High turnover rates and false starts – employees who leave their job within 12 months of hiring – are a major problem for businesses all over the world, particularly in the UK and the US. According to a recent study, 25% of UK employees and up to 50% of US employees quit their job within the first 12 months of hire, which is a significant concern for businesses of all sizes looking to hire new employees.
It’s not just the hassle of sourcing, hiring and training new employees to replace those who leave that’s the problem however, as there is a real cost implication to high level of turnover. Estimates suggest the cost is between 30% and 150% of an employees’ overall annual salary (depending on the industry and the type of job), and it has been reported that staff turnover costs British businesses at least £4.13bn every year.
So what can managers and business owners do to try and reduce staff turnover? Here are five tips to get you started:
- Address the issue before hiring a new team member
One way of significantly reducing staff turnover is to examine your hiring processes, and adapt them to ensure you’re bringing in talent that’s more likely to stay in the long run. You shouldn’t only be looking for people who can do the job well, but people who will be a good fit for the company and the culture. To ensure this, you can utilise social media to look at all aspects of a candidate, and make the cultural fit a top priority when interviewing. You should focus your acquisition efforts and those who you are confident will fit in well with the job, the responsibilities and the existing team – consider adopting behaviour-based screening and interviewing to help ensure your new hires will be a good fit.
You can also ensure your hiring process exposes candidates to their prospective job roles, and to the company as a whole. Spend some additional time explaining what the company does and going over the responsibilities of the job, ensuring your interviewee is fully aware of what’s expected of them and what their job entails – minimising the likelihood that they will change their mind once they start work. - Learn effective people management
People management is an important skill for any effective manager, and it goes a very long way when it comes to keeping people motivated, happy and engaged (which in turn will have an impact on turnover rates). Try and create a collaborative environment for your workers in which communication is encouraged (at all levels, regardless of seniority). Treat people as human beings and listen to their problems, and manage expectations and motivations with consideration and genuine communication. Not only will this result in a more engaged, motivated workforce, but it will result in higher levels of contentment and productivity and will significantly reduce turnover in the long run. - Give employees the opportunity to grow, improve and advance in the company
Looking into the research around why people leave their roles, you will find that a commonly cited reason is a lack of development or opportunities to advance in the company. It stands to reason then by ensuring your team-members are encouraged to learn new skills (either in their own time or through company initiatives) or take on new responsibilities, you that this development is rewarded where appropriate, you can create a much more desirable working environment and ensure employees are far more likely to stay in their jobs. - Offer employee perks and benefits
You might think that remuneration is a key element in keeping your staff, and while this is undoubtedly true, it’s not quite as important as you might think. Employee investments – i.e. benefits their enjoy as part of their overall employment package – have been strongly linked to a high level of morale and low staff turnover rates. You can offer standard benefits (such as pension contributions, discounts at partner companies, health insurance, etc.) or you can offer more unusual benefits to your staff, such as gym memberships, pet insurance or additional days off work. - Take advantage of the opportunities offered by those who are leaving
Sometimes, no matter how well you manage your team and how good their employment package is, people will leave the company. It might be down to relocation, personal issues or a change of industry, rather than anything directly related to the company or the employees’ job role. While it can be tempting to take quitting personally or react with anger, when an employee does let you know they’re leaving you should try and take advantage of the opportunity to learn from the exiting team member. Ask for a rationale behind the decision, and try and find out if there’s anything the company can improve on, and utilise exit interviews to see if there’s anything valuable you can learn (or even if you can offer the employee a reason to stay). Treat the employee leaving as a collaboration, so you can control when and how the news is given to the rest of the team, and ideally allow a remaining team member to shadow the person who is leaving, so any specialist knowledge or experienced can be transferred effectively.
You’ll never be able to avoid people leaving entirely, but with a little effort and a few tweaks you can certainly reduce the rates of staff turnover, while simultaneously improving team morale, motivation and productivity.