Hiring and retaining talented employees is crucial to the success and growth of any business. It might seem relatively easy to replace an entry-level employee, but replacing even one entry-level employee could cost up to 50 percent of their annual salary. Replacing mid-to-senior level employees or someone with specialized training can cost even more.
There are a number of reasons employees might leave an organization. Some leave for better professional opportunities, including a position with more responsibility and higher pay. In other cases, high turnover is a result of poor management and a lack of employee engagement. It’s important to understand the difference and be able to discern whether your organization’s turnover is healthy or too high.
Is Your Turnover Healthy or Unhealthy?
While turnover rates vary by industry, high turnover usually suggests a problem with employee engagement. Engaged employees are generally happier, perform better, and stay with a company longer than disengaged employees. In addition to keeping a close watch on employee engagement, you need to pay attention to where the turnover is highest in your business. High turnover in a specific department could indicate an issue with the leadership.
If your company is consistently losing top performers, it may be a sign of a larger problem within the culture of your organization. Employees can become disengaged when they don’t see opportunities for professional development or when they are not managed effectively.
High turnover among new employees could also signal a problem with the selection, onboarding, and training processes. Some businesses prefer to hire for fit; others hire for skill. Ultimately hiring someone for the right combination of both goes a long way toward ensuring new employees stay on board.
On the other hand, employee turnover is not always bad, and losing the lowest performers in your business might be a good thing. Weeding out those who underperform on a regular basis or who do not fit into your company culture enables you to focus on recruiting better talent. The top performers are most often the employees who are engaged and committed to doing their best work.
Tracking Employee Turnover
Many organizations, especially smaller ones, neglect to track turnover. By not approaching it from an analytical standpoint, these companies may be missing some key insights that could be gained from looking at the numbers. You can’t measure what you aren’t tracking, and you can’t improve what you aren’t measuring. So, the first step to determining whether or not the employee turnover in your company is healthy or unhealthy, is to track the overall turnover, and identify which employees leave the company most frequently and why.
Reducing Turnover Rate
If you’ve determined that the turnover in your organization or a particular department is unhealthy, it’s time to develop a plan for employee retention. There is no way to completely ensure that all of your employees stick around for the long haul, but there are things you can do to keep them around if unhealthy turnover is cutting into your business bottom line.
Employees are often more satisfied and engaged when they are informed and understand their responsibilities within the organization. Use tools that make it easier for employees to communicate, stay up-to-date on tasks and events, and focuses on employee recognition. Slack is a great team collaboration tool that lets you create open and private channels, send direct messages, and even share files. You can also communicate more effectively throughout all levels of your organization by creating a monthly email newsletter to report company changes or having regular departmental meetings.
Say “Thank You”
Don’t underestimate the power of something as simple as thanking employees for their hard work. One study found that 58 percent of workers would like to hear “thank you” more often, and 54 percent of employees felt unappreciated altogether. Thanking your employees isn’t just about sending your employees a quick thank you email. Use tools such as recognition software to make employee recognition social so other members of the team can participate and recognize each other. Not only does this spread goodwill throughout the company and facilitate a culture of gratitude, it also demonstrates the kinds of actions your company values.
Invest in Your People
You invest a lot in your products to ensure they’re the best and most wanted on the market—it’s even more important to do so with your employees. Promote and foster development within your workforce just as you would a new product line. Encourage employees to seek training and education for both their personal and professional development. Research indicates that the cost of employee development is much cheaper than the cost of turnover.
Good leadership, engagement, and recognition are the name of the game when it comes to employee retention. While fair compensation is often an important factor for choosing a job, it’s rarely the solution for reducing high turnover. More importantly, employees want to be recognized for their efforts and feel valued as both employees and as people.