Every business experiences employee turnover no matter the industry. Retaining talent and keeping staff on board is key to business growth and development, not just financially, but culturally too. So take steps to reduce or manage your turnover, especially if your business is new and still finding its feet.

Employee engagement is key to creating a sense of purpose and belonging in the workplace, which will reduce turnover by a country mile.

Use these six strategies to stop your existing turnover problem or prevent one from happening in the future.

What is Employee Turnover?

Employee turnover measures the number of employees who leave an organization over a given period, usually a year. It refers to the rate at which employees leave your organization, and it can be categorized into two types: voluntary and involuntary turnover.

With voluntary turnover, employees resign on their own accord, and in involuntary turnover, you as an employer terminate the employee agreement.

High employee turnover can lead to significant costs and disruptions, affecting everything from productivity to employee morale. Replacing an individual employee can cost from one-half to two times the employee’s annual salary, making it a critical issue for businesses to address.

Turnover is usually presented as a percentage rate, calculated by dividing the number of employees who left by the average number of employees, then multiplying by 100.

Related: Essential Human Resources KPIs: Key Metrics Every HR Team Should Track

When you calculate employee turnover rate, you must compare your number with the averages in your industry. This will tell you whether your organization has a high or low turnover rate.

Why is Increasing Employee Retention Important?

Low employee turnover is typically a positive indicator for your organization, while high turnover is often seen as a negative.

Companies with low turnover rates generally enjoy better reputations as employers compared to those with higher turnover rates. However, high turnover can negatively impact your ability to retain remaining employees, as they may be loaded with additional workloads from their departed colleagues.

So, as you can see, you must address these challenges to maintain a high morale and foster a strong company culture that supports employee retention and reduces turnover.

What are Common Causes of Employee Turnover?

If your employee turnover rate is high, the first thing you must do is analyze the root causes. Common root causes of turnover include job dissatisfaction, a lack of career development opportunities, and poor management practices.

For this analysis, you can use a cause and effect diagram and 5 Whys method.

Many of these shortcomings could be classified under your organizational culture, including a company’s values, career opportunities, compensation and benefits, work-life balance and the effect of senior leadership.

Identifying and addressing these issues can create a more stable and satisfied workforce, ultimately decreasing turnover.

For example, if you find that your employees leave because of a poor work-life balance, you must take specific actions to ensure that your company maintains a healthy work-life balance for its employees.

Now, let’s look at some strategies that can help you decrease your employee turnover rate.

Related: How Certified PEO Services Streamline HR and Compliance

I. Improve Your Hiring Process

The first step to reduce employee turnover is to look inside your hiring process. Simply, start from your own business and try to find some specific mistakes inside the process that can impact on turnover.

A well-defined hiring process will help ensure that new employees are a good fit for the company culture and are more likely to stay long-term.

Recruit the Right Talent

Hiring processes differ by organization, but the main goal should be to make your process thoughtful and selective. Recruiters must be upfront about the company culture and the role’s requirements, rather than simply selling candidates on the position.

So, setting clear job expectations during the hiring can help you ensure that new employees are confident and productive from day one.

Start by clearly defining and communicating your company culture during the hiring. Use job descriptions, company website, and social media accounts to express your core values and characteristics.

Consider inviting a non-managerial coworker to sit on the interview panel. This can provide valuable insights into a candidate’s cultural fit and help ensure new hires link well with the existing workers.

Additionally, invest time getting to know the candidate through various means, such as informal meetings or trial workdays. You can significantly reduce employee turnover by thoroughly assessing candidates and ensuring they align with your organization’s culture.

Look for Soft Skills

Soft skills are key to employee success, and at the same time, something that can impact and reduce turnover.

For example, emotional intelligence, a soft skill, is especially important for managers and leaders as it improves team communication and understanding.

So, first make sure your process includes looking for soft skills, and then you can develop them through training and development programs, which leads to better employee engagement and satisfaction.

