One of the most critical issues businesses face today is how to reduce employee turnover.
Employee turnover is costly and negatively affects the performance of an organization. Not only is turnover a huge financial cost to you, it’s an incredible time suck, distracts from business growth, and has a negative impact on the workplace culture. We’ve all felt the sting of a superstar employee parting ways—the quantitative impact of employee churn can really hurt.
According to a recent report by Glassdoor, recruiting is far more expensive for businesses than retaining current employees:
- It costs $4,000 on average for businesses in the United States to fill an open position.
- On average, it takes 52 days for businesses to fill job opening.
- Forty-seven percent of candidates declined a job offer because they accepted another position.
- Among small businesses surveyed, 47 percent said there were few or no qualified candidates for the jobs they were trying to fill. (Source)
Studies show that employees tend to follow four primary paths to turnover:
- Employee dissatisfaction—they are unhappy with their current position.
- Better alternatives—another company has offered competitive rewards, a better work environment and developmental opportunities.
- Following a plan—some employees may have a predetermined plan to quit for reasons such as a pregnancy or they get a better job.
- Leaving without a plan—employees leave on impulse without a plan in place for the future.
However, instead of focusing on the negative effects of employee turnover, let’s discuss how you can prevent it from happening in the first place.
How to Reduce Employee Turnover
Smart companies will work hard to keep tabs on employee satisfaction and act to minimize turnover. Here’s how to retain employees for the long haul.
Get to know employees beyond their work
It’s important to know everyone who works for you, where they stand outside of work and where they want to be in the future. The more you see them as a real person and teammate instead of just a cog in a wheel, the easier it will be to work together and develop genuine relationships.
Be competitive with compensation packages
People want to be compensated well. Get current data on industry pay packages and get creative when necessary with benefits, bonus structures and flexible work schedules. Always pay close attention to trends in the marketplace.
Provide encouragement and recognition
When employees do something right, give praise and show your appreciation. Show them that you see their hard work. The goal is to create a positive and encouraging work environment. Employees who feel acknowledged, desired, motivated and respected are more likely to stay.
Show them growth opportunities
Employees are most attracted to jobs they know offer opportunities for personal and professional growth. No one wants to stay stagnate in one job for too long. Showing your employees an expected career path will give them a sense of direction and purpose.
For businesses to thrive in today’s economy, always striving to reduce employee turnover and retaining the best employees is important. What is your business doing to reduce employee turnover and improve employee retention?
Positive work culture sustains employee enthusiasm and therefore greater productivity and efficiency. Here Are 3 Elements That Make Up a Great Work Culture.
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