Do you want to know how to reduce turnover in your business? This post is for you.
Retaining employees is a big issue that most organisations of today face.
Successful businesses and companies know how important the workforce is to their success.
Hence, they continuously seek the best strategies to keep their top employees.
The same thing should be said for your business.
In other words, if you want your business to succeed and keep growing, you should also figure out how to reduce turnover.
“What is turnover, and how can you minimize it in your business?”
These are the questions that will be answered in this article.
So, ensure that you carefully follow through with this discussion.
What is Turnover? – How To Reduce Turnover
Turnover, also known as employee turnover, is the measurement of the total number of personnel who leaves an organisation throughout a specified timeframe.
The timeframe could be annual, monthly, or quarterly.
Turnover covers both voluntary and involuntary leaves.
This means that it measures the number of personnel leaving on their own and those the organisation sent away.
Factors That Cause Turnover – How To Reduce Turnover
There are several reasons why employees leave an organisation.
While some of these reasons are negative, others are expected and normal.
The negative ones mostly happen at a surprising rate and often cause organisational issues.
Turnover happens in organisations due to the following reasons:
- Toxic/negative work environment
- Feeling burnout/overworked
- Better offers
- Poor work-life balance
- No room for career development or growth
- Dissatisfaction towards management or boss
- Life or family event
- Natural career advancement
- Involuntary departure
Knowing the factors that cause turnover in an organisation is the first step to curbing it.
Reasons For Reducing Turnover – How To Reduce Turnover
High turnover does more harm than good for organisations.
This is especially true when the turnover is voluntary.
Therefore, as a business owner who wants their business to keep growing, you need to understand the importance of reducing turnover.
When you do, you will work better in reducing it.
To make you understand this, here are some reasons you should work to reduce turnover:
Whenever there is a turnover, it financially affects your business.
This is because you will need to spend funds on finding and hiring personnel who will replace those who left.
The cost of this includes advertising fees and time spent on screening and interviewing candidates.
Expenses like management oversight and training will also be added.
Apart from the money an organisation will use to hire and train new personnel, they will also face other issues leading to financial decline.
These issues include lower engagement, lost productivity, and customer service issues.
If you want to avoid these unwanted expenses, then you need to work to reduce the turnover rate in your organisation.
Experienced Employees – How To Reduce Turnover
Organisations with high turnover tend to lose employees who have worked for a long time in such organisations.
When this happens, such organisations face a crippling situation as institutional knowledge, relationships, and skills will be lost.
Additionally, they will lose the potential impact and value that the employees who left would have delivered.
All these losses will cause such an organisation to struggle for a while.
Therefore, to avoid losing experienced employees and their values, you need to be relentless in ensuring that the turnover in your organisation is reduced.
When personnel in your business keeps leaving, it will dampen the morale of the employees left.
This will happen because they will be tasked with more responsibilities and heavier workloads to cover up.
Consequently, this will make their work satisfaction and motivation to reduce.
Another thing that will dampen their morale is the relationship they will lose when their fellow employee leave.
If turnover is not curbed in your business, the employees still within the organisation will start feeling the need to leave because others did.
So, you have to work to reduce turnover to ensure that your employees’ morale doesn’t reduce.
Increased Productivity – How To Reduce Turnover
As you know, a persistent or high turnover rate causes several issues for businesses and employees.
One issue that happens immediately after a turnover is a decrease in productivity.
When you employ new employees, they will have to learn and get used to the job.
As a result, their productivity level can take roughly two to one year to come up to the standards of already existing employees.
Aside from that, there is also the issue of your understaffed workforce being at risk of burnout due to excessive workload and overtime.
All of which will drastically affect productivity in your business.
Therefore, to ensure increased productivity and not otherwise, you have to work to reduce turnover constantly.
Your loyal customers know your employees and have worked with them several times.
They often have healthy relationships with them.
Also, the experienced employees in your organisation know how to engage and satisfy your customers.
If your business starts having high turnover and these experienced employees leave, your customers will feel it.
The experience that they have with your business will change as they will try to adapt to the changes.
If your new employees have a tough time adapting and dealing with your customers, the customers will have a negative experience.
As a result, the reputation of your business will be at risk.
So, you need to reduce turnover in your business to ensure that your customer experience keeps positive.