Conduct Thorough Interviews

Conducting thorough interviews is key to new hires fitting into the organizational culture and reducing employee turnover.

During interviews, ask behavioral questions that assess a candidate’s past experiences and skills. These questions can give you insight into a candidate’s job satisfaction and alignment to company values.

Also, you can have a standardized evaluation process so you can compare candidates fairly and select the right employees. This careful consideration during the process of hiring will significantly decrease turnover by attracting new employees who are more likely to thrive and stay engaged in the organization.

II. Employee Retention Strategies

There are many different strategies you can use, however, let’s start with these three:

Provide Career Development Opportunities

Every employee has a goal; for most, that goal is job progression and career growth. Most employees are always looking for the next step in their career, and if they feel there is no room to move upwards, there is a much higher likelihood of them looking for opportunities elsewhere.

To avoid this, it’s important that your business makes the progression path as clear as possible. It is up to you to let the staff know what they must do to reach the next step, whether related to sales, revenue, or some other metric. Ensuring employees can see where they need to go is essential for preventing decreased satisfaction and poor retention.

Regular employee feedback through frequent pulse surveys can help leaders stay connected with employee sentiments and foster a culture of engagement throughout the year.

Offer Competitive Salaries and Benefits

Pay and benefits are what get people in and keep them in jobs. Plain and simple, salary is at the heart of employee satisfaction, and as a result, employee satisfaction and retention. No surprise that poorly paid staff are more likely to leave for better opportunities.

To stop this from happening, you need to determine salary ranges that will give you competitive packages for your staff. Simply, you need to compare your current pay system and wages to the industry standard. This will ensure your business is paying staff fairly for their work so staff don’t leave the organisation because of salary.

But this is not a one-off job, you will need to do. You need to regularly check what your competitors are paying for similar roles and make sure you are paying staff what they are worth.

If you want to retain top talent, consider regular salary increases and bonuses.

Offering competitive salaries and benefits is a key to a motivated and committed workforce and ultimately reduced staff turnover.

Employee Recognition

The next important thing you must ensure is that you recognize and show appreciation for your employees’ accomplishments, which contributes to a happier, more productive workforce that is more likely to stay with the organization. Employees who receive recognition only a few times a year from a manager are 74% more likely to report that they do not plan to stay at their organization.

This employee recognition should come through formal means such as an official review process, but also through in-the-moment, peer-to-peer acknowledgment. You can develop and use employee recognition programs, such as employee of the month, quarter, or year awards, simply to show and recognize employees’ contributions.

With the right employee recognition strategies, you not only increase job satisfaction but also contribute to retention and lower turnover. So, create a culture of appreciation and recognition to maintain a motivated and committed workforce.

Training and Development

In a similar vein to the progression paths, many employees continually seek self-development and growth opportunities that help them extend their skill set. The staff that continually do the same work and rarely learn something new or feel challenged often become dissatisfied and feel that they are stagnating in their current role.

Curtail this issue by presenting staff with the platform and opportunity to develop themselves and extend their skills. Not only does this benefit the business by creating a multi-disciplined and talented workforce it also quenches employee thirst for personal improvement and growth; perfect for reducing employee turnover.

III. Onboarding and Transparency

Even this can be seen as something of so much importance, still, everything your business is doing after selecting the right candidate for a job, will be evaluated by new job employees and will impact on their future decisions.

Create a Seamless Onboarding Process

Onboarding is often a first introduction to the organization’s culture. So, a well-structured process can significantly reduce the turnover and in such a way will ensure new hires feel welcomed and immediately integrated into the organization’s culture. Employees who have effective onboarding feel 18 times more committed to their new employer than employees with lackluster onboarding experiences.

Better onboarding, particularly when extended over a longer period, leads to faster time to productivity and helps your new hires align with your overall business’s values.

So, you must ensure that you have a standardized onboarding process, which ensures consistency and fairness before everything else.

