5 Strategies for Reducing Employee Turnover
You know you have an employee turnover problem when you and your team seem to spend every moment of the day on hiring or dealing with departing employees.
How much easier would your life be if you could cut this time in half to focus on other important HR matters? How much more profitable could your organisation be?
The Australian Human Resources Institute (AHRI) found in a 2015 survey on turnover and retention that the average turnover in Australia is 16 per cent. This represents a 3 per cent increase on the figure reported in its 2012 survey.
Additionally, almost half of respondents consider turnover to be too high in their workplace and more than half believe turnover has had a negative impact on workplace performance.
It is clearly an expensive and potentially debilitating problem. However, there are no magic buttons or quick fixes.
If there is a constant flow of people out the door, it’s probably NOT because you’re not paying them enough. The problems may stem from workplace cultural issues. Some fundamental and time-consuming changes may be required to address them.
Not addressing the problem should not be an option as sticking the head in the sand will only delay the changes required. Below are five different ways to start tackling it.
Map out a path of opportunity and progression
In the AHRI survey referred to above, better pay was only the third reason cited by respondents for moving jobs. The first two related to the lack of exciting career opportunities and career progression.
Regardless of the state of the economy, talented individuals (the ones we want to attract) will always seek the best opportunities available and will always be high on the list of every organisation that can offer them.
The question is: can you offer them? When an employee joins your organisation how can you help them progress personally and professionally? Or do you represent a ‘dead end’ with no place to go after a couple of years but out the door?
Rather than simply reviewing employee performance retrospectively every year and checking that KPIs are met, organisations themselves should be checking whether they are meeting the requirements of their employees. If not, it will be reflected in a slow, but sure, talent drain.
Develop, train, and invest in relationships
Investing in an employee works on two levels: personal and professional.
Professionally, training and development programs are valuable in terms of helping prepare employees for the career path mentioned above; promotions through the organisation may require special technical skills training, soft skills development, management or leadership training etc.
Beyond this, leaders need to invest in the personal side of their employees; people stay longer in organisations where there is effective leadership. Loyalty needs to work two ways to work at all and the foundation of this is trust in, and respect for, the individual.
Of course, to adequately cater for the present and future needs and expectations of an employee, it helps to be close enough to understand what these needs are. Otherwise, it’s just guesswork.
Improving relationships and raising engagement levels with employees may take a little time but the investment is more than worth it; it can become a win-win-win for the employee, the leader, and the organisation.
Hire emotional intelligence and cultural fit
Emotionally intelligent leaders are good listeners, understand their own limitations, take an active interest in the needs of others, are authentic, and take into account the effects of their actions on their employees.
This leads to a ‘safer’, more nurturing workplace environment that will help employees feel more comfortable in their roles. The workplace becomes driven by recognition and reward rather than fear and threat and this will boost motivation levels and performance.
But this must start with leadership and drive downwards throughout the organisation. So it is necessary to hire or develop leaders capable of communicating on this level with their teams.
This approach can then flow outward and back to the organisation: you can start hiring people based on having the ‘right’ attitude and emotional intelligence to fit the culture you are developing.
Improve feedback and appraisal systems
Employee motivation and performance are influenced by many factors – but most are within your control as an employer.
The annual performance appraisal (mentioned earlier) is old-hat and is thankfully being replaced by feedback systems that are more attuned to the modern workplace. A system of ongoing, continuous feedback is necessary to ensure that the needs of both the employee and the organisation are being met. It helps set regular, achievable goals and demonstrates a path of progress to employees.
This will take a slight shift of culture for many organisations and requires buy-in from the top down, but will produce a more dynamic and flexible workplace that helps to reduce the perceived ‘gaps’ between leadership and their teams.
Make a final attempt to keep departing talent
Sometimes employees announce they are leaving before they have actually made a final decision. They may be ‘testing the water’. You then have a decision to make about whether you would ideally like to keep them in the organisation.
If you have been applying the four strategies mentioned above then you probably want to hold on to them. So what can you do?
After listening to the reasons for leaving, it may be within your control to turn the decision around; a counter offer of an improved salary may not work but the promise of brighter career opportunities opening up in the near future might.
Whatever you offer, share a little of how you see the employee fitting into the future of the company; try to paint a picture of the success that is achievable with the organisation. Ensure that you put a timescale on any offers to make them more ‘real’ and ‘achievable’ or they may just sound like film-flam to keep employees there.
Got a problem with high employee turnover? Would you like to discuss ways of reducing it? Start the conversation by emailing me at: email@example.com.