5 Steps To Avoid The High Cost Of Employee Turnover
Employee turnover is a concern that burdens every organization with headaches. When workers leave, your business incurs a high cost. It’s time-consuming and costly to find, train, and equip a replacement with relevant skills. That’s why it’s wise for organizations to keep their turnover as low as possible. Although there’s no magic bullet for employee retention, there are some steps you can take to get your business back on track. Here are five steps to avoid the high cost of employee turnover.
1. Evaluate Your Business’ Turnover Rate
Determining the size of your problem is the first step to finding a lasting solution to your employee retention challenge. How many employees have left in the past two years? Did they go to a competitor? How long did they stay before leaving? Did they give you a reason for leaving?
Once you answer these questions, you can now embark on calculating your employee turnover rate. You get this value by dividing the numbers of workers who left the business by the average number of workers in a specific period. Then multiply the value by 100 to convert it into a percentage. You get the average number of workers by working out the sum of the number of workers present at the company at the start of a specific period and the number of workers available at the end of a particular period; then the number is divided by 2.
Calculating your employee turnover rate will give you investigation-prompting information. If your turnover rate is high, then you’ll have to research extensively to identify the cause and find long-lasting solutions. If it’s low, then you’ll have to find out what you’re doing right and come up with measures to make the most out of your strengths.
The most common causes of high employee turnover rate revolve around interpersonal issues, lack of acknowledgment, and workload challenges. Interpersonal problems include pressure from clients or customers, overly demanding managers, and lack of proper conflict resolution mechanisms. Lack of acknowledgment includes workers feeling unappreciated for their efforts and commitment. Workload challenges comprise of things like feeling burned out, working overtime without meaningful compensation, and working around troublesome processes. Resolving these issues can be a significant step towards shutting the door on staff turnover.
2. Bring the Right People on Board
Retaining workers begins with recruiting the right people. Don’t focus only on the skills that fit your open position. Determine whether potential candidates align with your company’s culture, as well. It would help if you recruited people whose characters suit the job. Ask candidates behavioral interview questions to determine how they respond to specific situations. Inform them about your business’ culture – individuals who don’t fit in may disqualify themselves.
If you hire people who are incompatible with your company’s culture, they’ll always be sad and unmotivated. It’ll be hard for them to connect with their coworkers, and they’ll ever feel isolated. An excellent candidate who isn’t compatible with your workplace’s behaviors and cultures will leave as soon as they find somewhere where they’re a perfect match.
It’s also vital to ensure you have a seamless onboarding process in place. Otherwise, a flawed onboarding process will translate to high employee turnover. A national job seeker poll studying applicant-recruiter relationship reveals about 30 percent of recruits have relinquished a job within the first three months. You can avoid this by helping your new hires settle comfortably into the position.
Start by introducing them to other employees on their first day to enhance social connections. Business managers can help with organizational requirements during the early few days of employment. It will be a perfect opportunity for managers to acquire a fresh insight on corporate innovation and provide reliable operational support to the new hires.
3. Offer Competitive Salaries and perks
Employees want to be paid well. They need to take care of typical expenses such as food, housing, and utilities. They need a sufficient amount of money for extras, as well. Failing to compensate your employees well will see the cost of turnover hit the roof.
A survey by Glassdoor reveals that 57 percent of respondents thoroughly review salaries and perks before deciding whether to take a job or not. When deciding how to compensate your workers, it’s advisable to perform in-depth market research on salaries. Determine how your competitors pay their employees. Look for similar jobs within your area of operation and find out the salary range. The idea here is to ensure your salaries and benefits are at par or even better than those of similar businesses in your local area.
You don’t have to deliver a full salary and benefits package. Just keep it simple. Most employees want essential perks, such as health and dental insurance. These perks are more economical as a group plan, allowing you as the business leader and your team to stay healthy and give crucial health and wellness issues the seriousness they deserve. Also, consider providing some paid sick leave and holiday. If your business is fully established and profitable, you can provide things like unlimited leave, gym memberships, and retirement plans.
If you have remote employees, you can offer them technology perks such as a smartphone, a laptop, or a company-paid Wi-Fi. You can also provide them collaboration tools, project management software, and other tech solutions like cloud storage. If you decide to skip all these technology benefits, then offering a technology stipend or creating a compensation program are both great alternatives.
4. Provide Flexible Work Schedules
Offer flexible work options, if possible. It’s easy for employees to organize their work time and create a healthy balance between work and personal life for themselves when they’re offered flexible work schedules. They can pursue non-work related matters, attend appointments, and give their loved ones the attention they deserve.
If you’ve adopted the remote working model due to the COVID-19 pandemic, consider extending the same option for some, if not all the employees, even after normalcy returns. You can encourage them to work from a reputable coworking space such as Upsuite to eliminate some of the challenges associated with working from home and enhance productivity.
Involve your employees in the process of developing flexible schedules. Provide them with the autonomy to create their own schedules and deliver it to you for consideration. Giving your employees the freedom to collaborate and construct a system that aligns with the unique needs of all of them will enhance trust and help you develop a great flexible work policy.
Allowing team members to work remotely builds a sense of trust and appreciation. Be confident in implementing your flexible work policy. Otherwise, if you show doubt, team members will notice. Leverage cross-communication tools like slack to ensure every team member is accountable and always reachable.
If your business can’t offer flexible work schedules, don’t fret! There’re still tweaks you can make in your business to provide flexibility, including but not limited to flexible lunchtimes.
5. Encourage Your Employees to Climb the Career Ladder
If workers remain stagnant in one job for many years, they may look for another job that offers them growth opportunities. Most employees want to expand their knowledge and sharpen their skills so that they can climb the career ladder. They also want a leader who is always ready to support them and willing to create new opportunities for them. This may sound like asking too much from a leader, but the benefits of supporting your employees to advance in their career are immeasurable.
Employees love working with confident leaders that don’t feel threatened by their potential and aspirations. It becomes extremely hard for employees to make any meaningful career advancement when they’re working under a leader that’s only looking out for their own interests. Leaders who feel threatened by their employees often end up becoming followers.
It’s your responsibility as a leader to discover and mentor your successor. Rather than being threatened, you should dedicate your time towards making yourself a better leader who is ready to serve others more effectively. You can start by showing your staff a projected career path. What is the next thing after their current position? Perhaps it’s a vertical or horizontal move. Or, perhaps they can acquire more responsibilities in their current role. No matter what it is, ensure your employees clearly understand how they can progress.
Encourage them to take risks, make mistakes, and draw important lessons from their mistakes. Also, guide them to work through the burdens related to failure. If you limit their ability to experiment with new ideas, they will never realize their full potential. Don’t micromanage your team members. Instead, trust them and encourage them to take risks and explore opportunities that can help them learn and develop new skills on the job.
Employees will always leave your company. They’ll get more lucrative job opportunities, change career paths, or even start their businesses. Employee turnover will always be there. But you can significantly minimize it by creating a healthy work environment where workers want to stay. Always try to understand and respond to the unique needs of your company and your workforce. Maintain effective communication with your employees, spot signs of problems, and resolve them right away.