Employee retention and attempts to reduce employee turnover have been an increasingly widespread issue over the past number of years. With the shutdown, many returned home, moved out of the city or decided to make a change in their career. With this, came an increase in employee turnover and many businesses have had to rethink their hiring practices and learn how to handle the challenges of having less staff and less skilled employees in the workplace.
It is important that businesses recognise the value of their workforce and constantly review their strategies that will help them maintain these top performers that contribute to the success of the business.
Why Is Reducing Employee Turnover Important?
Today, increasing labour costs and employee turnover are lowering the profits of businesses. If that trend continues, profitability will hit an all time low and it could result in closure of businesses.
Employee turnover is measured on how often employees leave a business, and is typically measured on a monthly, quarterly and annual basis. Turnover rates cover voluntary and involuntary turnover. In other words, it counts people who left the company to pursue new jobs or educational opportunities, for personal reasons or to retire, as well as those who the company terminated for performance or behaviour reasons that were involuntary.
So you now know what employee turnover is, how it’s measured and why it is important. With that in mind, you should now be thinking what can you do to keep high performers within your business? The majority of employee turnover is preventable. Making more opportunities within the workplace such as employee training, introducing a work-life balance, positive and strong manager relationships, compensation and overall well being can make a big difference to retaining employees.
1. Hire the right people
This might seem a little obvious, but truly it is important to get the right person in your workplace. Someone filled with enthusiasm, skills and knowledge to complete the role you’re hiring for. Always ensure that when you or your HR team are recruiting that you are clear about the company’s goals, objectives and values from the start. Avoid telling the candidate what they might want to hear such as the company benefits and perks; don’t get me wrong these are important too, but keep these factors for the later half of the conversation.
Often you will find, especially in smaller startup companies, that they will let a member of staff who is in the same role or a similar role sit in on the interview. This helps the candidate feel more at ease and more likely to ask questions about the role they may not have asked to the higher members of staff. This gives the candidate good insight into the role, whether the responsibilities outlined on the job description are accurate and a chance to learn more about the company culture.
2. Monitoring other jobs and ensuring you’re keeping up with the market and salaries
Keeping a constant eye on the job market to ensure you’re paying the right salary for the role you’re hiring for is a huge factor in attracting and retaining staff. People work to get paid, pay bills, and endure social activities. If you’re not seen to be paying a good level of salary, then job seekers are not going to apply for the role. In addition to this, the opportunity to progress within the workplace and earn a higher salary is another reason employees are happy to stay with the company.
Companies need to offer an appropriate starting salary that will attract qualified and talented candidates. They should also offer regular salary increases and monitor what other companies pay for roles of the same type, especially when it comes to jobs that have an increased labour shortage. Businesses’ should also expect to pay more for those with in-demand skills that are required or for a certain project they are needed to work on.
3. Reward employees for their performance
Employee turnover can be easily avoided through continued rewarding of your staff. Whether this be a simple ‘Thank you’, seasonal bonuses, some glass awards, occasional gift cards to the team or lunch time treats, it’s amazing how these little benefits will make the employee feel. Not only will it make them feel great and appreciated, but they will appreciate you for putting in the effort too. They feel acknowledged and know they are making a difference to the company, which as a result will boost their enthusiasm to complete their work.
This should be adopted from the first day of the new hire, providing them with opportunities to profile themselves, they will truly appreciate it. An employee’s manager has a huge impact here too, providing feedback to encourage the member of staff. A recent survey from Apollo Technical found employee recognition was most important to 37% of employees. Teams scoring in the top 20% of engagement experience 59% fewer turnovers. It is important to have different methods of employee recognition and implement these within the workplace, you’ll see your employee turnover decrease.
4. Employee engagement and performance reviews
Employee engagement is extremely important for keeping employee turnover rates at a low. When staff are engaged with their company and position, they experience a greater sense of loyalty and safety in their role. Salary aside, a disengaged employee is left with very little incentive to stay with their “team”.
Perhaps you could perform annual performance reviews on the engagement of your employees, how they work as a team and how they work on their own. Employee performance reviews are common in a lot of industries, and a staple in large enterprises. I find it surprising when I hear of customers running bars, restaurants and coffee shops not adopting this process; as there is a lot to be gained from it.
When someone asks for your feedback, your opinion, and generally how you are doing – it feels good. When your boss does it, it feels even better. Recognition is a huge contributing factor to employee satisfaction, and engagement.
A satisfied employee takes pride in their job, and their workplace. This increases your brand without even knowing it. Your employee has a good opinion of where they work, adding an appeal to your establishment. Would you rather get a coffee in a café where the baristas hate the place? And are living to leave? Or somewhere where the wait-staff has a joke, a smile, and isn’t googling other job openings elsewhere.
Just think.. Naturally, your employees are going to talk about their job, and place of work. What would you want them to say about it? And about you?
5. Offer flexibility.
The pandemic saw the world basically stop. It give a lot of people the time to rest, take time for themselves and focus on their own personal lives instead of having to worry about work for a while. This has now carried through and many are prioritising their mental well being and health over their job…and so they should! Giving your employees job flexibility is another way to increase job satisfaction and ensure employee retention.
Findstack have found that 74% of workers say that having flexible working would make them less likely to leave a company. Flexible working can include, remote work, hybrid working, the ability to build flexi hours, part-time schedules and more. Having the option to choose is much better than strict organisational rules and is something that candidates will now be looking for on the benefits section of the job description.
6. Culture, culture, culture
Often you will hear that company culture in bigger corporate companies is not overly great, you’re seen as another minion, just there to get the job done and leave. There are little rewards, minimal opportunities to grow within the company and overall leaves employees feeling deflated and results in high employee turnover.
Smaller businesses and startups tend to embrace a more family style culture and results in a friendly environment where everyone is happy to be working there. They feel valued and recognised for their efforts, the downfall here is that employees may outgrow their positions and there may not be opportunity just yet for development.
Culture plays an extremely important role in the workplace. Firstly, a unique culture attracts employees. Often the benefits and culture of an organisation can be highlighted on a job post which can lead to a higher response rate.
As I briefly mentioned above, a positive workplace culture leads to better engagement and retention amongst employees, if all employees are on the same level they work better together and carry out the goals of the organisation more effectively. It has an impact on the attitude the employee brings to work each day.
Lastly, organisations with positive workplace culture are statistically more successful; 88% of employees believe a strong company culture is key to business success. A positive work culture is linked to higher rates of employee engagement, which has been shown to improve productivity and profitability (Builtin, 2021).
I hope these tips will make you rethink your hiring strategy and allow you to review best practices for retaining staff. You might ask, how can Bizimply help?
Businesses may choose to implement a software with the goal of better understanding retention and trying to reduce it. But making a long-term impact on turnover requires a complete view of how to manage your workforce so HR can optimise the entire employee experience, from recruiting to onboarding to performance management.
Bizimply can help through our cloud-based HR system integrated with recruitment software, scheduling, daily task lists, training features and more to bring together all information in one place so you can identify talent trends, and track performance to help employees reach key goals and fulfil company objectives effectively and efficiently.