One core aspect of successfully running a business—regardless of its size or the industry it’s operating in—is keeping staff happy and motivated so that they continue to perform at effective levels. It also helps to reduce levels of employee turnover—something that strategic, forward-thinking management teams should always consider.
Why is employee turnover so crucial to manage carefully? Simple—its potential negative effects on an organization can be profound, and can impact every aspect of a company’s ability to operate efficiently.
Entrepreneur published an insightful article on the hidden costs of employee turnover in which Toronto-based human resources consultant Tom Armour discussed the hidden ways turnover can have a financial effect on a company, including:
- The cost of the work that isn’t getting done when an employee is missing
- Co-workers not being able to work to their full potential because they're picking up the slack from missing employees
- A loss of credibility for management when a work environment has a reputation for excessive turnover and employees grow discouraged that they will thrive there
So, it’s clear that employee turnover is a potential problem for any business and that its potential effects are wide and deep. That said, there are some strategic steps that key management, HR teams, and hiring personnel can take in an effort to minimize its prevalence. Forbes recently published an article that highlights several key ways to reduce employee turnover.
Consider using these 5 strategies in your company.
1. Hire the right people.
Keeping employees starts with hiring the right employees. You likely hire employees who have strong skills that match your open position. But, how well do your employees fit in with your business’s culture?
You must hire employees who are behavioral and cultural fits for the job. You can ask employees behavioral interview questions to find out how they react in certain situations. Also, during interviews, be sure to show candidates around your business and tell them about your workplace culture. Candidates will hopefully eliminate themselves if they don’t fit in.
If employees don’t fit in with your work environment, I guarantee they won’t be happy. They won’t fit in, they won’t get along with their co-workers and they’ll feel lonely. An outstanding candidate that doesn’t match the behaviors and culture of your business won’t stay around long. They’ll take their skills somewhere where they fit in.
2. Offer competitive pay and benefits.
People want to be compensated well. They need to cover standard expenses like housing, utilities, and food—and most people want enough money for extras, too. If you don’t pay your employees well, they’ll find a business that will.
When determining compensation for your employees, it’s good to do market research on wages. Find out what your competitors pay their employees. Research a competitive salary range based on similar jobs in your local area. For example, if you want to hire an IT specialist in San Francisco, you should consider what other businesses in San Francisco pay their IT specialists.
And you can’t simply give employees paychecks and be done. Employees want good benefits, too. You must offer competitive benefits that your employees want. Learn about common employee benefits. Then, find out what benefits competitors and other businesses in your area offer.
3. Give praise freely and often.
Your employees need encouragement and recognition. When they do something right, show your appreciation. When they finish a large, difficult project or submit a project before the deadline, congratulate them. Show them that you see their hard work.
Of course, don’t feel like you have to shower employees with praise for everything they do. You don’t have to praise employees for small, everyday tasks. But, when employees truly do something worth congratulations, give it.
The goal here is to create an encouraging, positive work environment. When employees feel respected, acknowledged, desired, and motivated, they are more likely to stay. Best of all, this method to decrease employee turnover is free. You just have to use your words.
4. