It is no secret to business owners that high turnover rates increase expenses and reduce a company’s efficiency. According to a study, employee exit costs up to a third of a person’s annual salary. High turnover rates also cause employee morale to quickly plummet since the remaining employees don’t feel appreciated.
If your company is suffering from low retention rates, don’t worry too much yet. Making your employees love your brand and want to stick around is more simple than it might sound. Here are some practices you can implement to increase your company’s retention rate:
Invest in Your Employees’ Growth
Attrition studies have proven that employees are more likely to want to continue working for a company that gives them opportunities to advance their careers. This can be done by offering them training and educational experiences that they wouldn’t be able to get otherwise.
For example, when recent graduates start their professional careers, they expect the company to invest in their development so they can grow inside the company. This development can happen through training, mentoring, job-shadowing and even by letting the new employee try new things within the job. This investment in employee growth is essential to increase morale and to prepare the employee for the next steps on the career.
Make Smart Decisions in the Recruiting Process
Another critical way to reduce employee turnover rates is to have a winning strategy in the recruiting process. It is not uncommon that human resources managers review job applications paying attention only to a person’s education and work experience. If they seem to line up fairly well with the requirements of the available position, then the person is hired.
However, experienced human resources managers know the importance of culture fit. Each company’s culture is unique and hiring people who match it is not an easy task — but it is extremely important. Employees who have a company culture fit have a higher chance of thriving in the position they are occupying.
In order to find out if you are hiring people who will thrive in your company, you must read between the lines when conducting interviews. Of course, if you ask them if they think they fit the company’s culture and share the same values, they will say “yes”. That’s why you need to look for specific examples and get to know the potential hire.
It is important to mention that before looking for employee-culture fit, your company must have clear corporate values and your employees must be a living representation of them.
Offer Competitive Employee Benefits
Nowadays, it is hard to find a company that doesn’t offer basic benefits such as health insurance. For this reason, simply having some type of basic health plan coverage is not enough to reduce your company’s turnover rates. If you want to increase your employees’ wellness within the workplace, you must invest in a more competitive package. If your employees can find the same or better benefits in another company they will look for greener grass on the first challenge they face in your company.
Some examples of benefits that might set you apart from other companies in your niche include having flexible hours, mental health programs, mentoring programs, snacks on-site, and more. Notice that these perks don’t require a big budget. However, there are other options such as company retreats, performance-based bonuses, and tuition reimbursement, for example.
Retirement packages that offer a pension to those who work for the company for a specific amount of years are also helpful because they encourage employees to want to stay with the company for the long-haul.
Constantly Give Feedback
Many employees choose to leave a company because they begin to feel invisible and unappreciated. Interestingly enough, this occurs most often in positions where a person works so efficiently that they begin to be taken for granted. Then, when they move on to a company that notices how hard they try, the ensuing chaos from their absence ends up serving as a harsh reminder of what happens when good employees are ignored.
One of the best ways that companies can prevent this type of loss is to give frequent feedback to all of their employees in regards to what they are doing well and what they need to improve on. While this can easily be done through employee-evaluation forms that are electronically mailed, it is best to give them in person because it will show a deeper level of care and concern for their well-being and all of the efforts that they put in each day.
It is important that you use kind words when communicating with employees, especially when an employee is struggling and needs extra encouragement to improve specific areas of their job performance. Constant feedback is helpful for employee development too because it offers them more direction in regards to what is expected of them and how they can grow and advance in their job position.
Encourage Work-Life Balance
In order to maintain a job, employees have to make a considerable amount of sacrifices in regards to the time that they spend with their friends and family members. Parents of young children often struggle the most because their little ones need more attention. So one good way to ensure that they want to stay employed with your company is to offer them the flexibility that they need to maintain a healthy work-life balance. This can be done by giving them adapted schedules, paid mental-health days, and temporary work-at-home positions until they can get through the challenges that they are dealing with.
The Bottom Line
These five steps to reduce employee turnover rates are all fairly easy to facilitate. While some of the practices, such as offering extra benefits to the employees, may initially seem to increase expenses, they will end up saving a significant amount of money in the long-run.
That is because employers who show compassion and appreciation for their employees’ work are more likely to have them staying longer at a company. And the less employee turnover that a company has, the more focused it can be on its efficiency, product or service operations, and maintaining its customer base.
On top of this, there will be fewer expenses in regards to recruiting and training new employees and the number of errors that are caused during the learning process. With that, take the first step in implementing these practices at your company.