Hiring the right people is a critical part of making your company as strong and effective as possible. But if those employees end up leaving after a year or two, you’re right back where you started - having to hire again, and wasting more money and time on recruitment. Increasing employee retention helps you hold onto those great employees, reducing turnover and recruitment costs.
Even the top companies in the world struggle to keep employees - so what are some damn good, data-backed strategies to reduce turnover of employees? Let’s find out.
Why Reducing Employee Turnover is Important
It’s completely normal to have some level of employee turnover at any organization. Employees retire, change industries, move away, or are let go for poor performance. No industry has zero turnover - it’s just not possible.
But plenty of people leave their employers for avoidable reasons. More than 1 in 4 workers in the US will leave their jobs this year to go work for another company - that’s 42 million people. And 77% of those who quit their jobs could have been retained by their employers.
Avoidable turnover like that means companies are having to spend lots of money on finding and recruiting new candidates, instead of putting in just a little work to keep the employees they already have. Your most talented workers have plenty of job options elsewhere - what are you doing to convince them to stay with you for the long haul? Employees leave companies for many reasons, but they all come down to one simple explanation - their company is not meeting their needs. How can you find the problem and fix it, so your employees stay loyal to you for a long time?
Strategies to Reduce Employee Turnover
Reducing turnover doesn’t need to be a guessing game - let’s look at the top data-driven strategies to increase retention and reduce your turnover rates.
1. Analyze Why Employees Leave
If you don’t know why employees are leaving your company, you won’t be able to develop an effective strategy to get them to stay. First, review the average turnover rate for your industry - is your rate of employee turnover higher than average? If so, you need to get to work.
Implementing an exit interview process for departing employees can give you insight into the real reasons employees are leaving. After all, they’re more apt to be honest when they’re leaving and if you don’t ask them yourself, they might tell the world in a negative review on Glassdoor or another site.
Look at the patterns you see once you’ve started to gather your data. Are you getting feedback from multiple employees on work/life balance issues, manager problems, workplace culture issues, stalled career development, or something else? What is getting in the way of your employee retention strategy? You can’t fix a problem until you can identify it clearly.
2. Choose Your Managers Wisely
Do you know that employees are 4x more likely to quit if they don’t rate their manager’s performance highly? It’s true. And it makes sense - your immediate supervisor has the most impact on your life at work on a day-to-day basis. Selecting your managers carefully, and training them on management skills thoroughly, helps your supervisors succeed, and your employees stay satisfied.
3. Let Go When Needed
One poor performer can drag down a whole team and drive away your top employees. The effect that one toxic employee - who doesn’t perform to standards, makes others uncomfortable, or causes issues regularly - can have on your wider working environment is huge.
Not every employee you hire will end up being a strong fit for the long-term, and that’s ok. But it would help if you took action sooner rather than later to adjust so that you don’t lose the employees who do fit and contribute.
4. Hire The Right Way
Hiring the right people, in the right way, is critical to the success of your organization in many ways. But it’s also important for your retention efforts. Are you hiring people who have the hard skills needed to do the job, but who lack the soft skills needed to work smoothly with the rest of your team? That’s damaging for employee morale.
And are you seeing a large number of employees quit a few months after they’re hired because the job wasn’t what they thought it would be? That speaks to a disconnect you need to fix in your recruitment process. Your job descriptions should be an honest look at your corporate culture and a detailed and accurate view of what the job responsibilities are.
Employees shouldn’t be surprised by the basic aspects of the job after they start - that means you need to adjust something in the hiring process, so you’re attracting the right people from the start.
If your employees sense you’re treating them like children instead of trusted, professional adults, they won’t feel engaged and motivated to perform well. And they’ll look for a job at a company where they feel like they are trusted to know what’s going on.
6. Create Career Opportunities
The top reason employees leave a company is because they don’t see a fulfilling long-term career ahead of them. If you’re not providing regular career development opportunities and a fair system for promotions, employees will get frustrated and start looking elsewhere for jobs.
This doesn’t mean you need to promote every employee every year- that’s not reasonable, and your workers know that. But they do want to know what their career path could look like, to have regular discussions about career progression with their managers, and to know that the opportunities for promotions are clearly stated and fairly distributed.
Career development is about more than just promotions, too. Are you providing employees with regular opportunities to learn new skills or take on new challenges? Don’t be afraid to think outside the box a bit when it comes to career development.
7. Help Balance Work and Life
Employees often leave companies because they feel burned out - their hours are too long, their vacation time is too short and sparse, and they don’t have time to be a complete human being as well as a productive worker. If departing employees tell you in exit interviews that this is the reason they’re leaving, look closely at your policies.
Are you offering less vacation time than your competitors? Are you expecting employees to be available around the clock? Are your employees regularly working long hours? Employees are both more productive and happier when their work and life are in balance, so how can you adjust your expectations to match?
8. Keep Up with Compensation
This seems basic, but too many employers discount the importance of maintaining adequate levels of compensation and benefits for their employees. If you’re not regularly ensuring that your total compensation and your benefits are competitive with other companies in your industry, you provide an incentive for your employees to look elsewhere for work.
After all, employees are working because they need to support themselves, and that’s what a fair wage and competitive benefits allow them to do. Don’t discount this in your quest to reduce employee turnover. And replacing an employee is expensive - raising salaries or adding a few benefits could actually help your bottom line if it reduces turnover.
9. Show Gratitude
One simple thing that has a big impact on reducing employee turnover: recognizing and thanking employees for their hard work. Strategies to reduce employee turnover don’t always have to be costly and big - they can be as simple as noticing when someone has done an excellent job and telling them why you appreciate their dedication and hard work.
You can do this by implementing a formal recognition program. But it’s critical not to ignore the small gestures as well. Employees who don’t feel adequately recognized are twice as likely to quit in the next year - that’s a huge impact on your turnover rates. And 65% of employees say they haven’t received any form of recognition for good work in the last year, so there’s a lot of room for improvement at almost every organization.
Looking to reduce the rate of employee turnover at your organization? That’s a smart move. Your retention strategy doesn’t need to be a guessing game with these nine data-driven ways to reduce turnover and increase employee retention and loyalty. Rewarding and recognizing your employees, finding and nurturing the right people in their roles, and providing career opportunities while allowing for a life outside of work all help reduce your turnover rates and build the future of your company.
At Xoxoday, we deeply understand the intrinsic and extrinsic motivation and engagement drivers of people, be it an employee, supplier, contract staff, gig or consumer. We bring simplicity and continuity to a complex, everyday problem.