Tracking employee turnover is something that every business should prioritise. We came across this statement while reading a blog by OfficeVibe growth manager Jacob Shriar the other day, and we couldn’t agree more. He believes that companies must not only monitor this metric, but also do everything possible to reduce it.
Turnover can place a heavy financial burden on businesses, according to Shriar. It is estimated that its costs can exceed more than double the initial salary for а given position. The problem is further exacerbated when companies have to replace a highly specialised employee. Employee turnover can also wreak havoc on staff morale, creating an environment in which workers lack motivation because they are so fearful of getting the sack. With this in mind, Shriar notes that a possible solution to the employee turnover problem is a boost to employee engagement.
Shriar goes on to delve into some of the major reasons for high employee turnover, and top of the list is the hiring process. Research suggests that hiring issues are responsible for 80% of all turnover. One way to prevent this from happening is by improving the overall recruitment process. The first thing companies need to do is create an accurate and realistic job description to give potential employees a clear idea of what the position entails. Video tools might also prove useful as a means of improving job interviews. A task or test can also be given to applicants to assess their practical performance.
Another problem causing people to hand in their notice is bad management. That is not to say that all managers are doing a bad job, however stress and heavy workloads can lead to negative relationships with employees. Citing a PwC report, Shriar highlights the fact that 90% of issues related to employee engagement are due to people. He subscribes to the popular view that most employees do not leave the job but the boss. The problem can therefore be resolved if managers learn how to appreciate and value their employees. An easy way for bosses to achieve this is by being nice to their colleagues and treating them with respect.
As well as improving the effectiveness of the hiring process, Shriar suggests that managers should be trained to help reduce turnover. He believes that leadership is closely tied to psychology so managers should consider training courses in emotional intelligence and positive psychology.
Employee turnover can also be reduced by providing staff with growth opportunities. Citing acclaimed business author Dan Pink, Shriar states that the three things workers want in their workplace is “autonomy, mastery and purpose.” It is therefore important to allow staff to gain the skills needed for their positions. If employees have the knowledge they need to do their job well, they will be more productive – which ultimately translates into better business results.
Finally, Shriar recommends that companies make it a point to notice their employees and recognise what they do. According to a Bersin report, businesses ranking in the top 20% of organisations with a “recognition-rich culture” had voluntary turnover rates that were 31% lower. An interesting fact uncovered by this research was the importance attached to recognition received from peers compared to that from managers. This suggests that companies should provide employees with the opportunity to recognise their colleagues, Shriar notes.
Are you doing enough to reduce staff turnover? What techniques do you have in place that have helped your business keep staff for longer?