How to reduce employee turnover: Candid strategies & tips
According to Gartner, the annual employee turnover rate in the US is set to jump by 20% this year, with a total of 37.4 million professionals quitting their jobs in 2022. That’s a significant rise from the pre-pandemic average of 31.9 million employees and reinforces the need for employee retention tactics so organizations can hold on to top talent.
A certain amount of employee turnover is inevitable and is considered healthy. However, too much will start to disrupt your operations.
Why is excessive employee turnover a big deal?
It is because a high turnover rate is a surefire way to diminish the profitability of a business. This is already occurring in the US, and if the trend doesn’t change, corporate profitability will reach its lowest point since the 1980s, according to a recent report by The Conference Board. That’s why employee retention strategies and a robust hiring process are crucial for any organization in today’s age.
If you hire the right employees and take significant measures to hold onto them, you won’t have to worry about a high turnover rate tanking your business. If you want to learn how to reduce employee turnover at your company, you’ve come to the right place. Read on to learn how to attract top performers and retain them for the long haul.
What are the top causes of employee turnover?
To learn how to reduce employee turnover at your company, you first need to understand what makes someone want to change jobs in the first place. Are they interested in a new career path? Do they feel isolated by your company culture? Do you have a solid onboarding process for new employees?
These are all relevant questions to ask yourself if you notice employees leaving your company at a high rate. They could all be potential reasons.
The studies tend to point at these primary factors that cause employee turnover:
Career path. They leave to pursue other career development opportunities (i.e., a promotion or a higher-paying job performing the same role).
Burnout. If your staff has too much hard work for their role (i.e., combining two roles into one to save money). This can kill their morale and cause them to pursue other opportunities. That’s especially true if they feel as if they’re underpaid for their work.
A better work-life balance. If you require your employees to work six consecutive 12-hour shifts each week, they will likely leave to seek out a better work-life balance. While it’s crucial for employees to stay dedicated to their roles, work isn’t everything. They’ll likely switch jobs to spend more time with their family or do things they enjoy.
Ineffective management. When surveyed, a whopping 82% of employees said they would leave a job due to a bad manager. That stat sheds some real light on the employee/manager relationship. In particular, employees stated that one of the most deciding factors was that managers disregarded their personal time, and they did not feel respected as a result.
A lack of employee engagement. Your team members need to know that their positions are valued and play an important role in the company. They may leave to pursue more desirable opportunities if they’re not engaged or challenged. It’s crucial to let your people know that they’re appreciated and do valuable work for your company if you want to retain them.
Those are the top reasons an employee may seek a new work environment, but they’re by no means all of them. Yet, if you strive to take measures to correct these top issues, you’ll be well on your way toward reducing your high employee turnover rate.
Why is minimizing turnover essential?
Reducing the amount of turnover you see at your company will yield some profound benefits, including:
Continuous production. When you lose people at your company, it causes an inevitable disruption to your productivity. Not only that, but there’s the time-consuming and cumbersome process of making new hires, training them, and then going through the onboarding process. Retaining your employees will help you avoid these disruptions.
Boosted morale and employee satisfaction. If employees are leaving your company left and right, you’ll likely have to bog down your existing staff with more work. That can lead to reduced morale and frustration. Yet, if you retain your employees, you’ll enjoy healthy stability that leads to a positive work environment and high employee morale.
Reduce costs. It takes a lot of capital to replace a top-performing employee, not to mention the profit you will lose in their absence. There’s also the matter of training the new employee to match the skill set of their predecessor. If you retain your top performers instead of losing them, you’ll save a ton of money and will earn more profit.
Better customer relationships. Picture this; a long-time client of yours always deals with a team member named Betty on the phone and has so for years. Betty is attentive and polite, and she knows what they’ll ask for before they have to say a word. Imagine their frustration, then, when they call your company one day to discover that Betty left the company due to incompetent management. What’s the moral of the story? Holding on to your employees will lead to better customer relationships.
