Reducing Turnover: Strategies for Employee Retention
You need a skilled and stable workforce to maintain productivity and adequately serve your customers. If turnover runs rampant, though, you’ll incur unsustainable costs, poor morale, and poor team chemistry. According to Forbes, turnover costs businesses about one-third of an employee’s annual salary.
Still, even if you manage to keep the monetary costs of attrition down, frequent quitting will wreak havoc on your team. Employees need time to build relationships and develop chemistry. If new workers are constantly being added to the mix, they are going to have a tough time establishing such connections.
With that in mind, let’s explore some ways through which you can reduce turnover through the use of employee retention strategies.
The Basics of Employee Turnover
Employee turnover can generally be grouped into two categories: voluntary and involuntary. The former occurs when employees quit in pursuit of a career change, better opportunities, more pay, or some other goal. In other words, they decide to leave. The latter, on the other hand, occurs when you terminate someone.
People usually quit for a variety of reasons as opposed to a single grievance or complaint. A 2022 survey by the Pew Research Center explored the top reasons why U.S. workers left their jobs the previous year. Low pay was cited as a major reason for 37% of respondents, while roughly another third listed a lack of advancement opportunities as their primary motivator. Disrespect at work and a lack of flexibility were other commonly reported issues.
Involuntary turnover tends to shift most of the fault to the employee. Usually, the person will have violated policies, consistently performed below expectations, or failed in other areas that showed they weren’t a good fit for the business.
Poor hiring practices can increase the risk of both quitting and firing. People aren’t going to last if you cut corners while reviewing their background or improperly assessing cultural fit.
Regardless of the form it takes, though, turnover is bad for business. High attrition can have a ripple effect that disrupts operations and lowers team morale. You’ll also have to contend with high recruitment costs as you constantly replace lost talent. If many people part ways with your business, you might develop a reputation for being a bad place to work, which can make it hard to attract new employees.
How You Can Reduce Turnover
High attrition can undermine your long-term growth and team performance, which means you must proactively mitigate it through a multifaceted approach. Thankfully, there are multiple ways to attack the turnover problem.
Here are four ways to encourage your employees to remain with your organization for the long haul:
Enhance Employee Engagement
Employee engagement refers to how focused and passionate your employees are about their work and the company’s mission. A highly engaged workforce can make your business up to 21% more profitable.
There are numerous talent engagement strategies that you can deploy to get your team members more invested and focused on the company’s mission. High engagement begins with onboarding. You need to immerse new hires into the company’s culture from day one. If they know what your business is about and how they can contribute to its goals, it will be much easier for them to find purpose in their work.
After you’ve set the tone with a great onboarding experience, focus on cultivating a positive work culture that people want to be a part of. An upbeat culture will encourage your team members to work together and respect one another. And integrating modern concepts like diversity and inclusivity will ensure that people from all backgrounds and walks of life feel valued and appreciated.
Offer Competitive Compensation and Benefits
Compensation and benefits play a major role in whether employees decide to stay or move on. They’re not the only factors in retention, of course, but you must ensure that your offerings are competitive. Explore what your local and regional competitors are offering in terms of compensation, and make sure that your pay scales are similar enough to appeal to applicants.
You can also make up for any ground you lose on compensation with a great benefits package. Traditional benefits like health insurance and retirement savings accounts are top priorities for 80-90% of workers. Most businesses already offer these perks, though, so you’ll need to mix things up to stand out. You could provide a stipend to cover their gym membership or offer health screenings to promote long-term wellness.
Promote Work-Life Balance
If you want your employees to thrive in the professional setting, you must support their overall mental health. And the best way to do so is by encouraging your team members to maintain a healthy work-life balance.
Consider offering flexible work options, such as adjustable hours or remote/hybrid work. Flexibility allows employees to balance their professional and personal lives without having to frequently call in or burn their paid time off hours.
And on the subject of time off, encourage your employees to take regular vacations to help prevent burnout. Your team members should never feel like they can’t request time off. Any time someone submits a reasonable vacation request, do your best to accommodate it.
Build Strong Management Practices
A great leadership team can reduce turnover and increase employee engagement by making the workforce feel empowered and supported.
With that in mind, your leadership team should encourage employees to expand their skills via training programs that align with their roles and long-term career goals. People don’t want to participate in courses that are irrelevant to their interests or needs. They want personalized opportunities that align with their vision for the future.
You should also promote open communication between employees and management. If your team members feel comfortable expressing concerns and suggestions, you’ll have a chance to address issues before they cause your workers to quit.
Measure the Success of Your Turnover Reduction Strategies
You won’t know whether your employee retention strategies are working unless you are listening to the data. On that note, below are three simple steps to maximize the impact of your turnover reduction initiatives:
Conduct Surveys and Gather Feedback
If you want to know what team members think about your business and why employees are quitting, it may be best to simply ask. Surveys are great tools for gaining your employees’ perspectives about what they like and what they want you to do better.
Anonymous surveys, in particular, are one of the most popular options because employees won’t worry about retaliation for voicing their honest opinions. One-on-one or small group meetings can also be useful if you have a good rapport with your team and would like to discuss retention issues in greater detail.
In any case, listen to what your team members have to say and do your best to apply the insights they provide. You may not be able to honor every request, but you can discuss these limitations with your staff to ensure everyone is on the same page. Transparency is key, as you want your team to see that you care about their opinions and are making a genuine effort to improve workplace culture.
Analyze Turnover Rates
Turnover rates are one of the many data points you need to be tracking. Analyze the information you gather to pinpoint which departments or positions are contributing to higher turnover. You should also look for other concerns, such as specific management practices, that may be causing people to quit.
Compare turnover rates before and after you make policy or cultural changes. Keep in mind that it may take several months before your changes make an impact on the data.
Pursue Continuous Improvement
Finally, your retention strategies should evolve alongside your workforce. As employee needs change, it’s important to reassess and adjust your retention efforts accordingly. Tools like PeopleInisght can help you track key metrics related to employee satisfaction, turnover, and engagement. Use these data points to see what you are doing well and where you need to improve to keep employees around longer.
Above all, though, it’s crucial to understand that you’ll never perfect your employee retention strategies. As new generations of workers enter the talent pool, you’ll have to continually fine-tune your game plan to align with their values and needs.
Reduce Turnover With a People Analytics Platform
HireRoad provides user-friendly analytics solutions that are designed to put you back in control of the worker experience. You’ll gain actionable insights about the employee journey and learn how to make it better in order to reduce turnover.
Our flagship solution, PeopleInsight, puts the power of people analytics data at your fingertips. Book a free demo today and rethink how you find, hire, and keep top talent.