Most HR professionals strive to understand their organization’s retention and turnover rates, as they can indicate how satisfied their workforce is and the strength of their company culture.
Turnover can come in a handful of forms, such as avoidable, involuntary, voluntary, healthy, retirement, regrettable and transfers. This concept is usually expressed in a percentage of the total number of employees that leave the company during a specific period.
It can be challenging for enterprises to maintain low turnover, especially with the current workforce situation. Millions of Americans have quit their jobs, causing a phenomenon known as the “Great Resignation.”
According to a post from Gallup, turnover can be costly. U.S. businesses lose $1 trillion annually due to voluntary resignations. Multiple sectors of the economy face ongoing labor shortages, especially durable goods manufacturing, retailers, restaurants, education and health services.
Employers already struggled with employee retention and now have to contend with many more challenges. What steps can organizations take to reduce turnover and keep their most valuable employees?
1. Focus on Hiring the Right Candidates
The old saying, “a chain is only as strong as its weakest link,” still applies today. One way to ensure workers stay with an organization is to hire the right people to begin with. When posting to online job boards, companies should clearly define the roles and responsibilities for new employees and outline potential compensation details.
Employees should have core skills, but they should also align with the culture and beliefs of the organization. Every company has a unique recruiting and hiring process, and asking candidates about their personality and character can help determine if they’d be a good fit. Hiring the right talent can reduce the chances of them leaving.
2. Keep Benefits and Compensation Current
This strategy may seem obvious, but paying employees a fair wage for their contributions to the organization is crucial. Offering competitive salaries and attractive benefits will draw in better candidates with impressive backgrounds and build a dependable workforce.
If a company fails to offer good pay and decent benefits, it could result in voluntary turnover or resignation. The last thing any business wants is to lose top talent to a competitor due to insufficient compensation or a lack of benefits.
3. Offer Flexibility in Scheduling and Work Location
It can be challenging for employers to offer flexible scheduling or the ability for employees to work remotely. However, candidates will consider two valuable factors when deciding which company to work for.
A study from the Boston College Center for Work & Family found that 80% of employees and 76% of managers believe a flexible work arrangement positively impacts employee retention. People who are not granted flexibility regarding work hours or locations may feel more inclined to find an employer that does offer these perks.
4. Prioritize the Three Cs: Culture, Contribution and Connection
Companies should understand how workers from different generations have varying needs and expectations across all industries. For example, Gen Z and millennials value corporate social responsibility (CSR). In contrast, older Gen X employees are driven by financial security and stability. Organizations should follow and prioritize culture, contribution and connection.
Foster a positive company culture, reward and recognize employees for their contributions and support productive relationships between workers. These three pillars can help improve retention and prevent high turnover rates.
5. Provide Career Growth Opportunities
Companies that invest in their existing workforce by recognizing and rewarding their employees with a clear career path can help reduce turnover. It’s an effective way to retain top talent. Today’s modern employee wants to grow their skill set, reach short- and long-term goals, and achieve financial success.
Employees who lack growth opportunities may want to work elsewhere. If a company is not investing in its personnel, why should people invest time and effort there? Try to schedule regular meetings with workers regarding their personal and professional development and overall performance. Adopt a spirit of transparency and keep employees in the loop about potential opportunities within the organization.
6. Cultivate a Culture of Respect
Respect plays a significant role in creating an attractive company culture. All employees deserve respect, regardless of their position. Consider how women in the automotive industry, a traditionally male-dominated field, face sexist and misogynistic behavior from customers and even co-workers. Why would a female worker want to be subjected to this negative culture?
Taking small steps to create a positive, uplifting and inclusive workplace is essential and can help retain employees. Offer them the opportunity to engage in seminars, webinars, workshops or team meetings to encourage positive interactions.
7. Emphasize the Importance of a Work-Life Balance
Organizations can take several small steps to improve their office environment. For example, stocking a kitchen or break room with healthy snacks is easily attainable. This can help boost productivity and creativity and prevent employees from feeling distracted by hunger or sluggishness once the afternoon slump hits.
It’s no secret that employees and employers worry about the negative effects of burnout. The Mayo Clinic describes burnout as a type of work-related stress leading to mental and physical exhaustion. Companies that emphasize the importance of a work-life balance are far less likely to struggle with high turnover rates.
Here are some other methods of supporting employees achieve a work-life balance:
- Offer paid time off (PTO), vacation time and maternity/paternity leave.
- Set clear expectations about work schedules and role responsibilities.
- Sponsor monthly workplace wellness programs.
- Be flexible when employees face life-changing events or emergencies.
- Avoid having people work on weekends so they have time to relax and recharge.
Employ Effective Retention Strategies and Avoid High Turnover Rates
The ultimate goal is for HR departments to optimize their staff, foster a healthy work environment for employees and stand out from the competition in their respective industries. Reducing employee turnover rates offers many benefits, so companies should prioritize it when doing business.
Companies should consider employing the retention strategies listed above. This will help boost employee morale, foster a positive work environment and keep costs down, as losing a worker can be expensive to manage. Maintain an ethical workplace where team members can succeed in their roles, grow personally and expand upon their skills. Doing these things will reduce turnover and make your business a great place to work.