The employment landscape has changed significantly over the past 20 years.
Gone are the days when employees will stay with one employer for most of their working career. In 2019 employees have more options than ever with the ability to switch employers, or even industries, with ease and are expecting their workplace to not just to be a regular pay check but also meet a range of personal and professional goals.
A recent survey by Robert Half clearly shows staff turnover rates have increase massively over the last three years with 15% of Australian employees likely to seek a new job with the next 12 months. In fact 67% of Australian employers say turnover rates are growing fast!
That means on average Australian business can expect a workforce turnover of at least 15% every year. The turnover rates for certain industries like hospitality can be as high as 50%!
Quite simply, employee turnover costs businesses big time. A recent research project estimated the real cost of each employee that leaves is $4,129!
High levels of employee turnover can also cause havoc on company cultures and productivity - especially if the most talented employees leave. Businesses need to consider the impact of departing employees and manage it carefully.
It should be fairly obvious that retaining employees should start with hiring the right people. Unfortunately many recruitment decisions are rushed or completed by poorly trained interviewers who often make the wrong hiring decisions.
It is vital to take the recruitment process seriously, ensuring that only employees with the right skills and personality traits to match your business are taken onboard. If new hires are not the right fit, it's guaranteed they'll leave you to find another job that better suits them.
As business owners and manager, you are always better off taking your time and carefully vetting candidates to find the best employees for the long term that will commit to the company and grow with it.
These days most employees want a job that will enable them to grow personally and professionally. This is especially true for top talent who are eager to take on new responsibilities and see a clear path for progression.
The best employers with the lowest employee turnover, meet regularly with employees to discuss their individual professional goals and outline steps on how these goals can be achieved within the business. Employers needs to think about what resources can also be offered such as training programs and formal mentors.
Whilst it's not always about the money, ensuring your business is paying its employees at or above the industry average is a vital consideration that must be reviewed on a regular basis.
Recently, a Glassdoor survey revealed that 45% of employees who quit a job noted salary as the main reason. This was closely followed by other factors such as professional development, location, flexibility etc however pay was the most important reason.
This being said, running a profitable and financially viable business can be tough at times. It is important for operators not to put financial stress on the business by unrealistically increasing salaries when it can't afford to as this could result in no jobs for anyone :( Instead, it's best to ensure your business is at least offering employee salaries and benefits that are comparable to similar organisations in the area.
We all like to feel like we are recognised for doing a good job. All of us.
Ensuring you have a clear approach for employee recognition will greatly assist retention rates. Quite simply when employees feel that leaders notice and truely value their hard work they will not only feel motivated to keep going but also a sense of loyalty to the business.
Whilst financial recognition such as pay rises and bonuses are great, sometime just a public "thank you" means a lot more and has a longer lasting value.
The quote "people leave managers not companies" is often the truth. A job can be exciting and well paid but if an employee doesn't feel respected, understood or valued by management, resignation is usually the inevitable outcome.
If your organisation has turnover problems, it could be time to review how you and your managers handle day-to-day leadership and conduct an honest self reflection of how you can all step up.
A recent survey by the Society for Human Resource Management (SHRM) showed that turnover rates can be reduced by up to 15% by conducting regular performance reviews.
Whilst day-to-day on the job feedback is great, it is recommended that managers schedule a one-on-one formal feedback session with all employees once every six months. These sessions are great to check in, discuss performance and set goals. Well run performance reviews will leave your employees feeling motivated and valued and you will notice a massive improvement in productivity and retention.
You can do all the right things outlined above but some employees will still leave. This is life. Sometime the reason could be outside the control of the business - such as relocation, health or career change reasons. Regardless, having a formal exit interview with every employee who resigns will provide invaluable insights into how retention rates can be improved.
Employees tend to be a lot more candid in exit interviews than at any other time during their employment which makes these sessions a great way to get to the root cause of issues and find solutions and improvements that can be implemented back into the business.
So there you go, seven actionable ways management can help reduce employee turnover in any business. If implemented well, these tips will also improve your bottom line and greatly increase morale and productivity amongst your team.