When the cost of employee turnover is 33% of an employee’s salary, getting employee turnover could be seriously damaging to your business’s health. Recruiters often charge 20 to 30% of the new hire’s salary. These are costs you could well do without.
High employee turnover is costly and off-putting for potential recruits. It’s time to get your employee turnover down. Read on to learn how to lower your turnover rate.
1. Measure Your Turnover Rate
Goal setting is often focused on the desired result. That’s understandable but it ignores an essential fact. Without this information, the whole enterprise can fail before it begins.
Imagine trying to walk to a specific location using a map. You find the place on the map and then decide to set off.
Should you set off now or in the morning? It depends on how far you have to go. Which direction should you walk in?
The problem is that you have not identified your current position on the map. This is the same issue you will face with employee turnover. It’s not enough to set a goal without understanding your current performance.
After you calculate turnover rate, you should analyze the reasons people leave and establish the cost of the turnover. The reasons people leave will help you decide what changes you need to make.
The cost of employee turnover will provide you with an idea of the size of the prize. It’s the potential saving you could make. It’s also a guide to how much you might be prepared to invest in the project.
2. Hire Right
When you hire a new employee and they leave soon afterward, you have to ask yourself whether you hired the right person. Perhaps you recruited the best applicant for the position but they are still wrong for you.
It’s tempting to hire the best candidate even though they are not the right person for the job or your company. The reason you might do this is a concern that if you don’t, you’ll incur even more recruitment cost and there’ll be more delay.
Better to cut your losses. Don’t spend money on orientation, training, and compensation when they won’t perform well and won’t stay. Go back to your recruitment strategy and find out why it didn’t produce the right candidates to select from.
A typical recruitment process involves identifying the skills and experience you’re looking for. The recruitment advertisement asks for those skills and experience and the interview focuses on this too. This approach misses the importance of attitude.
Skills can be trained, but attitude is more fundamental and subtler. It’s the product of life experience and predisposition. Make sure you recruit people with the right attitude for your business or they won’t fit in.
3. Compensate Well
Research, so that your compensation package is competitive. Understand what mix of pay and benefits is offered by competitors and what prospective employees are likely to expect.
Starting salary isn’t the only factor to consider. As time goes by, your employee’s expectations may change. As they get more experience and acquire skills, they become even more attractive to other employees.
Don’t take employees for granted. Keep salaries and benefits under regular review.
You might think that if a valued employee gets a better offer elsewhere, you can make a counteroffer. Research indicates that 50% of these employees leave within a year anyway. Better to put effort into stopping your best employees from looking elsewhere.
4. Show Appreciation
Once the compensation package meets expectations, employees need more from you. They need recognition and appreciation. These human needs cost little and can engender much greater loyalty than pay alone.
Showing appreciation encourages good performance. People like to be praised so they tend to do more good stuff because they like being appreciated.
If there’s one effective way of turning great employees off, it’s treating them just the same as their poor-performing colleagues. The good people will tend to leave and you’ll be left with the poor performers. To put it another way, the eagles will fly away and you’ll be left with the turkeys.
5. Build a Future
What does an employee do once they master their job? For many people, this is the time they look for the next job and hopefully a bigger salary.
If you hope to keep people, and if they’re the right people, help them plan their career with you. You can help people with their career aspirations by providing learning opportunities and experience that they can’t get elsewhere. You’ll be providing them with reasons to stay with you.
6. Be Flexible
One reason people leave an employer is that they experience a life change. It might be that they become pregnant and then have childcare responsibilities. It might be, and in our aging society, this is becoming more common, that they have eldercare responsibilities.
Being able to balance home life and working life is a challenge. Flexible working arrangements make it possible. Employers that offer this flexibility can retain valuable experience that would otherwise be lost.
Flexible working hours, part-time working, and working from home are just a few of the options available.
Remember, an employee may need flexible working arrangements for the short-term. When their needs change, perhaps they’ll return to more conventional working patterns and you’ll have retained their experience. You may even have a more committed and loyal employee.
7. Good Leadership
Check the reasons why people are leaving you. You may find that your employees are not leaving the company. They’re leaving a particular manager.
We tend to pay managers more than we do other employees. This is because we recognize that they can have a bigger impact on the organization than others. If the manager is poor, this impact can be a big negative one too.
Train your managers so that they have good leadership skills. Teach them to value their people and to provide them with the direction and support they need.
8. Engage Employees
Engage your employees by involving them in decisions about their role and the business. You might get some great ideas. You’ll also make people feel more committed to the business.
Engaged employees are committed to the aims and objectives of the organization because they are their own aims and objectives. Once you achieve this, you’ll have no trouble keeping your employees.
Keep Your Good People
With these employee retention strategies, you’ll keep good people. Your employee turnover rate will reduce too. You may even improve your business performance.
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