Employee turnover costs businesses a lot of money. It is costly, disruptive and ultimately it hurts the company’s bottom line.
Some estimates suggest that it could cost as high as twice the employee’s salary to find and train a replacement.
In addition, there are recruiting expenses, training expenses and your own time as you interview new candidates. It also results in a workforce lacking in expertise.
Employee turnover can be very dangerous for a business. How can you reduce it?
Reducing employee turnover actually starts with the hiring process. There are management aspects to consider as well. Some turnover is natural; people move on for better opportunities and to explore other things. While some find themselves misfit, no matter how hard you try to keep them, once they make their decision it is impossible to retain them.
How can you keep your good employees happy? By giving them a raise? Providing them with bonuses and perks? Offering promotions? The question is how long these resources will work.
Discussed below are some very important tips that will create a place where employees will want to work. Hence, you will reduce employee turnover efficiently.
- Hiring The Right People – The best way to reduce employee turnover is to hire the right people from the start. Recruiting should be done through behavior-based testing and competency screening which can assist in selecting the right people. Interview candidates carefully, define their roles clearly, ensure that they have the required skills and determine whether they will be able to fit with the company culture and co-workers.
- Develop People – One of the major key factors behind the success of an organization is employee development. Organizations that focus on employee development enjoy higher employee satisfaction, which leads to lower turnover. It is only possible if each employee has a concrete development plan that is reviewed on a regular basis. It must offer a variety of opportunities to grow. As a result, no employee would ever think about leaving the organization, let alone look for other opportunities.
- Compensate Properly – In my opinion, this factor makes or breaks the organization. Equitable compensations and benefits should be set, keeping in mind the current economy, market and inflation rate. Make sure your pay rates are up to date with that of current market salary rates. Be creative and offer your employees comprehensive benefits with components like life insurance, a bonus structure and flexible work schedule. Don’t forget to review packages at least once a year.
- Offer Rewards On Good Performance – Encourage your employees to do their best and show them that they are valued and appreciated by offering rewards on their performance with bonuses, perks or a pleasure trip on company’s expenses. This will help boost the morale of other employees as well and encourage them to do their best as well. This will also enhance productivity and lower the employee turnover.
- Build Trust – One of the core values of every successful organization is to have a sense of trust between employees and management. A trusting environment is a productive environment. An organization cannot survive for long if there is an enmity and lack of trust between co-workers, co-managers or employee-manager. Every employee should consider his co-worker a valuable asset. The same way, every manager should trust their employees and treat them equally. This will lead to a happier work environment where no employee would even think about quitting.
If you treat your employees wonderfully and equally, you will definitely reduce employee turnover. Follow the points mentioned above and you will have a team of dedicated employees working with you very soon.