No matter how remarkable your product or service offering is, the people in your team will ultimately impact your business’s success. For this reason, you naturally want to hire – and retain – the best talents in your industry.
Unfortunately, retaining your best team members is easier said than done. Even with the trend slowing down in recent months after the Great Resignation in 2021, many employees continue to quit their jobs voluntarily. According to the Bureau of Labor Statistics’ May 2023 release, 3.8 million people quit their jobs in April 2023.
Ensuring your organization’s long-term success entails keeping your team engaged and actively finding ways to combat employee turnover. This blog covers what it is, what it costs your business, and how you can keep your best employees from exiting your doors.
Employee turnover generally refers to when an employee leaves your organization. It is classified into two main categories: voluntary and involuntary.
In voluntary turnover, employees willingly leave their jobs for various reasons. On the other hand, involuntary turnover includes termination due to poor performance or layoffs due to business restructuring.
Ideally, you can keep involuntary turnover to a minimum by hiring candidates you need and intend on keeping. However, managing voluntary turnover is not as straightforward. Businesses must understand why their employees willingly leave their positions, make the necessary adjustments to prevent further employee departures, and manage the consequences of their current vacancies.
Losing an employee – especially high-performing ones – entails facing a high employee turnover cost. Studies show that employee departures can cost a company 1.5 to 2 times that employee’s annual salary.
Of course, this financial burden varies depending on the previous employee’s level of seniority in the organization.
On top of all these, let’s not forget that the current labor market is tight and highly competitive. Losing your best employees one after the other can weaken your organization and hurt your performance.
When it comes to employee turnover cost discussions, one of the first things that come to mind is expenses directly related to hiring a new employee. After a team member leaves, you will have to spend money to advertise your open positions and interview, screen, and hire candidates. On top of that, there’s the cost of onboarding and training the new hire.
However, this is only one part of the equation. You will indeed have to dedicate time and resources to find, hire, and onboard a new hire. However, there are also intangible consequences to consider after a turnover: lost productivity and institutional knowledge.
Your business will continue to take a hit while the role remains unfilled. Even after finding a competent talent, it will take time for them to adjust to the new position and perform as you want them to.
Besides the financial impact of a turnover, here are some more ways a turnover affects your organization – and your remaining team.
Lost Productivity
After losing employees, you simply have fewer team members to get the job done. The lack of human resources can either put your projects on hold while the role remains unfilled or force your remaining employees to assume more responsibilities to compensate for the loss.
Stalled projects can lead to decreased productivity and lost revenue, while an overwhelming workload can put your team under excessive stress.
Depleted Employee Morale
For your team, an employee departure can mean losing a valued work friend. This can negatively impact your organization’s dynamic and affect your employees’ motivation.
Your remaining team members will also naturally ask why their co-workers are leaving. They may even reflect on their peers’ reasons and, unfortunately, wonder if they should make the same decision.
More Turnover
Overworked and demotivated employees are more susceptible to burnout and turnover intention. Failure to step in and put the right solutions in place will only keep the cycle going.
While turnover is inevitable across various industries, consecutive employee separations can harm your company and should be prevented.
Here are some actionable and practical ways to improve employee engagement and satisfaction and, most importantly, retain your best performers.
A career plateau is one of the leading driving forces behind voluntary employee turnover. Professionals today value continual learning and development, so initiatives such as regular training, mentoring, and leadership development programs can go a long way in reducing turnover.
More importantly, don’t forget to offer your employees a clear career path. Be invested in their growth as individuals and professionals – and make them feel it. Employees are more likely to stick around if they can clearly see opportunities for advancement.
Give your employees the recognition they deserve, whether for a remarkable achievement or a laudable professionalism in a project. A great starting point is seamlessly integrating this into their feedback sessions with their managers.
However, it’s also a good idea to have a formal employee recognition program tailored to your organization. Recognize top performers in company-wide events, or allow your employees to give shoutouts to their colleagues.
Making your team players feel appreciated for their contributions creates a positive work environment that keeps them motivated.
Even if there are no obvious problems within your team, it’s unhealthy to assume that your employees are always going to be 100% happy with their roles, responsibilities and company processes.
Create avenues for your team to raise their concerns or suggestions for improving your processes. For example, you can conduct stay interviews to understand what your employees like about their roles and what they believe can be improved.
A high-feedback environment allows you to not only know how your team feels about your organization but also address issues before they become deal-breakers.
If you want to keep your best performers around for the long term, it’s worth noting that offering sky-high salaries won’t be enough.
Instead, invest in both your new hires and current employees by keeping your perks program current and competitive. Use the information you collected during your stay and exit interviews to determine the benefits that your employees want – and actually strive to deliver them.
Whether it be desirable healthcare benefits or remote work opportunities, taking the time to know and offer the perks your employees value will let them know you value them.
When a valued employee leaves your company, this is your opportunity to ask for feedback on shortcomings and understand how you can do better.
Employees who are leaving are more likely to share their candid opinions. Take advantage of this candid feedback to improve your organization for those who choose to stick around.
Besides its financial implications, a high turnover rate can cause lost productivity, depleted employee morale, and more employee departures. Unfortunately, your company will never be able to take off without a happy, motivated, and committed team.
Combatting the Great Resignation can be challenging, but it can be done. At HPWP, we offer resources and employee retention training programs designed to share hiring practices that make a difference in retention, engagement, and increased performance. Let us help you build rapport with your employees and reach your company’s full potential – get in touch today to learn how.