It’s a typical scenario for employers to have staff come and go. However, when your company suffers from high turnover rates, it can affect your business negatively. Reducing your turnover rates doesn’t have to be complicated; there are simple and inexpensive ways your company can convince employees to stick around. Read through this guide to know more.
What is a High Turnover Rate?
Turnover rates refer to the number of employees who have voluntarily or involuntarily left your company over a certain period. The rate is considered high if it’s more than what’s expected in your industry.
In 2020, the average turnover rate in the U.S. was 57.3%. The accommodation and food services industry suffered the most with a turnover rate of 130.7%, while the state and local sector, excluding education, had the least with 21.2%.
You can calculate your business’s turnover rate by taking the number of people who left the company during a defined period, then dividing it by the number of employees you have during the start of that period. For example, if you started 2021 with 100 employees and ten people left by the end of the year, the turnover rate is 10/100 = 0.1 or 10%.
Disadvantages of High Turnover Rates
Employee turnovers directly impact a company’s profitability and revenue. Hiring candidates is expensive; you have to budget for recruitment agencies, classified ads, interviews, onboarding, and training. Additionally, high turnovers hurt workplace morale. When other team members see a close co-worker leave, they will likely follow suit.
What to Do If Your Employee Turnover Rates are High
Retaining employees is one of the biggest challenges many businesses face. Here are some tips on how you can hold on to your staff better:
1. Look for and hire the right person
There are times when poor hires cause high turnovers. Recruiters should be upfront about the company culture and candidate’s actual job role rather than telling potential hires what they want to hear. Nearly 30% of workers leave their jobs in the first 90 days; 43% stated they left because their day-to-day role wasn’t what they expected, and 32% felt that the company culture wasn’t a suitable match.
You can improve the success rate of your hires by including peers in that person’s role and getting involved with the hiring decisions. This will allow the candidate to know the company and their potential team much better and vice versa. It can also determine if a candidate is a good culture fit with the business.
2. Provide career development opportunities
Allow your employees to explore new areas of expertise, learn new skills, and improve existing know-how. Here are some ideas on how you can incorporate career development in the workplace:
- Training programs
- Mentorship programs
By providing growth opportunities, employees will want to stay with your company as they aren’t tempted to look for these opportunities elsewhere.
3. Start conducting team building exercises
When many of their colleagues leave the organization, employees may experience low morale, especially when the one who left is a high-performing team member. This can lead to professional networks and friendships breaking down and people feeling isolated.
To help you unite your team members and keep team spirits up, conduct team building exercises. These will help them find their common ground and solidify relationships. Make sure that you show genuine interest with your team; by doing so, the team spirit will naturally develop.
4. Offer a competitive starting salary
Next to benefits, pay is one of the primary reasons workers stay. But, higher compensation can also be why employees change jobs.
If you want to attract talented and qualified candidates, you should offer a competitive starting salary. Monitor what other companies offer for a similar role, then match it. It would be best if you also considered giving regular raises for your employees, especially when they’re identified as top performers.
5. Allow flexible or remote work
As the world moves forward to the post-pandemic era, remote and flexible work has become a desirable option for employees. In 2021, a survey found that one in three workers would quit their job if they couldn’t work remotely after the pandemic.
You can boost retention by offering your team to work remotely or set their own working hours. Employees want the perk of remote work so much that 84% say that continuing to work remotely post-pandemic will make them happier, with 46% willing to take a pay cut of up to 5% if it means that they can work remotely in the future.
Improve Employee Experience
When you don’t take the time and effort to improve your employee’s experience, they’ll start to leave and find a better job elsewhere. The more your workers quit, the higher your turnover rates get, hurting team morale and leading the company to waste more time and money on the recruitment process.
Strengthen your organization by applying the strategies above. When your employees are satisfied, they’ll be more excited to come to work and stay for months or years to come.