 |
Photo by Nick Fewings on Unsplash
Staff turnover is the rate at which employees leave your company and go elsewhere. It’s calculated by taking the number of people who quit or are removed from your business, divided by your total number of employees, then multiplied by 100. This will give you a percentage, which you can boldly boast as your turnover rate.
But what’s a good or bad turnover rate? Employees are entitled to leave your business, and sometimes it’s good when you get rid of poor-performing staff and replace them with people who have fresher ideas. Nobody can pull a figure out of thin air and tell you to aim for that turnover rate or less, but the closest thing you can find to this is a survey by CIPD.
This survey gives you the average turnover rate by industry, so if you’re way above the rate in your sector, that should be something to worry about.
That brings us to the main topic of discussion: how do you reduce staff turnover, and why is a high rate considered a bad thing?
The Problem With A High Turnover Rate
Let’s imagine you have a 50% turnover rate. This means that half of your employees leave every year, which is terrible from an organisational perspective. The issue with high turnover rates is that they impact your business from the ground up. You’ll suffer from:
- A lack of productivity
- Difficulty meeting sales targets
- High overhead costs
Constantly recycling talent means you struggle to see any synergy in your business, which is where the lack of productivity comes from. Being unproductive, then, means you’re unlikely to hit sales targets or perform as well as you should. This means less money enters your business, which is compounded by the costs of dealing with staff turnover.
When you lose an employee, you have to pay for the following:
- Recruitment
- Onboarding
- Training
In some cases, you’re also paying the employee a severance package, but that depends on their contract. It means that some businesses report the cost amounts to 1.5-2 times the employee’s annual salary!!
You’re losing so much money, and then you’re unable to recoup it because you’re losing out on productive working time by needing to train so many new employees and fit them into your company culture. It’s a complete mess, which is why it’s always best to keep your staff turnover rate as low as possible.
How To Reduce Staff Turnover
In summary, so far, high staff turnover, bad. Low staff turnover, good!
What can you do to reduce your staff turnover rate and retain your best talent? Businesses always ask this question, expecting to hear some absurd tips and tricks – in reality, it’s all based on common sense.
Give Your Employees A Voice
Most employees just want to be heard and valued. Many people leave jobs because they don’t feel as though they’re listened to or taken care of. Sort this out by sending employee surveys every month or so to gauge what your workers are feeling. Listen to their thoughts on matters relating to your business and how everything operates.
Look for patterns in employee responses; imagine everyone complains about the same thing, like the comfort of the office chairs. It highlights there’s something you need to change to make them happier, so go ahead and do it. You can use software that’ll spot patterns in responses for you, so there’s no excuse not to send out these surveys and gain valuable insights into what your employees truly think about your business.
Compensate Your Employees Fairly
Wanting a better salary is one of the top three reasons people leave their jobs. If they don’t feel as though they’re being compensated fairly, then they’ll leave and find a job that gives them the wage they deserve.
You can avoid this and boost employee retention in your business by ensuring you pay people fair wages. Look at the average salary for job roles in your area and industry. If you’re paying people less than this, then they’ll look elsewhere. Keep up with the average – or pay slightly more – to see more people stick around.
It’s also worth introducing performance-based boosts, like bonuses or monthly perks. If your employees meet performance targets, then they’re compensated even better. It provides ample motivation to stop your staff turnover rate from going too high.
Offer Ways To Grow Within Your Business
Another reason someone might leave your company is that they seek higher aspirations. Some people don’t want to be admin assistants all their lives; they want to climb the corporate ladder and see true growth in their careers.
In that respect, you should prove to your staff that there are ways to grow within your business. This could manifest as salary increases that represent their new level of experience. Or, it could be promotions into new roles within the company.
The latter is always a good route to go down, as promoting from within is always better than hiring outside talent. If you have an opening in your company and don’t promote a qualified and experienced employee, there’s a high chance they’ll quit because they feel undervalued.
Provide More Flexibility
Employees want flexibility. They don’t want to be confined to a set way of working with no wiggle room. Give them more flexibility in their schedules or benefits so they have more of a say in their working lives.
You’re not giving them the keys to the castle, so to speak. You’re still in control, and they can’t do whatever the hell they want. It’s just that you remove some of the rigidity and allow them to do things like work from home now and then, pick and choose different benefits, and so on.
To wrap things up, you need to remember that a high turnover rate is bad for business. It will, ultimately, cost you a lot of time and money. Begin the process of sorting out your staff turnover rate by calculating it and comparing it with the national average in your industry. If it’s way too high, then apply the ideas above to bring it down and hold onto your talent.
