Employee turnover is perhaps one of the most frustrating aspects of running a business. It takes a great deal of time, money, and effort to select and train employees. Then it can take several months for new hires to become proficient in their roles. When they leave, the process starts all over again. Identifying and solving the reasons for turnover can be exhausting. How can we stop the revolving door of employee turnover?
The problem with employee turnover
Most companies experience the problem of turnover at some point. But for HR, it’s a symptom of bigger problems within the organization. Employee turnover can stem from both internal and external issues. On the inside, bad management or corporate policies can influence the attitudes and performance of employees. Disputes between ethics and values can leave some employees confused about the corporate culture. Sometimes, employees just outgrow their role and because they lack any guidance from a superior, they simply move on to another company with better opportunities. This can be positive because it weeds out the least engaged employees.
The bad thing about employee turnover is the lasting impact it can have on other employees who are left behind. It puts pressure on existing employees and reduces morale across the organization. This is something that HR should be monitoring as it can lead to more turnover.
Keeping tabs on employee turnover
There are many ways that human resource leaders can monitor, and thus reduce, the impact of employee turnover on their organizations. Understanding the root causes of turnover has to take priority. Spending time coaching managers about the signs of disconnect, what to do about unhappy employees, and when to alert HR to these issues are all critical first steps. Monitoring employee engagement levels through employee surveys can point to issues. Watching for more serious symptoms like high absenteeism and tardiness can indicate departmental or job specific issues.
Observing the work loads and environments of employees can be done in a relatively short period of time, with realignment of tasks and improvements made to the workspaces of employees. HR should also be conducting regular exit interviews to understand why people leave. This information can help to improve certain processes and departmental issues that are causing people to quit.
Key strategies and goals for decreasing employee turnover
HR has many tools at their disposal when it comes to reducing employee turnover. First, it is absolutely vital to hire the right people for the right job. How is this accomplished? Candidates must be thoroughly screened and evaluated for their suitability for the role and the corporate culture. This takes a few steps, including productive structured interviews. At the same time, organizations need to be more forthcoming with salary and benefit data, a problem that a Glassdoor survey revealed. “More than one-third (37 percent) of hiring decision makers say retention rates would increase significantly if new hires were better informed during the hiring process.”
Secondly, it is important to ensure that the goals of each new hire aligns well with company goals. Some people are happy just to get a job and go-with-the-flow, while others are eager to climb the corporate ladder fast. Be sure to have a clear career path laid out for new hires and discuss this in detail. Use this as a performance guide as new hires are onboarded and trained. Each year, update performance goals and be sure the career path still works for the employee. Assign mentors wherever needed to provide added guidance.
Third, employees need to know they have the support of their managers to overcome obstacles, such as personality conflicts with colleagues, difficult clients, lack of resources, and more. If employees do not feel like anyone “has their back”, there are problems in management that need to be addressed. These indicate even bigger problems in the organization if they are not dealt with. Provide a safe outlet for employees to voice these kinds of issues, with a speedy response to correct the problems. Some companies use real-time employee engagement to direct concerns to HR.
Employees often respond favorably to incentives and perks. What many are seeking is acknowledgement and appreciation for the contribution they make to the success of the organization. Others want to hear that they are doing things well and that they have a future with the company. Employees always appreciate a workplace that values them and demonstrates this on a regular basis with rewarding work, a favorable work environment, great benefits and perks, and a salary that is in line with tasks and responsibilities.
Turning things around – when companies get things right
The goal of any employee retention effort is to keep more employees engaged and productive in their work for as long as possible. It generally comes down to a cost factor. When an employee leaves, it’s estimated that it takes as much as one-third of the departing employee’s salary to replace them with someone qualified. But, as evidenced above, there are many other motivations for reducing turnover.
Companies that have implemented employee retention programs and succeeded are inspiring. Use their stories to produce your own successes.
The popular coffee / cafe business Starbucks Corporation has had its own challenges with employee turnover. Well known for its high level of customer service and quality products, served up in cozy surroundings, it’s no wonder the company has become a global success. However, Starbucks has suffered a high rate of employee turnover in both employees (called partners) (65 percent) and management (25 percent). In recent years, the company has placed a lot more emphasis on eliminating the bureaucracy of a large organization and making sure all employees feel valued. They have a clear communication strategy, small team structures, and great benefits that help employees reach their goals.
Whole Foods has set the bar high in terms of employee retention. By focusing on creating a work environment that helps employees experience happiness and satisfaction, they have created industry high retention rates in the grocery industry. One of their core values includes “Support Team Member Excellence and Happiness”, which they demonstrate by giving employees a chance to make decisions about their work and processes, while encouraging employees to use all their skills.
How do you handle turnover at your company? Let us know if you use any successful strategies to retain your best employees.