Growth means success. And employee retention is crucial for any company that wants to grow. Having a high turnover rate in your workforce can become more than just a nuisance.
Having to replace trained and skilled workers is not just time-consuming, but expensive as well. This article will go through a list of tips and hacks on how to reduce your employee turnover and maximize retention.
The cost of employee turnover
Turnover seems to vary by wage and the role of your employee. This study goes through some numbers about the real cost of turnover. Here are some examples:
- For low-paying jobs (earning under $30,000 a year), the cost of turnover is about 16% of the annual salary.
For example, the cost to replace a $10/hour retail employee would be $3.400.
- Mid-range employees ($30.000 to $50.000) cost more to replace, around 20% of yearly wages. For example, the cost to replace a $40k manager would be $8.000.
- The higher in the hierarchy, the higher the costs. For highly skilled jobs, replacing an employee can go up to 50% and even 100% of the yearly salary.
When you lose a valuable employee, the position needs to be filled somehow while looking for a replacement. You can either lower productivity or distribute the tasks to remaining employees.
You choose to pay them extra or suffer reduced morale because of the increased workload.
You can see how having a high employee turnover is problematic and can trigger a chain of events that will be detrimental to company growth and workforce morale.
So, let’s dig in into our list on how to reduce employee turnover.
1. Hire the right people
The best way to ensure employees don’t leave you is to make sure you are hiring the right employees to begin with. To make your recruitment effective follow these essential steps:
- Define the role clearly – both to yourself and to the candidates.
- Use a CV screening software solution like RecruitMe
- Make sure the candidate you are hiring not only has the required skills for the job but fits within your company culture as well.
2. Get rid of dead weight
This might be counterintuitive in an article that tries to help you keep your employees, but you have to understand that sometimes a lay-off is the only solution.
No matter how hard you want to make someone fit in your company, sometimes it just doesn’t click. And when an employee is a bad fit for your company, you will suffer consequences like lowered morale which in turn lowers productivity overall.
This is why you should cut loose anyone dragging your teams down.
3. Set a clear set of objectives
Employees need to understand the company’s objectives as well as their own. Otherwise, they will feel lost and aimless.
This in turn will decrease employee satisfaction and happiness, two essential factors in employee retention.
Offering employees a strong vision and goals for their work will increase their sense of belonging to your organization.
4. Improve internal communication
Putting an emphasis on communication makes employees feel valued and motivated. This survey shows that more than 30% of employees feel that they are not provided the opportunity to collaborate enough.
Counter this by encouraging feedback between departments and spread your vision throughout the entire workforce.
Finally, make your workforce a part of your decision process. Employees should feel their opinion matters when strategic changes are overtaken within the organization.
5. Provide a career path
Talented staff looks for opportunities to better themselves and succeed in their career. Workers grow restless in a company where growth is an afterthought and may start to look for these advantages elsewhere.
This kind of turnover can be countered by in-company training, third party education, management courses, etc.
Another successful strategy is to be transparent with the organizational structure and share current and future open positions with your team. This way, you are providing a clear path toward management roles for employees that thrive on success.
6. Recognize and reward good work
Motivate your workers to do better by recognizing the good work they are doing. Let everyone know when someone is overperforming and reward them accordingly.
Sharing positive feedback on a regular basis is one of the most effective ways to keep employees happy and engaged.
Set a monthly budget and make it a habit, and you will also be rewarded, with loyalty.
7. Offer competitive salary and benefits
Financial incentive can often be the main factor influencing whether an employee will jump ship for a better offer. Always ensure employees are receiving a fair wage for the work they are provided.
Additional benefits, not linked to financials, may include flexible work schedules, remote work, training opportunities, and other amenities, such as bonuses or extra vacation time.
8. Conduct employee satisfaction surveys
Employee satisfaction is the driving factor in employee retention. So, you shouldn’t be surprised that conducting employee satisfaction surveys on a regular basis can be very helpful to detecting shortcomings that are increasing employee turnover.
9. Conduct exit interviews
No matter how good you become at employee retention, some people will ultimately leave. Sometimes they will be cherry-picked by a competing recruiter, or they might just feel that it’s time to move on. But these departures are also an opportunity to find out what your former colleagues really think about the company, its vision, management, products, etc.
This is invaluable feedback that should be shared with anyone working on employee retention within the company.
Considering the costs, reducing employee turnover should be a priority in every company.
Detecting telltale signs like lowered productivity and decreased engagement is crucial in your fight against high employee turnover.
But equally important is creating a working environment where employees feel valued and where opinions are heard. Finding the right balance will allow for a loyal workforce, where employee turnover is reduced to a minimum.