15 Tips To Decrease Turnover
Employee turnover has become a serious challenge for all businesses as a result it has received substantial attention of top management. Retaining employees in the same company turned out to be comparatively difficult. When an employee has made a final decision to leave the job, the opened vacancy might cost the company hundreds of thousands of dollars for recruiting and training new staff. Departure of key executive talent can cost a company millions of dollars in lost revenues. These costs include the screening process, interviewing, onboarding, training the newly employed personal, etc. And not to mention the cost of lost trade secrets to competitors. However, it is not only about the money. Consider the phenomenal amount of time a new employee will spend on getting into business and building those relationships. Thus, the question is: are you ready to invest in your employees in order to have higher retention rate? It is a whole group of factors that might lead to higher turnover. According to research done by Zen Workplace the company has to spend around 30-50% of employee’s annual salary for replacing entry-level employee, 150% for replacing mid-level employee and around 400% for high-level employees. It gives you food for thought, doesn’t it? These costs don’t include the many intangibles such as the loss of relationships, trade secrets and in some cases greater talent.
Different strategies should be elaborated and implemented in order to decrease the possible turnover in the organization. The strategies would differ depending on various factors, such as: the time the company has been running the business (is it a startup company or one dating back to the 19th century?), the size of the company, business orientation, number of employees, annual income, position in the business field, etc. Here are 15 practical tips that will help you motivate your best employees for long-term loyalty.
Tip #1: Research
Consider doing in-depth research and finding out the extent to which extrinsic and intrinsic motivating factors impact the retention rate. The turnover rate has been under HR managers’ attention for a few years now. Many motivating techniques have been implemented, but the major gap is that companies sometimes forget to analyze the results – both extrinsic and intrinsic factors. It is important to note that the research should be done before the actual employment of this or that strategy and, definitely, afterwards as well. Metrics will be needed to help identify the trends and address those issues.
Tip #2: Follow the latest news and statistics
There are many public and private service providers that analyze the market trends, employees’ behavior, layoffs, discharges, etc. According to the Bureau of Labor Statistics (U.S. Department of Labor) as of January, 2016, the total job openings in the US were 5m, while the hires were only 5m. On the other hand many blogs, independent researchers, journals, such as Forbes, Business Insights, SHRM, DeloitteTimes and others, constantly analyze the current market trends, by suggesting new solutions on how to increase employee loyalty and help the company retain its staff.
Tip #3: Keep records
To understand the possible turnover crisis and to take the necessary steps it is of vital importance to start with basic calculation of your company’s turnover rate. Divide the number of total annual terminations by your average employees’ number. Use of analytical HR system can help you better track and predict who might be leaving. The Bureau of Labor Statistics reported that the average annual turnover rate is close to 9%. If you highly exceed this number, start acting immediately, so that it doesn’t affect the bottom line of your business.
Tip #4: Benefit package
Well, this is probably something that you have read in all possible blogs and social networks. It might sound way too primitive, but this is something that you cannot neglect. A competitive benefit package is not something that can assist in finding new talents, but this is definitely something that can help you retain your current employees. The reason is that the majority of companies, especially those functioning in developed economies, always offer a full benefit package, which includes medical and travel insurance, not only for the employee himself, but also for his/her family, retirement plans, special discounts, sports benefits, etc. Be very careful in every taking away something from an employee, as people feel more pain in getting a benefit, status or pay taken away then they feel in receiving it.
2,100 CFOs and 300 employees from top 20 US markets where surveyed by SHRM. The purpose of the survey was to find out the main reason why the employees quit their jobs. According to CFOs 28% of employees quit due to low salary and inadequate benefit package. On the other hand the surveyed employees said that 38% of them quitted their jobs for that reason.
Tip #5: Respect and value
“Every employee is priceless!” This should be the slogan of the company which aims at decreasing total turnover rate. The companies should adjust open-door policy, where each employee will have rights and voice to speak up and to be heard. In employee oriented organizations the turnover rates are comparatively low, mainly thanks to the fact that for the majority of employees the respect on behalf of the employer towards their individuality and the task they perform is crucial. No matter how high the salaries are, or what type of benefit packages the companies offer, if there is no respect and valuation of the employee, his/her ideas and suggestions and dedication to the company, it is hardly possible to keep low turnover rate. Acknowledge every win and make it known that appreciation is part of your culture.
Tip #6: Set goals
You have probably heard dozens of times that planning is the key to success. And truly, it is! Setting goals does not only lead to desired profit at the end of the year, but it is also a great tool for motivation. Small victories at the workplace are not always considered as achievement. Often employees do not even get praised for them. Even for the employees it is difficult to calculate their minor achievements, until they sum up all. They work very hard day by day, trying to reach the goals set, and then after 12 months sales go up by 7% or the profit increases by 5% or the customer loyalty level doubles. You should also set your own goal for reducing employee turnover and do whatever is necessary to meet it.
