Every company (with more than 1 employee) is on the lookout for ways to reduce turnover of its employees. Turnover are one of the biggest costs to companies, quantitatively and qualitatively, because of the experience lost from people leaving, the cost to recruit new employees, the cost of training new employees, etc. Each company has its own strategy for combatting employee turnover but there are a few key strategies that are seen over and over again by human resources experts because they produce good results. Some employee turnover is unavoidable of course, but anything a company can do to reduce turnover to a certain extent almost always helps the bottom line.
The first tip to reducing employee turnover is fairly intuitive, but also easier said than done, in that you should hire the right people to begin with. Just exactly what does the adjective “right” mean in the phrase “right employee” though? The meaning is elusive and complex but it all has to do with relationships. When it comes to the relationship between a potential employee and a position, does the person have the skills, knowledge, and abilities to perform the duties of the position at an acceptable level? When it comes to the relationship between the employee and the company overall, specifically the corporate culture, will the potential employee work well with others on their team, interact well with other departments/teams, enjoy working for the company for reasons other than just “they pay well enough”? A key purpose of the interviewing process is to answer these questions because hiring the wrong person necessarily leads to increased turnover.
The next tip is to offer competitive pay and benefits. Again, this may be intuitive but is easier said than done given that newer generations of workers value things differently and have different priorities than previous generations. For example, some companies have switched from throwing all of their compensation at employee salaries to giving decent salaries mixed with great healthcare and student loan repayment benefits. Salary is still very important, make no mistake, and knowing how much to pay varies greatly depending on the type of position, the geographic location of the position, and the qualifications of a potential employee. Savvy companies keen on reducing employee turnover do ample research to know they have these numbers correct.
The last tip is related to a frequent complaint by employees in exit interviews across all industries and professions: job stagnation. Most people don’t want to stay in the same position their whole lives. They want to see a path for advancement in front of them and if your company doesn’t have one available for an employee, they’re likely to leave to find one elsewhere. Putting resources into career development is a key way to reduce employee turnover.