What is employee turnover?

Employee turnover happens when an employee leaves their job for a different job with another company. Some organizations include employee attrition, or when employees leave their job due to retirement, returning to school or another external reason, in their metrics for employee turnover. When talking about the cost and hardship employee turnover often causes, most company leaders are referring to the act of employees leaving due to a lack of job satisfaction or opportunity rather than for external reasons.

Why is employee turnover unwanted?

Employee turnover can have detrimental effects on your business. Consider these negative impacts of employee turnover:

• Expense:Above all, losing an employee is expensive. You’ll often need to fill the open position quickly, which takes time and resources away from regular business.
• Hiring challenges:If your company is regularly experiencing turnover, you may have trouble finding qualified candidates interested in working for your company as word spreads about people leaving their jobs.
• Company culture:Those employees who remain at the company may feel uncertain about their own futures and wonder why their colleagues are regularly looking for work elsewhere.
• Lost productivity:After hiring a replacement, it can take some time for the new employee to reach the same level of productivity as the original employee.
• Decreased product quality:Similarly, you may see a drop in the overall product quality until the new employee is fully trained and well practiced in their work.

Tips for avoiding employee turnover

You can take active steps to help decrease the likelihood of employee turnover within your ranks with a few strategies. Use these tips to create a supportive and satisfying work environment to encourage your employees to stay with your company for the long-term.

Make effective hires

The best way to avoid employee turnover is to hire the best possible people for the position from the start. Take the time to thoroughly vet your candidates, not just for the ability to perform the job well, but also for their likelihood to stay with the company and seek growth opportunities internally rather than externally.

Terminate poor performers

If you notice an employee isn’t performing well or seems dissatisfied with their position, offer them counseling and support to see if you can help them improve their work performance and find satisfaction in their role. This intervention can help you improve your employee’s experience. If the intervention is unsuccessful, it’s often better to terminate the employee rather than waiting for them to quit. Then you’ll have more control over the timing.

Update compensation packages

Regularly update your company’s compensation offerings to stay current with rising living costs. You can also provide other compensatory perks and benefits to increase the value of the overall compensation package for your employees. Consider including perks like childcare credits, gym memberships or paid days off for community service.

Foster a positive company culture

Ensure your company has a welcoming and supportive culture for all employees. As a company leader, you can help foster an environment that helps your team members feel supported and comfortable while at work. Review your company’s mission statement and values to help you establish an authentic culture for your employees.

Recognize your employees

Create an employee recognition program. You can recognize employees for outstanding work, participating in extra projects or any other values they add to the company. Consider providing a weekly or monthly prize or reward to the employees you recognize to encourage everyone to perform well. Make sure you try to recognize everyone over the course of the quarter or year to show that you see everyone’s contributions.

Provide flexibility

Flexibility is an important job benefit, especially for those with young families or relatives who need care. Let your employees work from home periodically or offer flexible hours to support those who need to drop kids off at school or take aging parents to doctor’s appointments in the middle of the day.

Keep your employees engaged

If your employees are losing interest and focus in their work, they’re likely to look for that engagement somewhere else. Regularly meet with your employees to ensure they continue to feel challenged in their positions and have the resources and support they need to continue developing their professional skills and grow their careers.

Encourage employee happiness

Show through language and action that you want your employees to be happy and that you support a reasonable work-life balance. Provide opportunities for team-building exercises and to bond with other employees. If your team members feel happy at work and understand that your company respects their needs outside of the office, they’re unlikely to seek work elsewhere.

Offer professional development opportunities

Providing opportunities for growth within the company is a great way to keep employees engaged and interested in continuing their career with your organization. Give interested employees access to internal and external professional development training opportunities to help them continue their educations and develop the necessary skills to promote into new positions.

Give performance reviews

Perform regular performance reviews for your employees to gauge their work satisfaction and needs. Ensuring they have the resources and supports they require will help them improve their performance, and hopefully their satisfaction with their position. Provide praise and show that you notice and appreciate the work they do for the company.

Maintain company values

Ensure all employees in the company demonstrate the company’s values through their course of work. Regularly refer to and share the values so everyone in the organization knows what’s expected of them and works to embody those values.

Model appropriate behavior

As a company leader, you can model appropriate professional behavior for your employees. If you’re honest, transparent and hardworking, you’ll encourage your employees to do the same. Train your upper management team to appropriately model behavior for even more influence.