Reducing Employee Turnover & Improving Employee Retention
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.
- Align your compensation package with industry or regional standards
- Empower employees to succeed
- Choose the right managers
- Hire candidates who fit the job and your culture
- 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
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.