63.3% of small business owners believe that retaining employees is harder than hiring them. However, the truth is that constantly hiring new employees can cause bigger problems.
Employee turnover leads to extensive costs including, project and service delays, reduced productivity, rehiring and onboarding. On average turnover can cost 21% of an employee’s annual salary. This means that failing to retain employees could be costing your business thousands.
So, how do you reduce employee turnover?
Hire the right people
It is best to tackle turnover from the source: the initial hiring process.
Hiring the right people is difficult. Evaluating experience and qualifications are the basis for most hiring processes. One way you can reduce turnover is by including the company ‘fit’ into the selection process.
Companies with high organisational culture have a turnover rate of 13.9%. Those with low organisational culture have turnover rates of 48.4%.
By expressing your organisation’s culture during the interview process, you will instantly weed out those candidates that are a poor fit. Some ways you can do this could be through workplace tours and introductions to colleagues or processes.
Asking behavioural questions during the interview can give you a good idea of the candidate’s own culture and work habits. This will help you hire a person that will fit well in the business.
Visible career path and Development
A LinkedIn report found that 94% of employees would stay at a company longer if it invested in their career. People want to see that their efforts are valued and that there is room for them to grow.
By helping your employees build up their skills, you improve their sense of accomplishment. This leads to an improvement in their performance at work because they feel more motivated and happier to do their work. Many workplaces benefit from including employees in training opportunities and paying for courses to gain new skills.
To effectively express career progression within a role, you can show employees a career path with clear directions as to where they can advance or pivot.
Including increased responsibility through each role will challenge your employees, leaving them satisfied and accomplished. Providing your employees with coaching on how to progress within their career path will make them feel valued.
The top reason employees are not engaging in workplace learning is due to a lack of time. This means you may need to schedule regular time for employees to focus on self-development.
Competitive pay and benefits
41% of employees consider a significant increase in income very important when considering a new job. Considering turnover is estimated to cost over $3.8 billion within Australia alone, increasing pay will likely save money in the long term.
This can be implemented in several ways.
One way is to offer a competitive salary or provide benefits that other businesses do not. There are many benefits your business could offer to your employees including various insurances, optional leave and incentive programs.
Your employees have their own reasons for leaving. Asking why they’re unsatisfied shows you value them by acknowledging and implementing their suggestions. It also gives you an opportunity to get feedback to learn how to improve things for your employees.
A Qualtrics study shows that workers who feel their employer acts on their feedback are four times more likely to stay with the company.
Another way to implement this is to include exit interview for those employees that are leaving. Providing an opportunity for you to receive feedback and improve processes for next time.
Employees with managers that consistently acknowledge their good work are five times more likely to stay with the company.
The aim is to create an encouraging environment where your employees feel respected and acknowledged. It is important to only congratulate worthwhile tasks, otherwise, it has little meaning.
Showing you appreciate your employees’ work is an effective and efficient way of minimising turnover in your workforce.
Following these tips will create a nurturing workplace environment, reduce your turnover and build more capable employees.