Ensure Transparency in Company Communication

Transparency is something that can always strengthen the bond between employees and the organization.

I’ve seen many managers who don’t want to communicate their plans with their employees. In my research, the two most impactful reasons for this are the following:

1. They are afraid of resistance to implementing the plans. In this case, the managers think that they will more smoothly implement their plans if their team members don’t know what will happen.
2. They are afraid that some of their team members will take over their position and advance more in their career, or they will lose the power of their current competencies.

So, ensuring there are regular town hall meetings, surveys, and one-on-one meetings is an effective way to facilitate open communication and improve employee engagement.

Set Clear Expectations

From the very beginning of your employees in your organization you must ensure that you set clear job expectations during both the hiring and onboarding. Clear job expectations set during the hiring can prevent early resignations.

What you will want if you are in this situation. To know clearly what is expected from you, or to not know?

IV. Work-Life Balance

Many employees struggle with work-life balance and burn out and leave for a new job. Feedback reveals that employees often leave jobs due to poor work-life balance. To fix this you can offer flexible scheduling and remote work options which are great ways to help your employees have a healthier work-life balance.

Employee Wellbeing

By putting employee wellbeing first, you can improve engagement and create a culture that supports employees.

Also by using employee feedback, you can identify areas for improvement and make changes to support wellbeing.

Remember, engaged employees stay, implementing these initiatives will get you a motivated workforce.

Flexible Scheduling

Flexible work isn’t just telework or remote work. It can be flextime, a compressed workweek, part time schedules or job sharing where employees rotate their days working from the office.

Also encourage employees to take regular breaks and use their paid time off to maintain a work-life balance. These initiatives create a positive work environment.

Wellness Programs

To support employee wellbeing, offer wellness programs such as employee assistance programs, mental health resources, or fitness classes.

Offering wellness programs, flexible scheduling, and a positive work environment are the ways to reduce employee turnover.

V. Employee Engagement and Feedback

Analyze Existing Turnover to Find Issues

Collecting, analyzing, and acting on turnover-related data in real time is crucial for retaining top talent and improve employee turnover. Data analytics can help you identify specific trends and patterns in employee behaviour, which will help you develop specific strategies to reduce your turnover costs.

In order to collect data, you must conduct employee engagement surveys. Also, employee satisfaction surveys and exit interviews are another effective way to collect feedback from your current and departing employees. This feedback can provide you with the real insights into the reasons behind employee departure, whether due to voluntary or involuntary turnover.

HR professionals can easily address all the issues if they understand the turnover root causes, the employee engagement level, and the overall employee experience. In such a way, they can improve organizational and individual employee performance.

This proactive approach will help you not only to retain your existing employees but also create a conducive work environment that attracts talent and ambitious employees who align with your organization’s values.

Perform Regular Performance Reviews

Regular performance reviews are crucial for fostering employee growth and development. You can conduct performance review for individual employees and then group, departmental and organizational.

The important thing here is to have a standardized evaluation process, that will enable you to fairly compare your employee performance across the board.

Remember, this is not about punishing low-performing employees but about improving the entire employee experience. Also, you can use these performance reviews to recognize and reward employees.

So, provide constructive feedback and set actionable goals for improvement, and you will see how it will increase retention rates. When they improve themselves, you will also increase overall employee happiness working for your company, and happy employees mean engaged employees.

Related: Employee Engagement: 13 Proven Strategies for Your Company’s Success

VI. Company Culture

Finally, business culture plays a fundamental part in retaining talent and keeping employees on board. At a fundamental level, if staff do not like their working environment or do not enjoy being at work, they are much more likely to leave. Workplace culture defines how the staff is expected to behave at work and impacts hiring practices and the general atmosphere.

The right companies will create a culture that centers around their business goals and vision whilst simultaneously promoting honest communication and transparency. Craft your business’ culture carefully, and you will see a noticeable drop in employee turnover.

Reducing Employee Turnover FAQs