Tip #7: Communicate
Once in a while the employee should have the possibility of sharing his or her thoughts, ideas, issues and concerns with the management. It can be a 5-10 minute performance talk or annual evaluation, walk in talk or just any opportunity where the employee and employer will meet face-to-face and discuss all relevant topic. This will help the management to identify any upcoming problems at an earlier stage and find appropriate solutions. When the employee feels that her interests are taken into account she will not think of changing the job.
Tip #8: Career growth
In 2013 Cornerstone OnDemand Inc. conducted a survey which has shown that in 39% of cases employees decide to stay in the same company for career opportunities. Think about it. More than 1/3 of your employees are devoted to your values and mission only for some career opportunities. And if you and your employees have the capability it is always better and cheaper to recruit someone from your staff instead of finding someone externally. In fact according to Forbes some of the highest rated places to work are almost entirely made up of companies that promote from within.
Tip #9: Feedback
The same survey of Cornerstone OnDemand Inc. shows that 2/3 of employees never get any feedback or recognition of their achievements from their superiors. And how do you want to retain your employees if you don’t value them? Some managers do not know the art of giving feedback, especially when they are constructive, instead preferring to stay silent and say nothing rather than discouraging by constructive evaluation. That’s not the right case. Employees prefer to know how they can better achieve success as the knowledge and acknowledgement of their shortcomings will give a chance for future improvement. So, if you don’t know how to provide the constructive feedback make use of “feedback sandwich” approach – positive feedback, constructive feedback followed by positive feedback. Well, if your feedback is positive praise your employees, mention all small achievements and give them a reward or prize “Best employee of the month”, for instance. This will encourage the whole team and build your culture into one that encourages feedback as a positive thing and appreciates those who make the company better.
Tip #10: Changes
One of the main factors that drive your employees away is lack of change. In other words employees simply get bored and they start looking for new opportunities. According to SHRM findings around 8-10% of employees quit as they get bored with their jobs. Empower your employees to expand their area of responsibility and have a path to move upward in the organization.
Tip #11: Find the right people
Recruitment of new staff is not an easy task. In some professions it is extremely difficult to find new talent. However, hiring one person because no one else applied for the announced vacancy is simply not a good strategy. The person you hire needs to believe in the values of your company, he or she must be driven by your mission and vision. It’s difficult to find such a candidate, it’s time-consuming, but at the end of the day it is worth it. Every employee you hire will change the culture and work ethic of those around them, so hire only the best.
Tip #13: Time management
Train you employees. Time management is one of the most important skills that everyone should possess. If these skills are poor, the employee might not be able to reach the set goals and unreached goals can cause some “traumas”, thus discouraging them. Another aspect that needs to be considered is that an employer himself/herself should not waste his/her employee’s time. “My company, my decisions” doesn’t really work here: try to be precise with your demands and assignments, and give more independence to your employees. Thus you can monitor their time management and see how they can complete the task using their own methods or experience.
Tip #14: Personal needs and flexibility
Allow some flexibility where possible. Remote jobs have become trendier as people can allocate their time according to their schedule and desire to combine several things at a time: like family, work, fun and other activities during the day. A study conducted by Boston College Center for Work & Family showed that managers (76%) and employees (80%) mentioned that flexibility had very positive effect on employee turnover rate. First, they rationally distribute their time; second, they do not lose time on traffic, transport or lunch, third, they work more productively when not under pressure of circumstances. A survey by SHRM found that most companies found remote workers to be more productive than in-house workers. This is especially true of millennials who have a particular diversion to a completely rigid schedule and are gravitating in droves to companies that offer a more people friendly work culture.
Tip #15: Fun
Never forget about fun. Meetings, discussions, benefit packages, all of these are great tools for retaining your employees, but don’t forget that you cannot work 24/7. There should always be some time for fun. Organize different events (it can be even a 5minute game during intense work day) such as picnics, competitions, Secret Santa/ Christmas party, team-building retreats, etc. An important note here would be that the management should never forget about birthdays of their employees. Send them a card or a small gift or buy a cake and make a small party, anything! What matters is the attention.
In the perfect world your employees will value everything you do for them starting from benefit packages up to Secret Santa party. Unfortunately, when you look at the statistics this is not always the case. That’s why besides all the above-mentioned tips, there is one more thing to pay attention to – make sure that all of you are on the same wave.
Final tip or tip #12: Details
Hopefully, you noticed that tip #12 was missing. If you didn’t, here is the best tip for you – pay attention to details, actually, pay attention to everything and everyone. A culture of communication is key to knowing the challenges your employees face and helping to remove those barriers so they don’t leave.