Employee turnover rate is something that every business owner and HR professional will experience in their career. When employee turnover rates are high, it creates costly problems for your business. It can be time-consuming and expensive to hire and train new employees. This is why it is important to understand what causes turnover, and how to reduce it as much as possible.
What is employee turnover?
In simple terms, employee turnover is the rate at which employees are leaving your company. Turnover rate is calculated over a certain period of time, typically one year. This includes voluntary and involuntary turnovers. Having a high turnover rate can signify that your company is failing to offer the proper conditions to successfully retain employees. Not only does having a high turnover rate affect a business internally, it can also give your company a bad reputation. Alternatively, having a low turnover rate of 10% or less, signifies that your employees are satisfied in their jobs. Satisfied employees are much more likely to produce high quality work and remain engaged in the workplace. Because it can have an extremely negative impact on your business, it is vital that business owners take the time to invest in strategies to reduce employee turnover rate.
How to Reduce Employee Turnover Rate
1. Hire the right candidates
As an employer, you should always consider the impact a new employee may have on your business. Do not take the hiring process lightly. Assess how a potential employee will fit in with the company culture and work environment. If a newly hired employee turns out to be a bad fit, they will leave the company, therefore increasing your turnover rate. Carefully considering the hiring process is an easy way to ensure you are hiring the right people who will want to work for you for a long time.
2. Provide competitive pay and benefits
Providing competitive pay and benefits is a very effective way to keep employees. Employees are not going to stay in a job where they feel like they are not being compensated properly. A dissatisfied employee will not hesitate to find a new position with better pay. Additionally, pay is not the only factor that will keep employees happy in today’s job market–offering competitive benefits is just as important. Common employee benefits, such as healthcare and paid time off, are great to offer employees, but consider offering other benefits as well. Educational benefits such as tuition reimbursement are becoming increasingly popular and sought-after. Work with your HR department to develop a well-rounded and competitive benefits package for employees to retain employees and reduce turnover rate.
3. Recognize and reward hard work
No one wants to work somewhere they don’t feel valued. A simple “congratulations” or “thank you” after employees complete a difficult project can make all the difference to an employee. Recognizing your employees’ work will create an overall more positive work environment where employees will want to stay. Likewise, praising employees will also keep them engaged on the job, which will trickle down and increase production throughout the whole company.
4. Allow flexibility
One of the most important things to employees today is maintaining a healthy work-life balance. If employees feel overwhelmed at work, they are going to shut down and eventually quit. Allowing employees to have a flexible schedule that works for them is directly influential to your turnover rate.
5. Create opportunities for growth
It is a common complaint among employees that they feel “stuck” in their role, or that they lack the opportunity to move up in the company. This will lead to employees quitting to find a job that they believe is better suited toward their skills, increasing your turnover rate. Allow your employees to grow in your company and utilize their strengths.