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Employee Retention: Why and How to Reduce Turnover

Posted: May, 29, 2019 | Categories: Building Industry News

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After years of experience in the staffing industry, the team here at JWilliams Staffing has learned the importance of onboarding great talent & keeping them on board. Simply put, if you want your business to be successful, hiring and retaining the best staff is crucial. Despite decades of research and advancement, many companies have perfected the art of hiring the perfect candidate. However, many still fail to be able to keep that candidate.

In many cases, companies struggle to retain a strong employee who inevitably chooses to leave the company; this is called “voluntary turnover”. Voluntary turnover has a negative impact on company revenue, productivity, and employee morale. Once that candidate is gone, replacing them is time-consuming and costly for both you and your company.

The best way to protect yourself and your company from the losses of voluntary turnover is to prevent it in the first place, but how do you prevent turnover? Here at JWilliams Staffing, we’re all about staffing and employee retention. With 15+ years of experience and extensive research, we’ve come up with a list of ways to reduce turnover. First, we’ll dive into why it’s so important to do so.

 

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Cost of Turnover

 

The Center for American Progress found that losing an employee can cost anywhere from 16% to 213% of an employee’s salary. Things such as temporary replacement, severance pay, cost to advertise, training, etc. can all factor into the cost of turnover. So say a highly trained employee made $60,000 a year, your company could lose up to $127,000 if that employee chose to leave the company.  

Curious about the true economic cost of losing your employees? The Aspen Institute put together this cost of turnover calculator.

When an employee leaves a company, it doesn’t just hurt the company economically, it affects everyone and everything related to the company, including clients. From loss of productivity to damaging the company culture, voluntary turnover has a critical impact on the entire brand. If an employee’s job duties are passed on to other employees when they leave, those employees can become overworked, slowing down production and causing unnecessary errors. Once a replacement is found, according to business expert, Josh Bersin, it then takes a new employee up to TWO FULL YEARS to reach the same level of productivity as an existing staff member. In addition, when an employee chooses to leave the company, especially if it was for a negative reason, rumors start to spread and employee morale takes a dive. It is harder to maintain a productive and positive work environment when employees become uncertain about the company they work for, which is why you should implement these 7 best practices to reduce turnover.

 

How to Reduce Turnover

 

1. Hire the Right People

The best way to keep your employees on board is to hire the right ones in the first place. Yes, it’s important to hire employees with the best skills and experience; however, you should also be looking to hire someone whose values align with your company’s culture. Too often, companies will go with the candidate who has the best background but they end up clashing with the company’s culture; this is what is called the “cultural misfit”. Instead of hiring based on skills, background, and experience alone, look for candidates whose goals, personality, and adaptability align with your company. Otherwise, you might end up with a cultural misfit walking out the doors in a few months. 

 

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2. Show your Appreciation

A survey by OfficeTeam found that nearly half of workers would voluntarily leave their position if they did not feel appreciated by their manager. When your employees do something right, show your appreciation. When they finish a large/difficult project or submit a project before the deadline, congratulate them. Even better, acknowledge employees’ accomplishments in team meetings or group settings so everyone can get in on the excitement. When you show employees that they are valued and appreciated by offering them recognition that celebrates their successes and their efforts, they will be much more likely to stay on your team.

 

3. Have Motivating Performance Reviews

Every company should have performance reviews. Whether it be quarterly or annually, your employees want to know how they are doing and where they can grow. If there are some problem areas, give them helpful advice on how they can improve and encourage them to continue improving.  If they’re doing well, recognize their excellence with new opportunities for growth as well as compensation. Review what they can do or learn to continue growing and advancing with the company.

Take that time to celebrate your employee’s milestones as well. If they worked on a big project that year or that quarter, congratulate them on their success. Having a motivating performance will leave your employee with a positive outlook on not only themselves, but also the company & in-turn will decrease the likelihood of voluntary turnover.

 

4. Competitive Compensation and Benefits

If you don’t pay your employees well in this employee-driven economy, they’ll find a business that will. Your employees need to cover standard expenses such as housing, utilities, and food, but odds are they want some extra in order to feel rewarded for their hard work. As a company, you should research wages for the positions you hire for in your area. Knowing what your competitors pay their employees will help you offer more competitive compensation. Employees don’t just want a paycheck as compensation; they’re looking for benefits as well. From PTO to insurance to a 401(k) plan, you should know the common benefits for the type of positions you hire for and implement them for your employees.  

 

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5. Growth Opportunities & Career Path

If your employee feels like there’s no room for advancement, they’ll start looking for opportunities elsewhere. Employees (or at least the good ones) want to learn new skills and move up on the career ladder. When you show an employee a projected career path, it gives them a sense of direction and purpose within your company. Show your employees that their growth matters to you by offering training programs, having them complete challenging assignments, or giving them more responsibility. You should also try to promote from within your company. Showing your employees there is room for growth will keep them motivated to continue growing and improving their skills (which will only benefit your company in the long run).

 

6. Connect and Engage

As an employer, you should always connect and communicate with your employees on decisions that affect their job as well as overall direction of the company. When you involve your employees in making important decisions on their job, company values, and goals, they will be more loyal to your company. This will also give them a greater understanding of their impact on the company and give them purpose and a sense of belonging.

Your company should also nurture and celebrate your company’s culture. Events such as an annual company dinner, potlucks, birthday lunches, or Halloween costume parties will make your employees feel more involved in your company. Promoting company culture will in turn promote loyalty to your company.

 

7. Conduct Exit Interviews

You can reduce turnover, but you can’t always prevent it. When an employee leaves, the best thing you can do is conduct an exit interview. Exit interviews allow you to receive honest feedback on what the company does that employees enjoy as well as what could be improved upon to increase satisfaction. Ask the employee questions about their experience and what led them to ultimately begin looking for another job and what could have been done for them to have remained an employee. You can find more ideas on what you should ask in an exit interview in Glassdoor’s article on 13 Must-Ask Exit Interview Questions.

 


By JWilliams Staffing

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