Reducing Employee Turnover
Hire the right people and keep them on board
Employee turnover is one of the more expensive challenges of being in business. Savvy business owners are investing in techniques to keep good people on board.
Employee turnover is one of the more expensive challenges of being in business. Depending on the employee’s level, the turnover of one person can cost a company 20 to 120 percent of that individual’s annual salary. Beyond those hard dollars is the crippling impact of turnover on a business dependent on a few key people.
Savvy business owners are investing in techniques to keep good people on board. Examples of both traditional and innovative methods include:
• Make each employee feel like part of the team. Identify team players during the hiring process, then continue to emphasize the importance of teamwork.
• Determine individual motivators. The team is made up of people who will respond in their own way. Understand what motivates each person and provide that motivation.
• Provide ongoing recognition. It’s easy to pay a great deal of attention to new employees then forget them after they’ve been around a while. Employees are more likely to stay if their contributions are regularly acknowledged.
• Never stop training. Courses designed to help employees grow in their current positions along with training to help them advance will build loyalty and aid employee retention.
• Provide constant feedback. Make performance evaluations an on-going process.
• Be sensitive to small problems. Ignoring minor problems in the hope they will go away usually leads to big problems. Deal with things as they arise, before they have a chance to get out of hand.
• Solicit opinions. Conduct an annual internal survey to determine how employees view the company, where they are finding satisfaction, and how to correct problem areas.
• Remember internal marketing. Happy existing employees are the best marketers, both with customers and for new employees. Develop an internal program that continually sells the company to your staff.
When employees leave, find out why. Sometimes individual circumstances will make the separation inevitable—a spouse may be transferred or the person may be leaving the workforce for personal reasons. But when an employee’s departure is due to dissatisfaction with your company or a better opportunity elsewhere, you need to understand what happened and, if possible, use that information to manage further turnover.
Remember, businesses must not only compete for customers but also for top employees. Evaluate your company regularly to see how it measures up to the competition. If you are constantly losing key people, and if you see a trend in their reasons for leaving, consider that you may not be competitive in the marketplace. Treating your employees with the same care, concern, and respect that you give your top customers will reduce your turnover rate and increase your profitability.
