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10 Ways to Reduce Employee Turnover and Maximize Profit
The Bureau of Labor Statistics reported last time that the overall employee turnover rate was around 57%. The cost of a turnover can be around 1.5-2 times someone's annual salary.
Let's find out more about how you can fully understand how to prevent employee turnover and maximize your profits.
The levels of employee turnover
Before we start learning more about how we can reduce employee turnover, let's take some time to measure employee turnover:
Position level: Measures employee turnover regarding specific job positions or roles within the organization.
Organizational level: Measures the overall turnover rate of the organization.
Departmental level: Measures the turnover rate for teams and specific departments or teams within the organization.
Tenure level: Measures employee turnover rates based on how long someone has been with the organization.
Employee turnovers have different levels, so when measuring your turnover level, it's important to know which one you're talking about.
10 Ways for reducing employee turnover
Employee turnover is caused by a number of reasons, it can be from either the employer's or employees side and it can stop you from qualifying for employer retention credit. Here are the main factors that usually cause it to happen.
Provide a competitive salary
Nobody wants to work hard and not get paid enough for it. Common issues employees face are their wages. More than 60% of employees left their jobs last year because of low pay. Especially during a time of recession, it's not something many employees will tolerate. Electric car salary sacrifice schemes are an increasingly popular benefit.
As a result, this will cause them to look for another job and cause employee turnover. To solve this problem, you can offer competitive salaries and make sure you get feedback from your employees. See what they think about their current wage and if it's motivating them to work or not.
Otherwise, you might get unexpected emails from employees wanting to leave if they aren't happy.
Use a shift working schedule
Businesses that are good in shift work schedule planning can easily stand out from competitors. Employees who are happy with their organization giving them flexible work schedules are much less likely to look for other options.
It's crucial to schedule employee shifts that are accurate, so they are published in advance in case any changes need to be made. This not only improves employee experience but job satisfaction as well.
Here are two main reasons why a shift working schedule is an attractive plan:
Offering your team a flexible work schedule attracts top talent and reduces employee turnover
It keeps stress levels down and increases operational efficiency
Using a shift working schedule shouldn't be considered an afterthought because flexibility is exactly what employees want.
Use team performance software
Choosing bad software can negatively affect your business. Especially if your team needs to spend hours figuring out how to navigate new systems and adapt to existing processes, they might become unsatisfied and frustrated.
15Five is a popular performance management software that the majority of businesses choose and while it's a leading solution, many complain that it is difficult to learn. 15Five's primary focus areas are goal and performance management features. However, we've come up with a few 15Five alternatives you can use for increasing team performance in 2023:
Leapsome
BambooHR
Betterworks
Hibob
Officevibe
PerformYard
Workday and more
When choosing the right choice for which software you should use, here are some features they should include:
Its survey features
Goals and OKR features
Goal and development management
Learning curve
Integrations
Prices and free trial
Collaboration tools
There is way too much software that might be more expensive but doesn't offer the ideal features. Therefore, before you choose, analyze its key features and see if it fits your business requirements.
Contract automation software
Contract automation software automates and facilitates contract-related tasks. It allows businesses to generate and manage contracts without any manual input, reducing the rate of human error and increasing efficiency.
It reduces time-consuming processes and makes the process much more straightforward. Contract automation software has many benefits and they are:
Efficiency and speed: Allows businesses to review and generate contracts with the usage of pre-set templates and clauses. This reduces the chance of reviewing and approving contracts, increasing productivity levels and allowing many more contracts to be managed at the same time.
Increased consistency and accuracy: Reduces human error risk, aiming to incorporate the best practices for meeting the organization’s standards.
Better contract management: Includes features that manage contracts after they’re executed. This includes contract renewal reminders, contract-related activities, and more.
Before you start using any contract automation software, it’s important to understand contractual needs and make adjustments and continuous improvements over time.
Get rid of toxic team members
No matter what kind of salary you give your employees, or how nice you are to them, it can only take one toxic person to negatively influence how the rest feel. There are many links between environmental energy and employee turnover. It goes just like the saying goes a bad apple can spoil other apples''.
Sometimes, it may be challenging to spot toxic employees, but what are some ways you can find them? You can communicate with other employees and ask them how they feel about their co-workers. Of course, if there's someone who is ruining the work environment, many will issue complaints about them.
Invest in employee onboarding
After you've managed to hire the right candidates, you need to train them so they're heading in the right direction. The first weeks of your staff determine if you'll have them in the long term or not. Therefore, you have to invest time and resources in ensuring that newcomers are supported from day one.
If employees feel valued and wanted from the first day, they'll most likely develop more commitment towards the company. Recent research done by Future Forum shows that more than 70% of employees are considering looking for another job next year.
Most of these issues are identified from the beginning, but few employers actually invest time in addressing them. However, keep in mind that this could do potential harm in the future.
Provide career opportunities
Many employees who are serious about their career advancements won't be too happy when they find out that their employer doesn't offer them any career opportunities.
Most people want to advance in their careers, and when an employer doesn't meet expectations of showing them a clear path towards their goals, it might become frustrating for them to stay in the same place.
Develop learning and development programs
Many companies will prioritize compensation and benefits, but you'd be surprised by how important it's to include learning and development programs in your business. It's not only salaries and benefits that dominate, but having opportunities to learn more.
The modern workforce has changed and in order to improve the employee experience, they're focused on developing programs that promote growth and development. The lack of learning programs is also a good reason why many people are changing their jobs, all due to the lack of opportunities.
Recognize good work
Nobody wants to work hard and not be recognized for it. It costs nothing to say thank you or to give your employees a reward for all of their hard work. 40% of employees report that they are receiving recognition only a few times a year, or even less than that.
All employees who don't feel like their work is recognized will most likely look for other opportunities in the future. Overall, feedback from colleagues is important and it's one of the main reasons why people stay in a workplace.
Ask for feedback
Feedback is an important thing to include in your daily performance evaluations. It's not only the team that should be doing good, but the employers should be meeting expectations too because if you really think about it, without employees, your business won't exist. Some important questions you can ask employees regarding feedback are:
Are you happy in your current role?
What can managers be better at?
How would you describe your relationship with the managers?
How do you feel when you come to work?
What kind of improvements can be made at the workplace?
Do you think you deserve more?
How would you rate your own work?
All of these questions are important and to make everything simple, you can try making your account anonymous to make employees feel comfortable when answering these questions. Questions can be asked through a survey.
High employee turnover rates can do damage in the long run
Employee turnover rates are something serious to worry about and if you don’t address them, they can waste your time on trying to hire a better fit. Instead of replacing someone, there are many ways to prevent this, and while you can’t entirely do so, there are plenty of ways to minimize it.
Overall, employee turnover rates are only one way to kill your profits. Even though many organizations leave this issue unaddressed, it’s not a smart tactic. Long-term results are much more important than short-term ones.
The Author:
Tony Ademi is a freelance SEO content and copywriter. For roughly four years, Tony has managed to write more than 500 SEO-optimized articles and most of them have ranked #1 on Google. When writing, Tony’s main focus is to carefully do research and make sure that his content is high-quality.
