10 Effective Ways to Reduce Employee Turnover
Employee turnover affects the trajectory of every organisation. All businesses experience occasional turnover fluctuations, but things become problematic when turnover rates are consistently high.
Contrary to popular belief, even the most successful companies worldwide could stand to improve their turnover rates.
Nevertheless, there are various effective measures that can be implemented to bring turnover rates back under control. Or at least, stem the tide of accelerating or unacceptably-high turnover rates. But before tackling the issue head-on, it’s important to gain a better understanding of the nature and severity of the issue.
Voluntary vs. Involuntary Turnover
There are two primary employee turnover categories, which are as follows:
- Voluntary Turnover. This refers to any instance where a member of the workforce decides to depart from an employer voluntarily. Typical motivations include superior job offers, relocation, family affairs or general dissatisfaction with their current employer.
- Involuntary Turnover. An involuntary departure happens by way of the forced termination of an employee. This may occur as a result of absenteeism, layoffs, poor performance or a breach of the conditions set out in the employee’s contract.
Worldwide, retention rates across all industries have been declining steadily over recent years. The average employee turnover rate for all sectors now stands at around 13% – a figure that climbs to more than 30% for the service sector. Ultimately, only you can decide what represents a satisfactory turnover rate for your organisation.
Suffice to say, less is more.
Careful analysis of your organisation’s turnover is key for making improvements. After all, it’s impossible to change something you aren’t currently measuring. Along with establishing your company’s overall turnover rate in the form of a percentage, you’ll need to carefully consider why employees are leaving.
After which, it’s a case of creating a plan of action to take more proactive control of your firm’s employee turnover rates. The following 10 techniques having proven effective in small and large business settings alike:
- Hire Well in the First Place
Right off the bat, the most effective way of ensuring employees don’t depart prematurely is to hire the right employees in the first place. The less appropriate the candidate is for the job, the more likely it is they’ll part company with your business sooner rather than later.
- Don’t Hesitate to Trim the Fat
Firing employees who don’t fit in with your company’s culture could seem counterproductive where turnover rates are concerned. Nevertheless, you need to consider the damage an ill-fitting employee could be doing to your business and its internal culture, while you keep them on the payroll. If they’re not happy and neither are you, don’t prolong the mutual dissatisfaction unnecessarily.
- Ensure the compensation you Offer is Current
Roughly translated, you need to make sure the wages and benefits you offer reflect contemporary culture and modern lifestyles. Not to mention, ensure you’re not being massively outperformed by rival businesses offering significantly higher wages. If they can get a better offer for the same work elsewhere, they will.
- Express Gratitude More Openly
Job satisfaction isn’t all about take-home pay. In fact, financial rewards often take a back seat to the smaller, often-overlooked incentives. Simply expressing gratitude more often and openly can be a great way of boosting employee satisfaction. If you don’t continuously tell them they’re doing a great job, who will?
- Reward Outstanding Contributions
Every time an employee performs above and beyond expectations, they should be rewarded in some tangible way. Once again, you can’t expect employees to strive for excellence at all times, if doing so doesn’t involve at least some kind of incentive. Strategic incentivisation can have a positive and ongoing impact on employee retention rates.
- Be as Flexible as Possible
While it’s not always possible to bend to every employee demand, a certain amount of flexibility is vital. It’s worth remembering that the vast majority of employees work because they have to – their families and private lives taking precedence. Hence, if you’re able to offer flexible working hours, the option of working from home, on-demand leave for important engagements and so on, you should.
- Invite Regular Feedback
Far too many employers make the mistake of assuming they know what their workers are thinking. Unaware of the fact that these kinds of assumptions never fail to frustrate and infuriate employees. If you want to know what your workers are thinking, what they’re happy with and what they’d like to see improved, it simply makes sense to ask them. Invite regular feedback and take action on the points raised as quickly and openly as possible.
- Prioritise Employee Happiness
A slightly vague workplace policy perhaps, but there is nonetheless nothing more important than employee happiness. Job satisfaction in general has a direct impact on output, efficiency, absenteeism, enthusiasm, ambition and so much more besides. All of which can and will affect your organisation’s turnover rate. If your employees aren’t happy, it’s up to you to find out why and do something about it.
- Encourage Career Development and Advancement
Employees who feel they’ve hit a brick wall with their careers will never strive to achieve bigger and better things. As an employer, it’s your responsibility to open the door to career advancement for every employee. By demonstrating your commitment to their long-term growth and development, they’re far more likely to reciprocate by showing loyalty to their employer – i.e. you.
- Cultivate a Culture of Respect
Last but not least, every member of the workforce must feel respected and valued as a key contributor to the organisation. Irrespective of their position in the company’s hierarchy and future promotion prospects, they need to know that what they do matters and is important. It’s surprising how often the value of respect is overlooked in an organisational setting. Particularly given how it can make the difference being a motivated employee and a disillusioned worker heading for the exit.