing a paid employee costs six to nine months of that person’s yearly salary. Other studies suggest those figures could be substantially higher, especially for high-wage jobs.
Other economic costs associated with turnover may include missed clients and revenue, as well as overtime expenditures for other employees who do extra work until a replacement is found.
Here are numerous other indirect costs your organisation should prepare for when someone quits.
- More workload
- Reduced employee morale
- Less engagement
- Rise in absenteeism
- Risk for burnout
- Decreased productivity
- Possible loss of institutional knowledge
That said, effectively managing turnover and enhancing staff retention may save you a significant amount of money.
8 Efficient Ways Your Business Can Manage High Turnover
Here are suggestions for slowing down your company’s revolving door. The goal is to motivate your finest staff to stay with you for the long haul.
1. Analyse the turnover
Changing something you can’t measure can be challenging — that’s why it’s crucial to collect data carefully, keeping in mind that not all turnover is created equal and that how you evaluate employee turnover matters. People leave their jobs for different reasons, so it’s not wise to generalise the reasons for employee turnover.
When employees leave, you must assess your knowledge of the reasons for their resignation. Keep in mind that you could also gather qualitative data through engagement surveys and other methods.
You can seek employees’ inputs openly or use tools that assist organisations in gathering feedback anonymously. You could even search Glassdoor for common sentiments of employees regarding workplace culture and see if they somehow mirror what goes on in your organisation.
2. Find and hire the right fit
Hiring the right staff is the first step in retaining employees. Employees with exceptional talents that fit your open position are likely to get hired.
But, how well do your staff fit into your company culture? While having the necessary work qualifications is important, that is only one aspect of what makes someone an asset to your company.
Matching a candidate’s values, objectives, and goals with that of your company is also vital. For instance, if you require someone who can take on more duties, a candidate seeking training and professional development could be ideal.
When an individual’s strengths and interests suit their job and the company’s overall needs, mutual success and satisfaction happen more naturally. Such employees are more likely to be engaged, productive, and less inclined to hunt for another job. Finding a good fit may take a little longer, but it’s one of the most important things you can do for your employees’ long-term happiness as well as your own.
Use smart onboarding
Getting your new hires off to a good start will help them stick around. A well-thought-out onboarding process ensures that a new employee has a positive first impression of your organisation. But it takes more than just making a strong first impression to help them succeed.
It requires a personalised onboarding approach tailored to the needs, job, and performance goals of the employee. In a nutshell, you should assist them to grow and flourish over their initial weeks and months at your organisation.
4. Employ recognition strategies
It’s our nature to want to do things for which we will be rewarded and recognised. Rewards and recognition demonstrate to your employees what your firm values in their behaviour and assist them in achieving success, resulting in increased job satisfaction and loyalty.
Employees who feel valued and appreciated are more likely to stay with you in the long run. As such, meaningful employee appreciation initiatives should be a top focus in your entire employee retention strategy.
5. Offer competitive compensation and benefits
Everyone seeks to be compensated fairly. Most of us pay for necessities such as housing, utilities, and food. Most people also desire enough money to spend on frills. If you don’t pay your staff well, they’ll go work for someone who does.
It’s a good idea to conduct wage market research when determining compensation packages for your personnel. Find out how much your competitors are paying their employees and implement a salary range that is at par with those holding similar jobs.
6. Showcase the career path
Employees who remain stagnant at work may look for another position if there is very limited opportunity for them to improve their skills and knowledge. Presenting a projected career path to employees provides them with a sense of direction and purpose.
By outlining a clear career path for your staff, they’ll know how they can advance from their current position. It could be an upward or lateral movement. Alternatively, your staff can gain additional responsibility in their present role. Whatever it is, make it clear to your employees how you can help them achieve professional development.
7. Allow flexible working hours
Nowadays, employees want a flexible work setup where there is harmony in their personal and professional lives. Work-life balance has a direct impact on retention. As more and more businesses are becoming aware of this, failing to provide employees with flexibility in terms of work hours and location may compel them to quickly search for work elsewhere.
Allow for flexible work schedules if at all possible — let your staff pursue interests outside of work, attend appointments, and care for their families. If you need them to be at your business at specific times, you can still offer other forms of flexibility, such as offsetting schedules.
8. Cultivate camaraderie
Building good rapport and strong relationships with the people who work for you can serve as an incredible employee retention factor. Begin by developing a culture of mutual respect and an environment that fosters friendships.
Additionally, you must ensure that each team member feels a sense of psychological safety, knowing that their ideas will be acknowledged, thoughtfully examined, and never ridiculed.
High turnover is a problem in so many businesses, but it doesn’t have to be in yours. Any of these strategies have the potential to boost employee retention and keep you ahead of the game.
One of the most effective methods to improve your team’s work experience is to reinforce the value that their contributions provide to your organisation. Spread cheer and happiness regularly. Implementing peer-to-peer recognition is also effective.
It’s one thing to claim you’re committed to developing a solid corporate culture or that your staff are your most valuable asset, but do you really mean it? You don’t have to succeed in every endeavour, but you do have to show your efforts. Aim for constant progress in making your company a great place to work.