How to Reduce Employee Turnover (and Why It Should Be a Priority)
One of the highest priorities in your business should be minimizing employee turnover. In case you aren’t familiar, employee turnover refers to the percentage of employees who leave an organization, ultimately being replaced by new hires.
Some turnover is necessary and expected; there isn’t much you can do about it. But many organizations suffer from a high employee turnover that compromises their efficiency. With the right strategies, you can address turnover problems proactively and help your organization reach its full potential.
Why Employee Turnover Is Such a High Priority
Let’s start by explaining why employee turnover should be such a pressing issue.
For starters, employee turnover is expensive. Whenever your company loses an employee and needs to replace them, it will suffer a number of costs. You’ll need to close out the previous employee’s tenure with an exit interview and various types of paperwork. You’ll need to create a job ad, engage your recruiters, screen candidates, review resumes, conduct interviews, and then eventually onboard the new employee. Things aren’t over with onboarding, either – you’ll likely suffer from lost efficiency and productivity as you handover the employee, train them, and get them up to speed.
Depending on the nature of the employee you lost and some variables related to internal efficiency, this can ultimately cost you tens of thousands of dollars (if not more) for each employee lost.
Additionally, employee turnover can reflect poorly on your organization as a whole and contribute to internal cultural problems. If your organization has high turnover, it can make employees feel like the company is unstable or volatile – and cause them to question the value of their workplace.
In some ways, employee turnover is a diagnostic tool; high employee turnover can mean there’s something else wrong with the way you’re running things. With poor conditions and limited prospects, it’s no wonder why employees would leave.
How to Reduce Employee Turnover
Fortunately, there are several steps you can take to reduce employee turnover in your organization:
Find the right fits.
Everything starts with your hiring process. If you find candidates who fit the culture, are passionate about their work, and are willing to work hard, you’ll have a much better chance of retaining those employees long-term. Conversely, if you hire people who never feel like the belong in the culture, they’re inevitably going to leave.
Use the right software.
Effective equipment management software and similar tools can increase productivity, improve morale, and reduce friction in the average employee’s day. Make the investment to ensure your workers have the best possible experience.
Recognize and reward accomplishments.
It’s not just about money. It’s also about recognition. If an employee does something exemplary, they deserve to be recognized and rewarded for it. Go out of your way to celebrate the major achievements accomplished by your team members; not only will it make them feel better about working for your organization, it will also encourage other employees to aspire to do the same.
Provide flexibility when possible.
Flexible workplace environments tend to have lower turnover rates than their strict, inflexible counterparts. Give your employees more freedoms and more autonomy, such as allowing them to work flexible hours or giving them extra days off.
Engaged employees are happier, more productive, and less likely to leave your organization – a win all-around. The question is, how do you make employees more engaged? You can start by giving them appropriate responsibilities and challenges. Don’t be surprised if you have to make adjustments over time.
Keep salaries and benefits competitive.
About 25 percent of people who leave their jobs leave primarily for higher pay somewhere else. Therefore, it’s in your best interest to keep your salaries and benefits offerings competitive. Periodically grant your employees raises to keep in line with modern trends – and pay attention to what your competitors are currently offering people in similar roles.
Give employees opportunities to grow.
Most employees want opportunities to grow. They want to get to higher positions, learn new skills, gain new responsibilities, and make more money. If you give them a roadmap to achieving these improvements, they’ll be more likely to stick with you indefinitely.
Encourage and act on feedback.
Take the time to gather employee feedback, whether it’s in annual reviews or periodically throughout the normal workday. When employees speak out against certain policies or certain problems within the organization, take their criticism seriously – and fix whatever you can.
Learn from exit interviews.
When employees leave, take their exit interviews seriously. This is an opportunity for employees to truly speak their minds and explain why they’re leaving. With the right mindset, you can learn a lot from these engagements and apply those lessons to your entire organizational model.
These strategies can get you started with reducing employee turnover, but you’ll need to remain consistent and adaptable as you keep those rates low. Be sure to listen to your employees and respond to their needs as much as possible.