Increased Revenue – How To Reduce Turnover
When there is no or little turnover in an organisation, such an organisation will enjoy increased revenue.
This increase or gain will stem from reduced hiring costs, good customer experiences, increased productivity, and others.
One of the main aims of a business is to make profits and good revenue.
Hence, reducing turnover is important as it will work in your favour.
11 Great Tips on How To Reduce Turnover
Reducing turnover is important for several reasons that you now know.
However, the question still stands “how does one reduce turnover in their organisation?”
The tips below will help to answer that question:
1. Employ Rightly
When employing people in your organisation, you have to ensure that they are people who will adhere to the organisation’s rules and culture.
To do this, you have to make your organisation’s culture, visions, and goals clear to the candidates.
Do not tell them what you think they want to hear; rather, let them know your business operates from the get-go.
Also, you have to ensure that you are conscious of the individual’s character, skills, and qualifications.
If their characters, skills, and qualification meet your requirement, ensure that you are clear about their job description and responsibility.
This will help them to know what they are getting into.
When you employ rightly, you will reduce the chances of letting go of your employees because of poor performance or attitude.
It will also reduce the chance of employees leaving the organisation because it was not what they thought it to be.
Ultimately, this will help to reduce turnover in your organisation.
2. Closely Watch Toxic Employees – How To Reduce Turnover
Toxic employees are excessively critical, blame others, undermine their colleagues, gossip, and don’t care about others.
Their attitude and behaviour negatively affect everybody in the organisation.
It can also affect the organisation as the work environment, workflow, and quality will be disrupted.
Consequently, if such employees are neglected, it can make top performers leave an organisation.
It might be difficult to spot toxic employees, but you can do this.
The best way to spot them is by monitoring your employees’ characters and attitudes and checking for ones who exhibit the traits mentioned earlier.
Once you have spotted them, have a conversation with them and find out if they can change for the better.
Also, meet with their colleagues and find out if the toxic employees are giving them issues.
You need to deal with this problem fast to avoid it getting out of hand and increasing your employee turnover rate.
3. Offer Good Salaries and Compensation
Unsurprisingly, several good employees have left their place of work because the pay and compensation were poor.
Money is a great motivation to stay in an organisation or to leave.
When employees are being paid good salaries and compensations, they will enjoy work and take up more responsibilities.
Most companies don’t understand this.
Hence, they constantly have a high turnover rate, and most of the employees who leave are top performers.
You can reduce turnover in your organisation by simply paying your employees well and compensating them when they perform exceptionally well.
Also, you can offer raises to employees who deserve them.
Furthermore, it is wise to check out what other organisations pay their employees with similar roles, especially for jobs that are difficult to fill.
Understand that people with jobs that demand more skills should be paid more.
When your organisation offers competitive pay, you will notice a rapid decrease in turnover.
While doing all these, ensure that the salaries, although competitive, are what your business can afford without issues.
You don’t want to raise your employees’ salaries and struggle to pay at the right time, as it will be counter-effective to retain them.
4. Offer Flexibility – How To Reduce Turnover
Modern-day employees are greatly concerned with flexibility in their job.
So, allowing them the flexibility they crave can boost retention and reduce turnover.
To give your employees flexibility is to provide them with more space and focus solely on their work, not where, when, or how they are doing it.
In other words, you will allow your employees to decide where, when, and how they will do the job, tasks, and responsibilities you assign.
This way, your employees can go about their affairs and still be productive.
As effective as this technique can reduce turnover, you should check if it will help achieve your company’s goals or vision.
Above all, you must check if your organisation can handle it effectively.
5. Recognise and Reward Employees
A simple “thank you” and an appreciation note can go a long way in retaining and reducing turnover in an organisation.
Your employees want to be recognised and appreciated for their good work and contribution to the business growth.
They want to know that you value them in your organisation.
They are likely to leave your organisation if you don’t appreciate them.
So, to avoid that, you need to let them know that you appreciate and recognise them.
Giving them feedback in a way that makes them feel positive and rewarding them for their hard work are the things you need to do.
Doing all these and more will make them happy with your management and become more productive and loyal to your organisation.
6. Work To Improve Employees’ Engagement – How To Reduce Turnover
Employee engagement is an employee’s mental and emotional strength towards their work, team, and organisation.
