Employee turnover is something that every business with workers will experience. Yet, when employee turnover does occur, it costs the business time, money and productivity. Businesses with a high employee turnover don’t have to change their operating procedures. Instead, management may want to consider a few key strategies to keep employees happy and satisfied at work so that turnover rates can decrease.
Why it’s important to reduce employee turnover
While it is unrealistic to believe that all of the employees within a business will stay there forever, it is important to try to increase retention rates. High turnover rates have a variety of effects on a business, from monetary expenses to productivity decreasing and low morale.
Hiring costs
When a worker decides to leave their organisation, that business incurs the expense of having to find a new and suitable employee to take over. The loss of money starts with the resources the company puts into the departing employee and flows into the various expenses put into things like advertising, training and background checks that are needed in order to hire someone new.
Overtime costs
A departing employee also affects the individuals who are still working with the company. While management scrambles to find a replacement, other team members may be required to take on extra work so that things can keep running smoothly. Taking on another person’s role may require an individual to work over time, and the company will have to compensate the worker for the extra hours.
Morale
A high turnover can negatively affect the morale of the remaining workers. Some team members may feel burdened with extra work and therefore more stress, while other employee’s mood may decrease at the thought of losing a friend. If your organisation has a high turnover rate, it may also affect employees by leading them to believe that there is no future within the organisation.
Business image
Turnover rates also have a negative impact on the public image of the business. If a company has gained a reputation as a revolving door of employees, it doesn’t necessarily attract people through the doors looking for employment. If you want the best employees at your organisation, bad word of mouth surrounding employee retention isn’t helpful.
Low productivity
Low productivity in the wake of employee turnover not only relates to the departing employee’s work. It also has effects on surrounding coworkers. When a new hire comes in, coworkers have to help a new person perform the role accordingly, resulting in their own productivity suffering because they are performing additional roles.
How to reduce employee turnover
Reducing employee turnover is dependant on the work environment. Employees thrive in their roles when their work environment supports and encourages them to work at their best. The best employees share their company’s vision and adapt their work to further that vision. That is why, at the end of the day, reducing employee turnover comes down to simple measures like hiring the right people and treating those people as valuable commodities in your business.
Hire the right people
Hiring individuals on the basis of a strong resume alone doesn’t necessarily make them the right employee for your business. If an employee doesn’t fit in with the established work environment or doesn’t buy into the company’s vision, there is no incentive for them to stay long term, or work hard in the short term.
Reducing employee turnover can start at the point of hiring. In the interview process, ask employees behavioural interview questions to find out how they react in certain situations. Take them for a tour around the office and inform them of the workplace culture. If this suits the potential hire they will be happy in their work and perform accordingly. While a person who is uncomfortable with the work environment and put off by the mission statement will start off unhappy and will rarely want to stay.
Offer competitive pay
It is a known fact that people want to be compensated for their work. Employers cannot expect employees to stay at a company that is offering them low wages and minimal benefits when a competing company is offering much more. When hiring staff and looking at bonuses, doing some market research can make sure that you provide wages that are competitive and reflective of the work people are actually doing.
Another factor is that employees appreciate being offered raises that reflect their development and worth. It is unrealistic to believe that employees will happily stay on the same wage for years and years when their skill set and work load is only increasing. Raises can go a long way in showing appreciation for employees who could look for work elsewhere if they are feeling undervalued.
Give praise
Employees need encouragement and recognition, otherwise they won’t know if the job they’re doing is good enough. Employers don’t have to praise every small task, but rather show appreciation for the completion of hard or good work. The goal here is to create an encouraging and positive working environment that employees will want to be part of. If employees aren’t recognised for their efforts, there is a danger of them feeling underappreciated and seeking alternative working arrangements where they will be appreciated.
Show the career path
If employees are left in one job for too long they may start to look for another job where there are more advancement opportunities. Employers will find that most employees want to increase their skills and knowledge, as well as their position on the corporate ladder. By sitting down with employees and discussing a career path, the employer is giving their workers a clear sense of direction and purpose, making the employee feel valued and an integral part of the working team.
One of the best ways to reduce employee turnover is to hire the right people for your business. At Ability Options, we specialise in finding the right people for your business, so contact us today.
