Employee turnover rate is one of the biggest challenges organizations face. This has always been a difficult subject to battle; unfortunately, job-hopping is more common now than ever.
There are a lot of different reasons why employees quit their jobs… moving to be close to a relative that needs help, change in careers, deciding to stay home with children, going back to school, etc. These are reasons out of an employer’s control and there’s little one can do to make them stay.
But the truth is the majority of reasons why an employee leaves a job are within an employer’s control. Every element of an organization contributes to the happiness or unhappiness of an employee and has a direct impact on how employees feel about their jobs.
According to the 2021 Bureau of Labor Statistics report, the annual total turnover rate in 2020 was 57.3 percent, including voluntary and involuntary. That is an unbelievably high number! Granted, 2020 was an unusual year, but another report from 2017 by the Bureau of Labor Statistics said the turnover rate that year was 26.3 percent… still a pretty high number.
The cost of replacing one employee can range from one-half to two times the employee’s annual salary, being conservative that is, because it takes a new employee nearly a year to be fully onboard and perform their job as an employee with more seniority. So, if we picture a 100-person organization providing an average salary of $50,000, that organization could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.
Considering these numbers and the highly competitive labor market, it’s quite hard for an organization to survive. So, the best chance of survival is to keep turnover low, not by giving everyone a higher paycheck, but it sure requires an investment in company culture, time, and patience.
Some of the reasons why employees quit are:
They say people don’t quit their jobs, but their bosses. Employees don’t have to be friends with their leaders, but they need to have an amicable relationship to work hand in hand. The boss is an integral part of their job and life, so having an uncomfortable relationship won’t make things easy.
A boss is there to provide feedback and clear direction, they have to spend time in one-on-one meetings and align the employee to the larger organization. If the relationship with the person they report to is awkward or distressing, it negatively affects employees’ engagement and confidence. A bad boss is the number one reason why employees quit their job.
If you want to keep talented employees, every manager should take a hard look at themselves and figure out if there’s anything they’re doing wrong leading their employees, such as task distribution, goal setting, people management, or something more personal like temper management.
When having good employees, managers tend to make them work hard because they deliver good results, but this can be counterproductive. Nothing burns out an employee more than having too much to handle, and usually, they’ll exceed expectations to have good outcomes and, more importantly, less work in the upcoming weeks.
You may think that assigning an employee more work is a form of recognition… but they definitely don’t see it that way and it ends up feeling more like a punishment than a reward. If you want your employees to have a bigger workload, you should consider increasing their job roles too. Offer raises, bonuses, and title changes in exchange for added responsibilities. Otherwise, they’ll surely start looking for other opportunities.
This study pointed out that 32 percent of new hires who quit within their first 90 days cite company culture as the reason for leaving. The way you do business, treat your employees, and how they treat one another are obvious elements of the corporate culture.
Employees usually appreciate a work environment where management is accessible, executives are approachable, and there’s a clear communication policy and a good direction. Nowadays, employees look for a company with a culture that fits their own core values, including strong leadership, work-life balance, career development, and even diversity. Ask your current employees what they like and dislike about your culture and see where you need to make adjustments to help with employee retention.
Employee engagement has been the main focus over the past few years because its importance in the workplace and influence on business results has now become more widely understood. A lack of employee engagement has a huge impact on employee turnover. According to Gallup, engaged employees are 59 percent less likely to search for a new job or career in the next 12 months.
82 percent of employees say that the lack of recognition and appreciation leads them to consider switching employers. It’s easy to overlook the hard work our employees do, but a simple pat on the back or atta boy goes a long way and has a meaningful impact on our employees. It’s also important for managers to communicate with their team and determine what motivates them. Options can go from some form of internal recognition to a bonus, a flexible schedule, or even vacation time.
42 percent of millennials say learning and development opportunities are the most important factor when considering a job opportunity. Particularly young professionals are the ones eager to grow and successfully launch their careers.
Without a clear opportunity for advancement, employees will be tempted to start looking somewhere else. 45 percent of employees say they’re not satisfied with their current organization’s advancement opportunities; and 36 percent say they felt they were overlooked for a promotion, which leads to a high turnover rate.
Nowadays, quality employers offer continued education like workshops, seminars, mentorships, opportunities to take courses at universities, etc. This keeps employees happy with their development and allows companies to stay competitive.
Investing in improving these 5 key points will definitely help you keep your turnover rate down and it’s way cheaper than losing your top talent to your competitors. Remember that with Hirebook, you can keep track of your employees’ tasks, OKRs and KPIs, and also pay attention to their wellbeing with weekly check-ins. With our features, you’ll surely skyrocket performance and retain your most valuable employees!