6 tips to reduce employee turnover
In the U.S., about a third of workers have seriously considered quitting their job, according to an analysis from CNBC and Survey Monkey.
High employee turnover creates real hurdles for businesses who, on average, must replace more than a quarter of their workforce each year. That means spending time recruiting, hiring and training new faces, which results in money and productivity lost. Knowing your turnover rate can help you gauge how you’re doing and take steps to prevent excessive employee churn.
What is employee turnover?
Employee turnover refers to the number of workers who leave a company and are replaced with new workers. It can also be expressed as a percentage.
There are two types of employee turnover—voluntary and involuntary. Voluntary employee turnover signifies a situation in which workers choose to leave, as when they’ve gotten a better offer, or they don’t like what they’re doing. Involuntary turnover is when an employee is forced to leave, as when they’ve been fired or let go.
There’s also internal turnover, in which an employee leaves one job function and takes on another role within the same organization, but this generally isn’t considered a disadvantage.
Different industries have different rates of turnover, and what may seem high for one industry may be completely normal for another. Think, for instance, of turnover of restaurant staff versus turnover of workers at an accounting firm.
How do you calculate employee turnover?
The turnover rate calculation is a relatively easy one: Divide the number of employees who leave in a year by the average number of employees at the company, then multiply by 100 to get your percentage number. For instance, if 10 employees leave each year and there are 40 employees on the payroll, employee turnover at your company is 25%.
How to reduce excessive employee turnover
In general, employee turnover is hard on an organization. There may be a lag in productivity while a company works to find a replacement. It takes time and money to find, hire and train someone new for a position. And if too many people are leaving, it can affect employee morale.
Try these six effective tips on how to reduce employee turnover and boost employee retention:
1. Be thorough in your hiring process
Grabbing the first candidates who applies for the position isn’t the best way to make sure someone is there for the long haul. Be precise and candid in your job description and spend time during the interview process making sure it’s a fit for both parties—a great candidate who doesn’t mesh with your company culture will be quicker to bolt for the door.
2. Keep pay competitive
If you’re paying less in salary or offering less in benefits than other players in your industry, you’re going to lose good talent to the companies that are ponying up. Take requests for raises and bonuses seriously, because it could indicate that your workers are feeling undercompensated.
3. Be flexible and work-life balance
The overwhelming majority of professionals (96%) say they need flexibility at their jobs, but only 47% have it, according to a survey by analytics platform Werk. There are a myriad of ways to do this, from allowing employees to work unconventional hours to four-day weeks to telecommuting to a reduced workload. Find out what your employees want, and if it’s possible, give it to them.
4. Recognize your employees’ good work
Workers who feel unappreciated are workers who will seek praise for their efforts elsewhere. If your employees are killing it, show them you’ve noticed and offer a reward.
5. Encourage employee development
No one likes to remain stagnant. Eventually, workers like to move onward and upward, so provide employee development opportunities at your company, whether through professional training or promotional tracks.
6. Create a great company culture
Don’t underestimate the value of respect, learning, inclusion and empathy in the workplace. Businesses with a strong company culture see lower employee turnover numbers than those with lower company culture. Let your positive energy shine.
Find talent and keep it
Keeping your best employees can help you build a cohesive team, create a positive work culture, and improve employee retention. But some employee turnover is unavoidable. Need help filling a gap with new talent? Sign up for Monster Hiring Solutions to receive expert recruiting advice, information on the latest hiring trends, and more.