Let’s face it. Some amount of employee turnover is natural due to such things as a major illness or a spousal transfer. Sometimes you really need to terminate an employee due to lack of performance, violation of law or who is just a poor fit with your team. But, in the big picture, you want a high retention rate and a low number of people who leave your company. High-performance companies often achieve this goal.
Right now, the unemployment rate is remarkably low. That means that people in the workforce have more options, so they may be more likely to job hop, making your objective of a strong stable workforce more challenging.
Why Employee Turnover is Bad
Employee turnover has these potentially serious impacts on an organization:
Cost
Turnover increases costs, including the rehiring costs of search, time for interviews, background and reference checks, as well as the costs for orienting and training.
Slow Start-Up
New employees need time to gain information on the company, so the ramp-up time decreases their performance.
Task Impact
During a vacancy period, tasks may be left undone or other team members burdened by extra workload. This may affect the amount and quality of work produced.
Negative Team Impact
Employees build friendships, so when someone leaves, that interrupts the dynamics of relationships negatively. If turnover is consistently high, that undermines the organization’s trust in its leadership and its confidence in future outcomes.
Mission Impact
Dealing with high employee turnover may shift the focus from achieving the mission to dealing with ‘steadying the ship.”
5 Reasons to Work on Employee Retention
It should be clear that employees are the lifeblood of any organization—its most valuable asset. So, it just makes sense to work hard to retain employees:
Avoid the time drain required with resignations and rehires.
Spend less money on recruitment, rehiring, and training.
Achieve better productivity for the organization.
Improve employee loyalty, which will enhance customer loyalty.
High retention allows a company to overcome occasional bad times.
10 Ways to Retain and Reduce Turnover
Here are 10 ways to retain employees and reduce employee turnover:
- Hire employees who are the right fit for your team. Make sure new employees have the right skill set, values, and attitudes.
- Onboard new employees effectively, so they start well.
- Create an environment for employee engagement.
- Develop a culture of respect throughout the organization.
- Provide professional development. Help all employees to grow and they will stay.
- Offer ways to play and enjoy time together.
- Compensate employees fairly with solid, well-known pay practices and offer retention incentive plans.
- Avoid burnout. Watch employee work schedules and workloads. Observe work practices.
- Show appreciation. Every employee deserves to know that they and their efforts really matter.
- Communicate well. Employees should clearly know the goals, expectations, and results.
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Emory Ware