Employee turnover rate should be of major interest for every business owner who wants to achieve success. A high turnover rate can have significant costs and negative impact for the entire company in many different ways. A few of these are:
- There are a ton of hiring costs associated with employee turnover. It can cost a company over thousands of dollars – sometimes even tens of thousands! You’ll have to spend money in advertising, recruiting, and training among other things just to replace the worker.
- The company will lose productivity during the time where the worker has left and there’s a search for a replacement.
- When you have a high turnover rate, this can negatively affect the morale of the remaining employees.
- In addition to the morale of the employees, the extra work will likely have to be tasked to them while a replacement is being searched for. This can cause extra stress for the workers and also extra costs for the company as they might have to get paid in overtime work.
Seeing how detrimental this can be, let’s look at some management tips on how to reduce employee turnover.
Hire the Right People…
The best way to reduce employee turnover is by picking the right people from the start. You’ll want to put more time and effort into interviewing candidates to make sure that they’re the right fit for the job. This doesn’t solely mean finding someone with the best skills for the job; this also means finding someone who will mesh well with your company and current employees.
…And Let Go of the Wrong Ones
While it seems counterproductive to mention firing people when the goal is to reduce employee turnover, it’s actually the right move in the long run. Bad employees doesn’t equal poor work performance – they may actually be great workers! You may want to dig deeper and take a look at things like attitude or leadership skills. The problem with bad employees is that they can ruin the culture of your company and drag down the morale of your company’s other workers.
Make Sure Your Employees Are Compensated Fairly
You should work with human resources to determine what’s a fair and competitive price for someone performing the task you ask of them. If you’re not paying your employees at a comparable rate, then it won’t be a surprise when they leave you in search of more money. You’ll lose out on money anyway because of the employee turnover, so it’s best to make your employees feel like they’re appreciated for their work.
Allow Opportunities for Growth and Advancement
One of the things employees value most is the potential for growth. Employees need a reason to give it their continued best effort or else they may fall into a trap of complacency. They may feel like there’s no reason to improve their work since there’s no real advantage to doing so. Offer your employees rewards, promotions, or a similar kind of benefit for continued hard work and success.
If your issues with high employee turnover don’t seem to subside, go straight to the source. Ask the people leaving, and your current team members, what you can do to make things better. Showing them you care is significant step in the right direction!