Several of my clients asked for help to reduce their turnover. This is a great area to focus because hiring mistakes on average cost 30% of an employee’s first year salary, and depending upon the role, that number can be much higher. Indirectly, turnover adds burdens to remaining employees, overwhelms managers and is disruptive for customers and clients. The answer is simple but not easy. However, done properly, improving employee retention can be achieved by implementing the following strategies:
1. Competitive compensation and benefits: Offer competitive pay and benefits packages to attract and retain top talent. Conduct regular market research to ensure that your compensation packages remain attractive and are in line with industry standards. This is a great place to start but is almost never the top reason people leave.
2. Ensure you have competent, trained managers: Every organization pivots on their managers yet the quality of these roles is unexplainably neglected. As a rule, 1 in 3 new hires turn over in their first 60-90 days. 94% of those would stay if they had quality managers. Effective interviewing and selection, quality onboarding and competent day-to-day management are just table stakes. Setting clear and measurable performance standards is the basis for driving performance management, selection and training, which yield great results. 90% of turnovers quit their manager not their company.
3. Provide opportunities for growth and development: Employees are more likely to stay with an organization that offers opportunities for professional growth and development, especially younger employees. Implement training programs, mentorship initiatives, and career advancement opportunities to support their personal and professional growth. Establish clear career paths and provide employees with a roadmap for advancement within the organization (effective HR departments and managers do this). This helps to address their long-term career goals and provides them with a sense of agency, direction and purpose.
4. Foster a positive company culture: Create a positive work environment where employees feel valued, appreciated, and supported. Encourage open communication, provide regular feedback, and recognize and reward employees' efforts and achievements. Help employees maintain a healthy work-life balance by promoting flexible work arrangements, providing time-off benefits, and encouraging employees to take breaks and vacations. This is hard to do when employees keep turning over so ensure the previous three strategies are in place first before tackling work-life balance.
Remember that each organization is unique, so it is essential to evaluate these strategies based on your specific organizational culture and employee preferences. You may not do it perfectly but even partial benefits are dramatic improvements to your bottom line.