Employee turnover is without a doubt one of the most intense challenges facing most human resources departments.
In a talent short market, one of the first hurdles is to attract the right people to the business, secondary to this is retaining them!
While turnover figures reduced in 2020 (8.5%) to where they were in 2018 (11%), what hasn't been considered in the numbers are employees who would have moved jobs over the course of the pandemic but didn’t due to job insecurity, plus all of the employees demanding more flexibility than their current employers will provide. Together its anticipated that number would be significantly higher.
Retention and turnover are the sum of a number of moments in the employee lifecycle that lead to an outcome. There is not one solution to fix this.
Turnover is the outcome of the big AND small moments that have impact along the way.
So how do we reduce turnover? Here are 10 recommendations to start.
These recommendations are simple and seem like common sense, yet many organisations are missing the mark in this space. Its all underpinned by valuing your employees and understanding the moments that matter to them.
1. Hire the right people
The best way to ensure employees don’t leave you is to make sure you are hiring the right employees to begin with. Build an effective recruitment process that attracts and assess candidates for job and culture fit.
2. Ensure your remuneration and employee benefits are on the mark
In a talent short market, it is especially critical for companies to pay their employees competitive compensation. Evaluate your benefits and remuneration regularly.
Even if your business can't increase pays in this moment, consider other forms of compensation, such as bonuses, employee share offerings, additional paid leave, or future scheduled increases that you could offer and would be meaningful to your employees. Don’t forget about health and wellbeing programs, which can help raise employees job satisfaction. In MetLife’s 2019 Employee Benefit Trends Study, 53% of respondents said they would be more loyal to a company providing health and wellbeing benefits.
3. Reward and recognise good work.
Research indicates that recognition is a huge driving factor in retention. Up to 20% of employees cite lack of recognition as a reason to seek a job elsewhere. While 40% of workers say they would put more effort into daily work if they were recognized for their efforts. Less than 10% of employees think that their leaders and managers adequately recognise their contributions.
4. Offer flexibility
Today’s workforce as seeking a flexible life/work balance (and have broken the 9-5 framework and have demonstrated success through flexibility). A study on Work & Family found that 76% of managers and 80% of employees indicated that flexible work arrangements had positive effects on retention. If you’re not offering employees flexibility around work hours and locations, they might easily leave you for someone who will.
5. Pay attention to engagement
This one sounds obvious, but for too many organisations, they pour energy and effort into collecting and running an engagement survey and it ends with the results presented in a report. To make this worthwhile and a value-add activity you need to put in the effort to taking action based on the results. Actually, building engagement through action and change directly linked to employee feedback. This is a yearlong continuous process.
6. Prioritise employee happiness
Happiness at work is a must, not a perk. Of course this is a challenge for businesses to acknowledge and overcome, as the general happiness not surprisingly decreased from 2020 to 2021.
Studies show that happier employees are better workers, linking well-being to increased creativity and productivity.
When it comes to understanding what truly makes us happy, even our employees can misjudge the drivers of their happiness at work. While people believe compensation is the top predictor of happiness, in reality, the social elements of work are far more important. Belonging is the top driver of well-being and wellbeing, with pay represented in the middle.
7. Make opportunities for development and growth
Employees place significant values on company provided opportunities for growth. According to LinkedIn’s 2018 Workforce Learning Report, 93% of employees would stay at a company longer if it invested in their careers.
8. Improve performance reviews
Performance reviews offer a formal opportunity to build trust, connection and the relationship between leaders and employees. Develop a consistent approach and train your leaders to host a performance review.
9. Communicate your purpose
Purpose is an employee engagement driver. Employee engagement strengthens when employees know how their work contributes to the success of the business. Communicating the vision, values and ‘why’ will help employees and teams find meaning in the work that they do and will increase their sense of belonging and loyalty to your organisation.
10. Demonstrate and cultivate respect
Respect is a free and powerful tool when it comes to creating great cultures and reducing turnover. The benefits of respect in the workplace include reducing stress, increasing productivity, collaboration, employee satisfaction and creating a fair environment.
Employees will leave jobs in which their opinions and efforts are not respected and find organisations who embrace and foster respect.
Conclusion
The average annual turnover rate in 2020 was 8.5% and is continuing to climb. This article has outlined the importance of reducing turnover and how it can be done.
It is important to keep in mind that there are many small moments within an employee's lifecycle which have a major impact on their decision to stay or leave.
If your business does not already do this, we encourage you to review all aspects of your recruitment process, remuneration structure, reward & recognition program etc., as these will help reduce turnover rates and improve overall productivity across your organisation.