When you finally hire your ideal employees, you might breathe a sigh of relief that your recruitment search is over. But what happens if members of your team start dropping out to take positions at other companies?
You can shrug and dust off the job description to start hiring again or you can take a step back and look at why those people left. Was it normal levels of attrition that all companies have or are the signs pointing to a larger problem with employee turnover? While no company is immune to turnover, there are steps and strategies you can put in place to help reduce the number of employees walking out the door.
In this article we will look at exactly what turnover is and how businesses can lower employee turnover rates going forward.
What is employee turnover?
Turnover, in an employment context, refers to the number of employees who leave a company and are replaced with new hires. All companies will, and should, have some amount of turnover.
Turnover alone is not always a negative factor in a business. Companies want new ideas flowing into the workforce and turnover sometimes helps foster that energy. But when those turnover numbers start getting too big, it’s time to take notice and see what you can do about reducing your turnover rates.
Why is reducing employee turnover important?
You’re never going to stop turnover. It’s simply a fact of being in business. But you can do your best to reduce the rates at which your employees leave. Turnover can tell you a lot about your company. If your turnover over numbers are even and you’re consistently getting rid of less productive workers, then that’s a positive sign and an example of “good” turnover. But if you’re losing top productive performers, that’s a very different problem.
Turnover can lead to many problems, including:
- Disruptions on teams
- Delays in projects being completed
- Gaps in shared knowledge
- Significant impact to company morale.
- Lower productivity
And last, but by no means least, there’s a very real physical cost to high turnover with the costs of onboarding new staff high.
What factors impact turnover rates?
The short answer is a lot. It’s important to note that some contributing factors to turnover may be outside of a company’s control. Because of that, there will always be an uncontrollable X factor when it comes to turnover.
But when considering the issues companies can change, there are a few common factors that often pop up. These reasons include:
- Low employee engagement or morale
- Financial or benefit related issues
- Lack of connection or belief in the company and its direction
- Lack of a defined career path.
If employees feel like they aren’t being appreciated or their careers aren’t going anywhere, there’s little to stop them from saying goodbye.
What strategies can be used to lower employee turnover rates?
These days, there seems to be no end of recommendations and tactics to lower employee turnover rates out there but not all turnover strategies are created equal. One key element to any talent management program should be understanding and planning with the employee lifecycle in mind.
There are three key areas of an employee’s tenure where the problem of turnover might raise its head. Let’s look at each and discuss how you can prevent the urge to leave.
The beginning – start off on the right foot
When thinking about turnover, most managers look for ways to retain the staff they currently have. While that’s incredibly important, it’s not actually where your fight against turnover should start. One of the best protections against early turnover is in the actions you take before a hiring decision is even made.
Part of a strong retention plan is hiring the right people and getting them into the right seats as they develop within the company. Before you even go out to find your candidates, think about the job profile you want to hire for. Have a clear view of what the position is really like. That means doing your research and going beyond a simple list of skills or educational requirements. Are there personality or attitude factors that need to be considered when bringing someone new into a team? What would a successful hire in this role look like? It’s important to articulate who you’re looking for before you start searching so you’ll recognize the right person when you find them.
Have an effective interview strategy that weeds out those who are unsuitable for the role and entices those who fit.
Onboarding – set the right tone and make them feel welcome
One of the most important steps in reducing turnover happens very early in an employee’s tenure. Right from day one, all employees should go through a formal onboarding process. A strong onboarding process should convey the company’s mission, culture, and values, along with the standard first day setup.
It shouldn’t end there. Onboarding is not a one day or even a one-week process but should include a plan that covers the first 3-6 months. Make the employee part of your culture and they won’t want to leave.
Show your appreciation
Don’t forget about current employees. In the previous section, we learned how turnover can be addressed in the opening months of an employee’s employment. Part of addressing turnover has to happen at that phase but it’s also important not to forget about the staff already in the company.
Part of what supports an engaged workforce is having fair compensation and a good benefits package. And that’s not just about productivity bonusses or health care anymore. Modern employees are looking for modern benefits, often in an attempt to achieve a better work-life balance. Some increasingly common perks include:
- Flexible work schedules
- Student loan repayment assistance
- Unlimited vacation days
- Reduced working hours,
- Free lunches
- Gym memberships
- Free childcare
Take a minute to dust off that benefit package and see if there’s anything you can adjust or update to keep your staff happy.
Employees leave. It’s a fact of life. But as a business, having lower turnover rates amongst staff can save time, effort, and (more importantly) money.
- Accurate pay out of incentives & allowances
- Job contract & personal records online
- Payroll, absence & vacation records online
- Fair absence requests & approval policy
- Timely perks & benefits distribution & monitoring
- Transparent grievance & redressal policy
- Access staff records with secure rights online