What is the impact of high turnover rates?
A consistently high employee turnover rate at your company can impact your business and bottom line in several ways. When an employee quits, companies can sometimes spend twice as much as that employee’s salary in recruiting, hiring, and training a replacement. If the employee was client-facing – such as a salesperson or an account manager – there is the risk that the client may discontinue business with your company or follow the employee to their next employer.
Increased employee turnover can also have a negative impact on those who stay behind. Workplace morale can dip, and trust in the company’s management is sometimes questioned when a large number of employees leave the company in a short time frame. A high turnover rate can also make hiring and keeping talent difficult. When it comes to recruiting new talent into your company, those who notice a company has a high turnover rate may be reluctant to work with a company that sees so many employees leave.
Why employees leave
Employees can be motivated to leave a company for numerous reasons – from feeling burned out in their current role to feeling like the company no longer meets their needs. When employees grow tired of their role in a company, they often start looking for a better opportunity elsewhere.
Providing the resources to establish a work/life balance, such as wellness programs, mental health support, fitness initiatives, and stress management techniques, can help retain employees. Something as simple as an improved commute or a different working environment can appeal to someone burnt out at work. Additionally, burnout may cause employees to have a lower opinion of their work and may impact or disrupt future contributions they could make to your company.
How to reduce turnover
Hire the right employees and manage expectations
To ensure you hire the right employees, focusing on compatibility during the hiring process is essential. Assessing how well a candidate aligns with your company culture can lead to long-term employment. Additionally, consider a candidate’s tenure in similar roles at previous employers to ensure it meets your expectations. It’s also important to clearly outline all job responsibilities and salary expectations in the job description before the employee begins working with your company.
Creating clear expectations for the role before they are hired can help an employee be productive from the start. Feeling they are hired for their specific talents will eliminate their anxiety about possibly taking on a role beyond their area of expertise.
Related: 10 Culture Fit Interview Questions to Ask Your Candidates
Maintain constant communication
Many managers emphasize the importance of open workplace communication with their employees. Maintaining an open line of communication helps managers identify problems or concerns before they escalate. Regular interactions with employees allow managers to adjust what the company can offer to meet individual needs better. Additionally, employees should have regular sessions to discuss their satisfaction, performance, and salary expectations. As companies grow, the responsibilities of their most trusted employees may also increase. Employees expect fair compensation for their time and effort, especially if their job descriptions change.
Outline defined career paths
If there is no clear career path for employees, with established goals or changes in the title or salary, it can be difficult for an employee to see themselves with the company for the long term. Taking the time to outline a career path for each employee, including professional development and performance benchmarks, can create a good employee journey, keep staff motivated, and reduce the turnover rate.
Related: How to Manage Employees
Issue special projects or incentives
A dip in employee morale can often be addressed by assigning a meaningful project to an employee who might be thinking about leaving the company. Trusting an employee with the responsibility of managing a premium client or organizing an all-office event can demonstrate appreciation and build trust. Additionally, competitive monthly or quarterly sales incentives can motivate a sales team and help supplement their income.
Adjusting company policies and workplace benefits
If low morale is contributing to your company’s high turnover rate, it may be time to reevaluate your company policies. Providing benefits that promote work-life balance can significantly enhance employees’ sense of freedom and independence, helping to retain them longer. Implementing flexible schedules, four-day workweeks, or remote work options can boost productivity and foster trust among employees. Additionally, introducing an unlimited vacation policy can effectively reduce turnover caused by burnout.
Reducing high turnover rates is crucial for maintaining a stable and productive workforce. High turnover rates can increase costs and disrupt team dynamics. To combat this issue, companies can implement various strategies to create a more supportive and engaging work environment that encourages employees to stay with their companies long-term.
