Companies are experiencing big and serious issues in attracting and retaining employees. Successful businesses recognize workforce value and constantly employ strategies to hold top talents. Labor cost is increasing, while employer turnover is reducing the business profits. If this trend pursues then corporate ROI will hit the lowest, which is not visible since the 1980s as per a survey report in the US.
What is employee turnover?
It is a metric that measures how often employees resign from a business. It is measured on annual, quarterly, and monthly bases. The turnover rates are categorized into voluntary and involuntary takings. It includes employees leaving a company for multiple reasons like pursuing education, new job opportunities, voluntary retirement, company termination, or layoffs [involuntary].
Healthy turnover rates differ from one sector to another. Every year, a turnover cost hits the US economy by approximately $1 trillion. Besides, replacing an employee costs 1 ½ to 2 times that person’s yearly salary.
Causes of employee turnover
Employees leave a company for several reasons.
- More salary
- Better benefits & compensations
- Career opportunities
- Work-life balance
- Senior leadership issues
The shortcomings are because of company culture, so according to Shawn Finnegan of Utah, it is essential to nurture employee relationships and lower turnover. You can learn about the business-winning ideologies shared by Shawn on Scalar USC Edu Blog.
Reducing employee turnover is crucial because it badly affects business profitability. Hiring people with the correct skills help to reach business goals and expand. However, finding the right talent is a challenge as well as costly.
Helpful tips to decrease employee turnover
Define & develop a corporate culture
Company culture denotes many things. In general, it refers to beliefs and attitudes shared in a workplace, which impact an employee’s experience. Culture defines how much your employee enjoys their roles and responsibilities. According to a survey, 1/3rd of the workforce fear going to work. Culture is crucial to retain employees. Be honest and communicate openly with the new and existing workforce about company ethos as it is and not as it aims to be.
Focus on the employee onboarding process
Recruits need to be introduced to company culture. Poor onboarding experience leaves a dark shadow. Negative experience right at the start can push the recruits to explore new opportunities ASAP. A positive impression motivates the employees to stay longer as well as get productive. The good onboarding process includes pairing the recruit with mentors and allows connections with colleagues in different departments. Check consistently to see how comfortable they are as well as provide resources and support.
Be transparent
Better communication with the workforce is a mantra to increase retention. Senior leaders consistently communicate and update business strategy, which helps to offer great employee engagement and boost their performance. Transparency means allowing people to share their honest assessments regardless of their title and accepting meritocracy. When employees feel that their opinions associated with business activities are valued they get more invested.
Reward and recognize employees, prioritize work-life balance [flexible schedules], develop career paths, allow opportunities to develop via training, and monitor existing turnover rates to identify issues and fix them.