These are only a few of the benefits you’ll enjoy from retaining a high number of employees. As you can see, holding on to your employees will lead to a more successful organization in nearly every capacity. It will also save your human resources department from having to work overtime due to the excessive need to hire people. This frees them up to focus on other important initiatives.
Tips on how to reduce employee turnover
Now that you know why retaining your employees is an absolute must, it’s time to learn how to reduce employee turnover at your organization.
Retention starts with recruiting
The hiring process plays an enormous role in the amount of employee turnover that you’ll see.
Why is that?
It’s because if you hire the right employees from the get-go, you’ll stand a much greater chance of retaining them for the long haul.
As such, you’ll want to train your HR professionals to be completely upfront about your work culture and what you expect of your employees during the interview. It may seem tempting (and more effective) to tell prospects what they want to hear. However, being completely honest will yield better results.
That includes being honest during the job interview and in the job description that you post on sites like Indeed.com. Believe it or not, most employees can see right through a phony job description.
There’s plenty of proof to support this claim, too.
In fact, less than half of surveyed employees felt that job descriptions accurately reflected the responsibilities of the position — according to a report from Jobvite. That same report also found that nearly a third of employees have left jobs within the first 90 days due to dishonesty in the interview or on the job description.
Remember that the next time you write a description for a position. Do your best to be forthcoming with the actual responsibilities and duties associated with the role. That will help you find the right person for the job.
Offer a competitive salary and benefits
If you have an iron-clad hiring process and fantastic company culture but are still scratching your head on how to reduce employee turnover — it’s time to take a look at what you’re paying your people. In particular, you need to ensure that you’re staying competitive with the market rates for your industry.
For instance, if one of your managers notices that he can get triple the money performing the same role at a rival organization – he will likely leave as soon as they can.
This reason for leaving goes beyond base pay, too. Even if you’re offering a competitive salary in your field, employees may still choose to leave if other companies offer better benefits or pay more frequent raises/bonuses than you do.
It would be best if you sat down with your hiring team to determine the best salary, benefits, and perks to attract and retain top talent. Along the way, research all your top competitors to see what they pay their people.
Offer flexibility to employees
This tip is related to work-life balance. In today’s age, flexible work schedules are massive incentives for employees.
What are examples of flexibility in the workplace?
Flextime (allowing employees to choose when they complete their required hours for the week).
Compressed work weeks.
Part-time work schedules.
Remote work on certain days.
Job sharing (allowing employees to switch shifts).
These are all great ways to incorporate flexibility into your work environment. Flexjobs even conducted a survey that reinforced this concept.
According to their report, 30% of workers have left jobs in the past due to a lack of flexibility. The study also found that 80% of workers would feel more loyal to their organization if offered more flexible work options.
Encourage positive feedback
It can be crushing to endure long work hours and complex projects without so much as a pat on the back.
Positive reinforcement goes a long way with employees, even if it’s as simple as a thank-you note or some verbal recognition. Providing new opportunities to reward good work is another effective tactic.
Train your managers to recognize and reward hard work from your employees. All too often, managers spend too much time focusing on the negative. Yet, 70% of employees report that positive feedback makes them want to stay at their current organization longer.
Provide opportunities for continuing education
If you want to know how to reduce employee turnover, you need to provide development opportunities for your staff.
If your employees have no way to grow a career at your organization, they probably won’t stick around. To ensure that every employee has a chance to flourish, you need to provide opportunities for continued education and advancement at the company.
There are a few ways to go about this, but implementing new training programs is often the most reliable.
Online courses and hands-on instruction are both great ways to educate your people and teach them new skills. If you promote from within at the same time, you’ll help employees develop their careers – which can elicit a strong sense of loyalty.
Concluding thoughts: How to reduce employee turnover
Those are some of the top ways to reduce employee turnover and retain your top-performing employees.
If you want top talent to stay at your company, you need to make it worth their while. That not only means offering competitive pay and benefits but also providing flexibility, an engaging workplace, and exciting company culture.
Lower employee turnover will lead to reduced costs, more profit, and better customer relationships. So you have every incentive in the world to retain your people.