If your employees’ engagement is low, then there is a chance they will leave your company.
This can increase the turnover in your organisation.
Therefore, you need to pay close attention to your employees’ engagement and seek ways to improve it.
When you can do this, your employees will be more enthusiastic about the company and everything related to it.
As a result, their chances of leaving will reduce.
7. Value Work-life Balance
Your employees will likely leave your company if they work overtime or have a heavy workload that causes them to burn out.
Heavy workload or overtime work doesn’t just harm your employee’s health but also reduces their work-life balance.
Consequently, this can make them damage relationships, fun and relaxation in their life.
All these things are horrible for your employees and, ultimately, your work.
So, you should value work-life balance in your organisation.
Reduce the workload and allow your employees to relax and take short breaks once or more during work hours.
Let your employees work with a good schedule; they should be allowed to go home early after work.
When they are due, give them time for vacations and leaves.
If you do these things for your employees, they will be happy and healthy working for you.
Their production level will increase, they will put in their best, and they will be happy to stay in your organisation.
As a result, your turnover rate will reduce.
8. Improve Your Performance Reviews – How To Reduce Turnover
Performance reviews refer to any formal assessment that a manager uses to evaluate employees’ performance and identify their weaknesses and strengths.
They also serve as a means for managers to offer employees feedback and set future performance goals.
Your performance reviews can be a causal factor of increased turnover in your company.
This can happen when your performance reviews are not discouraging than encouraging the employees.
A discouraging performance review mainly focuses on criticising an employee’s poor or average performance instead of suggesting improvements.
Many other factors can make your performance review pursue your employees from your organisation.
So, you have to discover them and work to improve your performance reviews so that they will work to build the morale of your employees.
When you do this, your employees will want to stay in your company and try their best to improve.
In other words, your turnover rate will reduce, and your company’s productivity rate will rise.
Check here to discover how to improve your employee performance review process.
9. Provide Room or Opportunities For Your Employees’ Growth
You need to understand that growth is needed for progress.
If you want your business to progress, the people who work for the business should also progress.
In other words, your employees’ growth should be your concern.
Don’t only show concern but also provide room or opportunity for them to grow.
For those who desire to further their education or want more training but don’t have money to do it, you can help them out.
If they are interested, they can forgo a percentage of their salary in exchange for better education.
You can help them by paying or subsidising the education or training.
Whatever you decide, you have to be sure to have it recorded and agreed on by the parties involved.
If your employees return from that training with new knowledge and skills, they will be loyal to your business.
They will see that the company is out for its growth and put in their best for the company’s growth.
When this is achieved in your company, the turnover rate will reduce.
10. Help Them In Their Career Path
Apart from helping your employees become more skilled, credible, and knowledgeable, you also need to help them progress in their career path.
What this means is that you will help them climb the cooperate ladder by promoting them when they deserve it.
Do not keep them in one position year in and year out, especially if they perform exceptionally well in their duties.
Instead, look at your employees, see their potential and effort, and promote them.
When you do this, your employees will see no need to go elsewhere for them to achieve growth in their career path.
As a result, they will work harder to build the business.
Consequently, your employee turnover rate will be at bay.
11. Be Transparent
Another thing you need to do to reduce your company’s turnover rate is to be transparent with your employees.
“What does this mean?”
This means that you need to improve your communication with your employees.
Communication is two-way; you give, and you receive.
When you are receiving, you have to be sure to listen attentively and appreciate the giver.
Meanwhile, when you are giving, you have to be transparent.
As the owner of the business, you are considered to be the one who knows everything about the business.
Hence, when there is a new development or change in the company, you need to let your employees know about it.
Try not to keep them in the dark but carry them along in things you do in the business.
When you do this, your employees will see that you have their interests at heart and value them in the business.
As a result, retainment of these employees will be easier.
Ultimately, this will aid in reducing the turnover rate in your company.
Conclusion on How To Reduce Turnover
Your employees are an essential aspect of your business.
This is why businesses and companies struggle and sometimes fail when their employees leave their organisations.
To avoid this, you need to know how to take care of your employees and reduce employee turnover.
There are several ways to do this.
In this article, a few have been shared with you.
So, make use of them and reduce your organisation’s turnover rate.