How to Reduce Employee Turnover and Make Money Doing It
The best companies truly invest in their employees with time, resources, energy, and training. So when employees walk away, that’s a lot of investment lost. In 2018, more than a quarter of U.S. employees left their jobs voluntarily (not including attrition), costing companies over $6 billion dollars.
Is your company affected by high turnover? You can calculate your rate of overall employee loss using this calculator to determine if high turnover is an issue for your company. Luckily, if it is, there are a number of effective strategies and insights you can use to reduce employee turnover.
But before we get into ways to reduce turnover, what’s the difference between turnover and attrition, and why does it matter?
Turnover vs. attrition
Attrition is the expected cycle of employment at a company. When employees retire, move to another city, pass away, or resign to focus on other things (e.g. attending school, raising children, caring for a relative, etc.), they contribute to your company’s attrition rate.
In cases of attrition, employees aren’t necessarily leaving their jobs due to dissatisfaction with their positions or your company — life circumstances simply dictate change.
Turnover, on the other hand, refers to employees who voluntarily leave. Maybe they dislike the company culture, feel that there’s no room for advancement, or find a job with higher pay. Regardless of the particulars, there is a level of dissatisfaction that drives these employees to resign.
Turnover also includes employees who are terminated. While terminations are sometimes the result of poor behavior on the employee’s part, they can often be an indicator of unclear job expectations, subpar onboarding and training, and insufficient performance feedback.
All that said, here are some strategies to reduce employee turnover and boost your bottom line:
Recruit to retain
Nfrastructure, a subsidiary of Zones, Inc, is a midsize enterprise firm that boasts a retention rate greater than 97%. Their secret? Focusing on good hiring practices.
One of the key strategies for reducing turnover is to ensure that you hire the right people from the get-go. It’s far easier to retain an employee who’s a good fit for your company in the first place.
As part of your recruiting process, identify people who have goals that match your company’s. Look beyond the resume for specific character traits and career, lifestyle, and cultural values that work well with your company vision.
Provide growth opportunities
In 2018, 22% of U.S. workers left jobs for “career development” reasons. If your company doesn’t offer opportunities for advancement, you may be losing employees who feel that their growth is being stifled.
Younger workers in particular highly value opportunities for learning and development, and want their employers to invest in their futures.
Wherever possible, identify and communicate clear career paths for your employees so they understand how to achieve their long-term goals at your company.
From peer-to-peer camaraderie to alignment of values, employees want to feel that they’re a part of something. That’s why creating and fostering connections is so important.
Interactions and working relationships with peers, managers, and executives can all affect how connected employees feel with your company overall. Effective communication on each of these levels can boost engagement.
Breaking down silos and increasing communication are great ways to encourage connection and help your employees feel that they’re a part of something larger than themselves.
Offer balanced benefits
Simply offering benefits doesn’t guarantee that employees will stay.
Benefits must align with company culture and vision, so that workers who want to connect to your company (and who have been recruited with that goal in mind) are incentivized to stay. For example, if your company claims to value work-life balance, but doesn’t offer paid parental leave or flexible hours, there’s a disconnect there that may drive employees to leave.
Petition website company Change.org identified lack of paid parental leave as an issue, and implemented a full-pay policy for protected parental leave as a way of investing in employee satisfaction and boosting long-term ROI.
Retention-worthy benefits are often misidentified as expensive to a company’s bottom line. While it’s true that benefits are a cost, they’re better thought of as a capital investment you make in your own business. Compared to the cost of losing a worker, benefits are a sensible investment — the cost of losing a worker is (conservatively) estimated at $15,000.
In short, offering great benefits saves money in the long run by reducing turnover.
Listen to feedback
You may feel that your company already has great culture and benefits, but how can you be sure that employees feel the same way?
It’s not enough to passively offer channels for employees to voice their ideas — workers want to know that they are being actively heard by management, and that their concerns are being attended to in tangible ways.
Anonymous surveys and assessments are one powerful solution for gathering honest, actionable feedback.
TINYpulse is an employee engagement platform where you can track “how your employees are feeling and performing,” measure just how “happy, frustrated, or burnt-out” your employees are feeling in their positions, and gather real-time feedback about what’s working and what’s not.
From employee engagement surveys to feedback and suggestions, TINYpulse opens the door to a whole new level of understanding so you can get the most out of employee feedback and use it to increase retention.
While employee turnover is a major issue in today’s corporate landscape, it’s largely preventable. Staying attuned to your employees — and keeping them attuned to your company — are the real keys to improving retention, and increasing profit margins along the way.
TINYpulse uses feedback and recognition to improve employee retention. Start a free trial today!