Reducing Employee Turnover & Improving Employee Retention

Hiring manager shakes hands with a new employee.

Do you know how much money employee turnover costs your company? The Society for Human Resource Management found that employers typically need to invest the equivalent of six to nine months of an employee’s salary just to identify, interview and train a suitable replacement.

So, if you’re replacing an employee with an annual salary of $50,000, it could cost you anywhere from $25,000 to $37,500 to fill the position and on-board the new hire. Remember, that’s for one employee.

This is why it’s so important for all companies, regardless of industry, to develop effective strategies for reducing employee turnover and improving retention. If you aren’t already doing these five things, there is no better time to start than right now.

  1. Align your compensation package with industry or regional standards
  2. Empower employees to succeed
  3. Choose the right managers
  4. Hire candidates who fit the job and your culture
  5. Don’t rush the hiring process

Now, let’s explore each of these tips for improving employee retention and reducing turnover.

1. Maintain a Competitive Compensation Package

Believe it or not, reducing employee turnover isn’t always about offering the highest salaries. As long as your salaries and other benefits are reasonable for your industry or your geographic location, improving employee retention often comes down to inexpensive “perks” that have high perceived values.

Consider adding the following perks to supplement employee compensation:

  • Casual dress options
  • Gym memberships
  • Work-from-home privileges
  • Flex-time

2. Empower Employees to Succeed

There has been a lot of fuss over the millennial generation and what it is they want most in a new job. Forget the stereotypes. A survey of 1,500 millennials by Qualtrics-Accel found the number one thing that keeps them happy on the job is… sufficient training. That’s right—more than anything else, millennial employees want to know they’re doing the right things and contributing to a greater purpose. Companies that maintain open lines of communication, encourage employees to ask questions and offer opportunities for professional development are the ones with the best retention rates.

3. Choose the Right Managers

It’s been said that employees leave managers, not companies. So if you’re looking for ways to reduce employee turnover, start by taking a good look at your management team. According to CarreerBuilder, only 32% of people actually want a leadership role in the first place. In light of that statistic, it’s no wonder that improving employee retention is impossible without improving your managers.

4. Hire Candidates Who Fit the Job and Your Culture

Many employers think the most important factor to consider when hiring a new employee is whether or not he or she has the skills to do the task at hand. Equally important, though, is how well the candidate will assimilate to your corporate culture. A great fit in this area can actually make up for any shortcomings in the person’s skillset.

On the other hand, a cultural mismatch isn’t going to be good for anyone. The new hire will probably feel uncomfortable and may even come to resent you, the company or your happily employed team members.

5. Don’t Rush the Hiring Process

It can take a long time to find a candidate who has the necessary skills and who fits your corporate culture. Unfortunately, time isn’t always a luxury at your disposal. This is where a staffing agency like Labor Systems Job Center can help. We can save your time and your money by delivering employees who are prepared to hit the ground running. Learn more about the industries we serve, or contact us today to get started.

Using a Staffing Agency to Hire Employees: 4 Quick Tips

Young startup executive calls a temporary staffing agency for help filling new and vacant positions.

Remember, you’re not necessarily looking for the agency that can fill your positions the fastest or the cheapest. You’re looking for a partner.

Companies team up with nearby staffing agencies to cover unexpected leaves of absence, seasonal spikes in demand or to fill vacant positions created by employee turnover. Unfortunately, the decision to work with a staffing company is often rushed—driven by an immediate need to find quality employees at a moment’s notice. In a pinch, there’s nothing wrong with this. But there is a better way to use a staffing agency to your advantage.

Tip 1: Be Proactive about Your Current and Future Staffing Needs

Employees get sick. They go on vacation. They take maternity leave. They get promoted within your company. Although you may not be able to predict exactly when these events will occur (wouldn’t it be nice if you could?), you can set yourself up to deal with these vacancies more efficiently with the help of a staffing agency. Start by making a list of the positions you need to fill right now and any positions likely to open up in the near future. As you begin to reach out to staffing agencies near you, a list like this can help you find a great match for your unique needs.

Tip 2: Ask the Right Questions during Your Search for Temp Agencies

If you’re using a staffing agency to hire employees, don’t let your desire to fill open positions quickly lead you to make an uniformed decision. By asking the right questions—and getting the right answers—you can help ensure the staffing agency you choose is a good fit right now and six months from now.

Tip 3: Maintain Open Dialogue with Your Staffing Company

A great staffing agency will do whatever it takes to find qualified, trained employees who are ready to hit the ground running for your company. However, that doesn’t mean every employee who comes your way is right for the job or your environment. This is why it’s in your best interest to let your agency representative know if things just aren’t working out with an employee. The reverse is equally important. The more your staffing agency understands what you prefer to see in an employee, the easier it will be to fill your future positions.

Tip 4: Find a Staffing Partner, not a Staffing Vendor

One way to separate the best staffing agencies from the rest is to pay attention to how they speak about their pool of employees. Do you get the sense that they truly value their employees, or do they seem like commodities? Are they interested in understanding your company, your goals and your pain points? Remember, you’re not necessarily looking for the agency that can fill your positions the fastest or the cheapest. You’re looking for a partner that is interested in forming a mutually beneficial relationship with your company.

Reliable, Flexible Staffing Solutions for You

We’ve been in the temporary staffing business for more than two decades, and we’ve learned a thing or two along the way. Most importantly? Temporary staffing works best when both parties understand how to get the most out of the relationship. No matter who you choose to partner with, we hope that’s exactly what you find—a true partner. Give us a call to see if we’re the right solution for you, or fill out our form for more information.