How to Reduce Employee Turnover and Improve Retention
The article discusses how businesses must go beyond pay to reduce employee turnover by fostering valued, balanced, and growth-oriented work environments, especially in light of the Great Resignation where factors like poor treatment, lack of benefits, and work-life imbalance led over 47 million Americans to quit their jobs, causing significant financial and productivity losses.
Having an excellent business strategy and brand image won’t be enough to maintain a stable organization. When running a business, it’s easy to get caught up in focusing on annual targets and strategic theories, sometimes forgetting one of the most important facets: the staff.
Companies often strive to hire and retain employees who will stay during both hard times and good. Unfortunately, pay alone won’t cut it anymore. Obtaining a loyal relationship with your hires requires give and take; benefits should go both ways.
To facilitate a dedicated workforce, it’s essential to implement proactive and purposeful processes that nurture your employees and make them feel valued. But why is employee retention important and what can your business do to protect against high attrition rates?
The Great Resignation
“The Great Resignation” refers to the sudden boom in employee resignations that took off in April 2021. According to the Bureau of Labor Statistics, over 47 million Americans quit their jobs voluntarily, putting substantial financial strain on businesses, primarily in the U.S.
Contrary to popular belief, the effects of the pandemic didn’t play a primary role in this mass departure. A Joblist survey found that it was actually unhappiness regarding how companies treated their staff in response to changing conditions (19%), alongside other key factors such as lack of pay or benefits (17%) and limited work-life balance (13%).
The newfound ability to work remotely and embrace a better work-life balance has driven workforces to explore new opportunities. With this recent liberation, employees have started to demand more from their employers, combatting issues like:
- Toxic working relationships
- Negative company culture
- No growth opportunities
- Lack of recognition for contributions
- Expected — but unrewarded — overtime
A recent study by Gallup estimates that employee burnout results in $322 billion in lost productivity and turnover. These decreasing workforces should serve as a reminder that the importance of employee well-being and satisfaction can’t be overstated. That’s why it’s important to identify ways your business can directly address this problem and mitigate high resignation rates.
7 Methods to Enhance Employee Retention
To help you form a robust plan of action, here are key ways your organization can protect against a fragile workforce.
1. Identify Turnover Patterns
To understand where the issues lie in your organization, assess potential patterns in your turnover rates. This could outline a particular time of year or event that causes employees to leave. Here’s how you can work this out:
First, calculate the average number of employees within a certain time frame:
Average number of employees = (Number of employees at the beginning of set time frame + Number of employees at the end of set time frame) / 2
Then, use the following formula to uncover your turnover rate:
Employee turnover = (Number of employee departures / Average number of employees) x 100
Gather constructive criticism from current employees to identify key areas to improve. Also, ask for feedback from new hires during onboarding so you can act on problems promptly and refine their experience.
If you’re aware of any returning individuals in your company, ask what drove them to resign. Consider employing exit interviews to gain honest insight as well.
2. Offer Flexibility
The standard nine-to-five schedule can pose an immediate red flag for employees in the modern era. Trusting your workforce to work a flexible schedule can show your company’s compassion and understanding of their personal needs. Consider implementing the following practices:
- Flexi-schedule: Employees set their own working hours, e.g. 10am to 6pm.
- Remote work: Workers can work outside the office, preferably at home.
- Job sharing: Two or more people work part-time to fulfill one full-time job role.
3. Provide Growth Opportunities
If you don’t offer clear pathways for development, your workforce may search elsewhere for opportunities to move up. Supply skill-based training workshops and leadership development programs to promote growth and retention within your organization.
Educational opportunities are valuable for both standard employees and managerial positions. Regular leadership training for managers can contribute to overall employee retention by ensuring management is equipped to build and maintain a motivated, supported workforce.
4. Review Pay and Benefits
If your compensation packages remain static, you may offer outdated benefits and pay low salaries for your employees’ expertise. While pay and benefits aren’t typically the primary cause for attrition, they can contribute to the final decision to leave.
Regularly review market-leading salaries to compete with businesses in your sector. Update your benefits package to align with modern working demands, such as flexible working hours. Advertise these perks to your workforce and potential new hires.
5. Recognize Your Teams’ Efforts
Employees become motivated when they have something to work toward, whether that be a purposeful mission or recognition. Companies with an established culture and reward practices boost their chances of maintaining an enthusiastic and driven workforce.
Inspire staff members by encouraging them to take on new projects and recognize them for good performance and hard work. Employees who feel stimulated by their tasks and appreciated for their efforts are more likely to stay.
6. Organize Team-Building Activities
Ensure that employees can effectively interact and collaborate by incorporating team-building opportunities that foster communication. This may help new hires integrate, let current staff build stronger relationships, or alleviate tensions that might impact work performance. Activities could range from a team lunch to a day outing.
7. Invest in Your Onboarding
Boost retention by nurturing the employee journey of your new hires, ensuring they’re equipped with the tools, information, and support they need to settle in. Make sure your onboarding lasts longer than one week to establish thorough training and provide ongoing support. Enhancing your onboarding process will help you make a positive impact on incoming recruits and make them feel welcome.
Unlock the Power of Onboarding Software
Onboarding software can make a significant difference in streamlining your onboarding process. An all-in-one software solution can enhance communication among teams and provide a single digital platform to store records securely.
With ApplicantStack Onboard, you get features that support your onboarding procedures, such as customized onboarding checklists for each job position or work location. Features include:
- Automated checklists: Allocate tasks to new recruits and build checklists to ensure they’re on track.
- Hire import: Applicant data from the interview stage flows throughout the system, eliminating duplicate data entry and saving time.
- Electronic documentation: Streamline the signing process and eliminate paperwork by handling documents electronically.
- Automatic reminders: Receive automated reminders to keep both managers and new hires informed.
- Document storage: Secure your company’s critical documents in a centralized location and organize them intuitively.
- Reporting: Gather feedback with standard and custom reports to monitor onboarding metrics for valuable insights.
Empower your workforce, including those who have recently joined the team, by enhancing your onboarding process.
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