How often is too often for your employees to move to other jobs? While people these days change jobs more often, higher than average employee turnover can be devastating. Without fixing this, you risk damaging your company's reputation, culture, and bottom line.
So, what is employee turnover, and why should we care about it? Employee turnover is the number or percentage of employees that leave your company. Most employees leave prematurely because their needs aren't met by their employers. According to Gallup, 51% of employees are currently looking for a new job which means there are likely people in your office looking to leave. Here's everything you need to know about employee turnover, plus tips to reduce turnover.
If employees seem to leave at a certain time, it's an indicator that something is amiss. These are the most common causes of employee turnover.
No one likes working long hours without seeing any benefit to them. Overwork burns out employees and makes them start to resent their job. The 2019 State of Remote Work report found that on-site workers are working longer weeks because it's required. Meanwhile, more remote workers are doing so because they enjoy what they do.
If employees enjoy what they're doing and working longer, they're more likely to stay. When they don't receive a benefit they're going to leave.
Employees leave when they see that their talents are better valued elsewhere. This includes things like more generous health insurance, vacation policy, and transportation benefits. If your company pays less than others in your industry, you're at risk of employee turnover. If you don't offer things that help employees feel valued, they'll be persuaded to look elsewhere for those benefits.
Culture is a huge make-or-break for company turnover. When employees are happy, enjoy the people around them, and love their work, they'll be your biggest champions. Bad managers and uninteresting work can ruin employees' drive to succeed.
Half of the workers surveyed here have quit their jobs due to a bad boss. With this many people quitting because of management, it's more likely than not that someone on your team is driving employees away. No one wants to stay in a place where they're uncomfortable, so poor company culture can force them out.
We all enjoy hearing praise for our work. But what if you worked at a job where you never hear "Congratulations"? Unfortunately, that's the reality for some employees.
Without being told when you've done a good job, you're more likely to end up wanting to leave a job. We all want to have our accomplishments valued, so a lack of recognition is a motivation killer. Without positive words to inspire us to work harder, we won't put in as much effort. Hostility can grow even more if others are recognized instead of you.
Employees expect to have some way to climb the corporate ladder at their jobs. After all, not many people want to be doing the same tasks for the rest of their careers. Having opportunities for career advancement is essential to keeping employees.
Without clear ways to advance, employees see no point in putting in years of hard work. This doesn't have to mean that you promote every employee! Additional training opportunities should be available so employees can develop other skills.
You might be thinking, "Why should I even care about employee turnover? If they don't want to stay here we can find others who do.". While it's a common idea, it doesn't take into account how employee turnover hurts your business.
It's not easy to calculate how employee turnover hurts your business, but others have done the math. Employee Benefit News reports that it costs employers 33% of a worker's salary to hire a replacement when someone leaves. That's about $15,000 for a worker earning a $45,000 salary.
These costs come from lost work or knowledge on how to do certain tasks when that employee leaves. It includes the time and money spent to find a replacement. Those that do take over have to be trained, which is time that could be spent working.
It's costly to continually hire and train employees. The earlier employees leave, the less you recover from the returns of their training. The company hiring away your employees receives all the benefits of your training, without the costs.
High turnover ruins your office atmosphere by making it more likely that others will leave. If employees see more and more of their coworkers leaving, they won't want to stay. Why would they want to keep working in a place that many of their friends decided wasn't beneficial?
This snowball effect ends up costing you more and more money the longer it goes on. Nipping this in the bud saves you time and effort from having to convince employees to stay when they see that many others have jumped ship.
Reducing turnover might seem like a huge challenge, but there are some simple things you can do to reduce it.
The easiest way to stop workers from leaving is finding out why they're leaving. If employees let you know they plan on leaving, ask them what brought them to that decision. Is it their pay, the office atmosphere, or something else?
Take polls of your office to find out what current employees find most important to keep them at their jobs. Consider the benefits that are most important to them. For example, on-site workers care about health insurance 62% more than they care about stock options. Meanwhile, remote workers care about base compensation 43% more than stock options.
Once you know what employees care about the most, you can tailor your offerings to please them. You can't fix what you don't know, so get out there and ask questions about what employees need.
Management is a make-or-break factor between employees staying and leaving. Create a process for one-on-one meetings where employees can discuss how they feel. Use their feedback to make changes and adjustments to the way you manage them. This goes a long way in showing employees that their needs are being met.
Make it clear to management that their goal is to create a positive office culture. They should be proactive in building a culture that listens to employees' needs and makes them feel valued. Keep employees engaged with each other to help build this company culture.
In today's working world, remote work has become a popular topic. Many employees leave their jobs because they dislike having to be in the office when they could be as effective elsewhere. The State of Remote Work report found people's top reasons for working remotely were for a better work-life balance (91%), increased productivity (79%), and avoiding a commute (78%). When employees can work remotely, it makes them more likely to stay at their job.
This isn't speculation either, as remote workers say they are likely to stay in their current job for the next 5 years 13% more than onsite workers. When asked if the ability to work remotely would make them happier, 83% of those survey respondents agreed and 80% agreed that working remotely would make them feel like their employer cares.
You don't have to shift your whole workforce to working from home overnight. Approach this as a case by case solution. Some employees enjoy working from the office, while some would rather work from home. Be open to discussing what works best for each person. Once your employees are remote, it's helpful to avoid these common remote management mistakes.
Sometimes cash is king. If workers feel that they can do the same things elsewhere for more money, they'll usually move on. The goal here is to either pay at a competitive rate or offer benefits they won't be able to get elsewhere. Take account of what competitors are offering and match what you can. You can find something they don't offer and make it a selling point for your company.
Health insurance, base compensation, and vacation policy are some of the most important perks for workers. If you're competitive with these perks, you'll be in a good spot to keep employees from turning over.
With these tips, you'll be well on your way to reducing employee turnover. Looking for more? Learn more about fostering inclusivity on your team next.