While sales managers know that it costs more to gain new customers than to keep loyal ones, some business leaders struggle to fully see the impact that employee turnover has on their organisations. This article explains.
According to statistics from Organisation Science magazine, a retail worker who makes $8 per hour costs a company several thousands of dollars when he leaves. Besides reductions in productivity, companies lose money on these employees in these three areas: interviewing, hiring, and training.
Here are seven top ways to cut these costs by reducing turnover at your business.
Hire the right people
One of the best ways of reducing employee turnover at your business is to hire the right employees from the start. Begin the process with a published mission statement for your company. This message embodies your organisation’s reasons for existence and its culture. Employees who are passionate about the causes that make your company distinct will likely stay for the long haul.
Use recruitment software to publish clearly written job descriptions that attract the right talent for different positions at your company. A great employee wants to know if their skills match the ones that you need for your advertised job and if the job presents enough opportunities for professional growth.
A Harvard Business Review study showed that about 80 percent of employee turnover is caused by poor hiring decisions. Using skills competency tests to screen potential employees is a good way to reduce the risk of hiring the wrong people.
These tests verify skill proficiency, and they work great for positions that require hard technical skills as well as those that need a range of people skills. You can develop custom tests for your organisation or buy them from certain software development companies.
Offer competitive compensation and benefits
When it comes to staying at a great job, monetary compensation isn’t everything. However, it can motivate productive employees to look for greener pastures in some cases. If it’s been years since you’ve reviewed pay and benefits materials for your company’s positions, you may be compensating your employees inadequately compared to your competitors.
No two workers are the same. Doing personalised evaluations of employees’ acquired skills, experience, and overall job knowledge helps you to know when you should raise your employees’ pay and benefits.
Failing to count increased experience and newly learned skills into an updated compensation package for employees forces them to look for raises with your nearest competitors. It’s important to research your competitors and gain insight into their compensation and benefits packages. In order to retain top talent, you’ll need to offer the same or higher compensation rates.
Flexible work schedules
Besides pay and benefits, flexible work schedules are what many employees most value about their jobs. One popular flexible work schedule option allows employees to work extra time early in the workweek and take Fridays off.
Depending on your company’s offerings, you could also allow team members to work earlier in the morning or later in the evenings at their convenience. Most of today’s web-based time clock software tools support 24-hour access and input from multiple devices such as a smartphone, tablet, or laptop.
Allowing your employees to telecommute also keeps them happy and motivated to stay with your company. Telecommuting saves your workers time, money for gas, and headaches that are related to navigating traffic in busy cities.
Give praise where praise is due
Holding back the praise for a job well done is a sure-fire way to dampen employee collaboration, innovation, and productivity. Many managers want to recognise high-performing team members, but they forget to do so when opportunities arise.
Integrating a formal rewards and recognition program into your corporate operations reminds you to praise employee successes in the right ways and at the appropriate times.
Praise that’s given in real time often makes the most impact with workers. Your employees go the extra mile to do a great job, and your recognition should reflect their efforts. When giving a verbal accolade or a written commendation, use specific details to describe the praiseworthy actions of your employees.
Besides knowing that their colleagues value their work, employees love formal recognition because it helps them to stand out when they apply for higher positions within your company. Some high performing employees may get discouraged if their work ethic and accomplishments go unnoticed.
This may cause high performing employees to surrender their above average work ethics because no-one seems to notice them.
Set accurate expectations
Setting expectations for work responsibilities are critical for employee retention. Imagine that you just hired several people for retail sales at your downtown clothing store. Your existing staff members know that your corporate office discontinued janitorial services for the store due to recent budget cuts.
You expect all sales associates to share the burden of cleaning the restrooms throughout the day.
You never made this expectation clear through a written store-wide announcement. Your new hires may not do their share of the cleaning if they weren’t told about the task before or directly after you hired them. Expectations like these should be formally published and included in employee onboarding activities.
Ensure that your employee’s questions regarding what is expected in their role are answered thoroughly. It may be useful to include role specific expectations in onboarding literature so that they can be referenced at any time.
Nearly all business transactions require verbal or written communication. When these forms of communication are done right, two or more parties understand and respond to messages about company values, customer service, and employee performance. Clear communication takes practice, but you can start by staying on topic and carefully listening to feedback from others.
Technology products such as collaboration platforms, customer relationship management systems, and payroll software makes business communication easier, but face-to-face communication remains a matter of respect for employees who are looking for a reason to stay with your company. Any skilled leader should communicate clearly and in an easy to understand manner.
While the outside world deals with rising rates of depression among the population, you can make your office a happy haven for all by cultivating interoffice connections among your workers. When your employees work with people who they know and like, they are more likely to stay with your company and do their best work.
Promote camaraderie among your staff members by scheduling a fun, team-building offsite event. Interactive escape-room games keep employees mentally sharp as they discover each other’s strengths and shortcomings.
For more relaxing fun, plan a potluck lunch that encourages casual conversation about favorite flavors and recipes. This present the opportunity for employees from different departments to interact with one another.
Whether your company sells appliances or financial services, great employees are the keys to its success in the marketplace. You must cultivate sought-after talent in many cases. The results are increased employee loyalty and morale as well as long-term company profitability. Your employees are, by far, your greatest asset.
If you’re planning to grow your organisation, you will need loyal and talented employees on your team. Furthermore, a low turnover rate instills a company culture of stability. Whereas companies with a higher turnover rate often creates an environment of uncertainty.
About the Author
Christin Cluley aids Chetu in assisting organisations to optimise their workforce systems. Founded in 2000, Chetu is a global provider of customised software solutions and IT staff augmentation services.