With the economy and labor market conditions improving dramatically all around the world, companies are now seeing a significant increase in employee turnover rates-and the trend is only suspected to continue through 2015 and beyond. Employees that have stayed put for years because of the lack of opportunities out there are now feeling confident enough to spread their wings. With a little insight and foresight, companies may be able staunch the flow and hold onto their best and brightest.
Why Is Employee Turnover Bad for Business?
It is estimated that it costs about twice an employee’s salary to hire a replacement and get the new employee ready to take on the position. Besides the monetary costs, businesses also suffer from losing employees that are valuable and knowledgeable and having to hire new employees that may take years to reach the skill level of existing employees. Having the staff turnover can change the whole dynamic of a company-with productivity and customer loyalty also possibly suffering.
What Can Companies Do?
Instead of crunching numbers and hemming and hawing over why employees are leaving, employers must be proactive if they want to reduce their turnover. Taking a few simple steps may help companies to stop the hemorrhaging.
Improve Hiring Processes
Many experts agree that the best way to reduce employee turnover is to hire the right people to begin with. Recruitment software can help to save managers time sifting through unqualified or poorly matched employee candidates. Tight hiring standards and comprehensive evaluations may help ensure that only those employees that are the most competent and fit best with the company culture get the position.
Make Training Realistic
There is nothing worse than investing all of the time and effort that it takes to train an employee, only to have that person quit on their first “real” day on the job. Unfortunately, this is very likely when training systems are inadequate to prepare the person for the job.
Keep Current Employees Happy
Once people are in place, management teams may begin to feel like the hard part is over. This mentality can be dangerous! Employees should be regularly interviewed to discern the level of contentment and to be allowed to voice opinions on what could be improved within the company.
Invest in Staff
Rather than being content to keep employees in position, management should actively pursue ways to develop and promote employees-on a daily basis. If employees feel there is little opportunity for growth or advancement they will move on.
Spot Flight Risks
Spotting flight risks can be difficult and may take several different methods. Looking at numbers such as individual KPIs (key performance indicators) and attendance records may give part of the picture, but listening to employees is critical to detecting a flight risk prior to takeoff. Employees that are dissatisfied or disengaged are much more likely to complain-and leave.
Terminate When Necessary
Though it may seem counterintuitive, firing when necessary may actually help to reduce employee turnover. Employees that do not fit with the culture, are unsatisfied, or are unable to perform the job duties can spread discontent like a virus. Identifying and weeding these employees out before the rest of the organization is affected may actually help to reduce turnover and improve the organizational atmosphere.