Maintaining a productive and effective workforce is one of the biggest challenges business owners and leaders will face in the coming years.
Low unemployment rates and a widening skills gap is creating an environment where it is harder to find (and keep) valuable employees. The competition for employee retention is fierce, in part due to the high cost of employee turnover.
Replacing employees is costly. Estimates vary with the exact price tag that goes along with replacing employees, but some companies report that it can be as high as 200% of the departing employee’s salary. In addition to the direct costs (advertising, vetting prospective employees, training programs), indirect expenses can have an impact on a company’s bottom line as well.
The loss of productivity, overtime for employees picking up the slack and other unforeseen costs can add up quickly.
Is it possible to prevent employee turnover?
According to a comprehensive report done by the Work Institute, 1 in 4 employees will leave their job each year and nearly 75% of the reasons they’ll leave are preventable.
With the increasing number of options available to employees, employers who wish to establish a cohesive workforce must act.
What are the top reasons given for employee turnover?
• Career development
• Work-life balance
• Behaviour of management
• Compensation/benefits packages
• Personal well-being
• Job responsibilities
• Workplace environment
Other reasons given include retirement, relocation and involuntary turnover. Savvy business managers will realize that addressing the preventable reasons employees cite for leaving can help increase employee engagement and prevent voluntary turnover.
Employers can take steps to address issues within their organization that may be causing employees to leave. By developing a comprehensive plan to retain employees, business managers can create an environment where employees want to stay.
How can you prevent voluntary employee turnover?
Conduct exit interviews. The quickest way to find out what’s causing employee turnover in your company is to ask. Use open-ended questions to find out why employees are leaving. Look for underlying reasons that may be a factor as well.
Hire carefully. Successful recruitment is an essential part of preventing turnover. When the right employees are hired for the right job, they are more likely to become engaged and vested in their position.
Use on-boarding effectively. Create a strategic on-boarding program that helps new employees assimilate into the culture and responsibilities of their new job
Assess your compensation package. Do you pay a fair wage? Are your employees happy with the benefits they receive? Ensure that your company is competitive with similar businesses.
Evaluate management behaviour. Does your management team promote the company’s core values? Do they communicate to employees the attitudes and behaviors you want? Are your employees valued for their individual personalities and skills?
As the job market becomes more and more competitive, employers must take steps to cultivate a workplace where voluntary turnovers are the exception, not the norm. Reducing the reasons employees would look elsewhere is a powerful step towards improving employee engagement and improving corporate success. How are you encouraging your employees to stay?
Michele Bailey is president and CEO of Blazing Agency and My Big Idea®. These two lines of business work congruently to support her clients’ success.