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Why is reducing employee turnover important?
In fact, some turnover is good turnover. A C player leaving on their own is not a bad thing for the company. However, most turnover is unacceptable for a company. Reducing your organizations employee turnover is a vital factor in saving your company thousands (if not millions) of dollars, as well as maintaining an environment that supports employee productivity. This is probably not the first time you have heard that turnover can affect your company’s bottom line (i.e. our blog post on this very topic.) One of the greatest pain points for organizations (and we hear this all the time) is the need to reduce turnover. And in our opinion the impact of turnover goes well beyond the monetary costs. No one benefits when someone turns over in a job. It creates problems within the culture of the organization, and there is a huge social impact on the individual leaving a job. The more companies do to reduce the amount of turnover they have the better off everyone will be.
There are many factors that can attribute to turnover in an organization but there are also some sure-fire ways of reducing turnover.
6 Effective Steps to Reduce Employee Turnover:
1. Use Assessments in Hiring Process
Reducing turnover starts with finding the right person for the job/company. Therefore, consider your hiring process. As we have recently mentioned, high turnover is a sign that your organization would benefit from pre-employment assessments in your hiring process. Determining how well someone will do on the job and hiring the right person the first time is an essential part of keeping turnover low. Job assessments come in several forms such as academic requirements, technical skills/requirements, soft skills, and job fit. In other words, if our job is to gather nuts out of a tree we can hire turkeys and train them to do the job, but we would be so much more successful if we started by hiring squirrels instead.
2. Conduct Leadership Development
The next step in reducing employee turnover involves an internal look at your leaders. Many people think that turnover is mainly a function of an individual having an opportunity to make 25 cents more an hour at a company down the street. In fact, this is incorrect. One of the top “real” reasons that people leave a job is because of their direct manager. If someone knows, respects, and likes their manager then they are certainly less likely to leave the job versus someone that does not care for their manager. Talent development professionals have several options when it comes to leadership programs but many agree that the 360 Degree Feedback process can’t be beat.
Provide leadership development for your employees and it will come back to your organization tenfold. Offering development opportunities not only fills in skill gaps but it also tells your employees that you care and can be used beyond their current role.
Another notable advantage to implementing leadership development is the fact that it promotes productivity in the workplace. Leaders who understand where they can improve and how they are perceived can become better leaders with positive behavior change derived from the 360-feedback degree process. The effects on an organization when a leader makes positive behavior change can be astronomical. The old saying, “people do business with people they like” is similar to “people like to work for people they like”. They work harder, take more ownership, and become better performers when they feel respected, understand their role/expectations, and feel like they matter to the organization.
3. Focus on Company Culture
The next two steps involve the intangible benefits your organization can offer employees. The war for talent goes on and organizations need to look at all aspects of what they are offering job seekers. According to SHRM, organization leaders and managers should continue to focus on the employee’s needs and expectations to maximize the firm’s chances of retaining the employee. It is also noted that these expectations differ for generations. Millennials tend to focus more on their overall experience in their job, while the older generation looks for job security. It is important to also note that 80 million millennials will enter the workforce in the next 10 years, so it is not surprising that organizations need to appeal to this group. This can make it tricky for companies to retain the younger generation because culture is not exactly cut and dry.
When there is focus on company culture, the rewards are tremendous. According to research done by Deloitte, there is a direct correlation between employees who say they are happy at work and feel valued and those who say their organization has a clearly communicated and demonstrated culture.
4. Offer Flexibility in the Workplace
It is true that the term flexibility can be rather subjective, especially with recent events. Flexibility in the workplace refers to where and when work is done. Providing flexible work schedules and offering remote work promotes work life balance and can make all the difference for an employee. And this too is an expectation of the upcoming generations of employees entering the workforce and may reduce employee turnover.
5. Offer Competitive Benefits
A competitive benefits package is like the icing on the hiring cake. Benefits might just make or break your employee retention, but this does not mean you have to be Google. Circle back to your benefits package yearly and ensure you are maximizing your offering. Also, identify those benefits which may not have a direct cost, yet they have a big impact. and can reduce employee turnover.
6. Act Now
One final step to reducing your employee turnover is to act now! Reducing your employee turnover will save your organization time and money, which should be reason enough to do something about it. If you even take one of the steps listed above, you have already made strides to success.
Related Blog Post: What is a Pre-Employment Test and When Should They be Used?
Related Resource: Best Hiring Practices