Employee turnover is one of the most bottom line busting costs associated with a company’s workforce. SHRM estimates that, for entry-level employees, the cost to fill an open position hovers near $4,000. Using this insight, if your company loses 100 employees a year, your company experiences a loss of at least $400,000.
While this number is certainly frightening, the good news is that turnover is an easily avoidable problem and with the right tools, your company can ensure that top talent is not leaving your company. It’s also worth mentioning that none of the following causes and solutions presented here exist in a vacuum—when an employee quits his or her job, it’s usually a reflection of many factors that led him or her to finally quit.
That being said, what tools and initiatives will help you reduce employee turnover? Let’s jump right in…
- Hire Managers Who Manage Well
Hiring managers and putting people in charge who show compassion and have the skills to manage others is one method to combat employee turnover on the front lines. Achievers employee survey showed that 57% of employees don’t feel recognized at work, and Entrepreneur claims that when workers are not recognized, they are not motivated. Low motivation can make an employee that much closer to quitting his or her job, or even put him or her over the edge far enough to finally quit.
Performing a top-down audit of your management team can have a huge effect on your entry-level workforce. While you may not have direct contact with these employees, the managers you choose certainly do. It is absolutely crucial that your management team is personable and qualified to lead. Poor managers also make it more difficult for an employee to work, and if the job itself (which may already be difficult by nature) is harder than necessary, an employee might find it not worth it to work there any longer. Address this issue early on by being transparent with recruiters about what traits you’re looking for in a manager during the hiring process.
- Be Flexible
Work flexibility is important for every employee at every level. I’m sure you can remember the last time you had to leave the office early or take a personal day for an inevitable issue. Being flexible with policies and protocols shows your employees that you understand that life happens. When an employee thinks that his or her employer is understanding, you reduce his or her risk of leaving the company. On the other hand, if an employee thinks that the company doesn’t understand his or her life situation, then it’s more likely that the employee will try to find a job for an employer who does care.
On the same train of thought, flexibility in other areas will show your employees that the company cares about them. Since entry-level employees may not be making as much money as they need to be able to save a hefty sum for emergency expenses, offering financial flexibility is another area to focus on if your company cannot afford to pay them more. One such initiative is allowing your employees to control the frequency of their pay. Simple add-ons to your existing payroll system allow you to do this at no cost to your company and no changes to the way your company handles payroll. In result, a study by DailyPay showed that employees are 1.9x more likely to apply for a position whose job description mentions that it offers daily payments.
- Prioritize Recognition and Rewards
Along with the previous point about hiring managers that care, instilling an employee recognition and rewards program that allows you to easily highlight achievements and strong work will also show your employees that you care and appreciate them. Making it as simple as possible for your managers to recognize employees on a daily basis will help ensure that your managers are actively participating. By promoting this type of program across your organization, you are letting employees know that your company takes employee recognition and happiness very seriously.
- a 1% increase in employee engagement returns an additional .6% growth in sales for your company
- 50% of HR leaders said that an increase in employee recognition would boost employee retention
- Offer Unique Advantages
In the current job market, it’s becoming increasingly harder and harder to hire top talent due to the record low unemployment rate and tight job market. Employees across all industries and skill levels are continually searching around to see which company will offer him or her the best complete package. Additionally, it’s been reported that if you offer help to improve financial wellness, employees are more willing to work for your company. The plain advice is that offering work perks and advantages that your competitors are not offering will help put your business ahead in overall employee preference.
Now more than ever, it’s crucial that your company is doing everything in its power to retain your current workforce and improve its employee retention rate. Since it is incredibly hard to fill open positions, you must prevent the need to fill open positions by retaining your workforce. In turn, your company will save time and improve its bottom line significantly without the recruitment costs and countless hours spent searching for talent. Try out some of these tips and let us know which worked best for your company.
To learn more about employee retention, check out this fun infographic covering 6 Stats That Speak to Employee Retention.
About the Author
Seth Loftis works at DailyPay, Inc., a financial solutions company dedicated to reducing employee turnover by improving the financial lives of employees. Employees can receive their wages days before their scheduled payday at no cost to your company or change to your existing payroll system. Learn more at trydailypay.com or follow them on Twitter or LinkedIn.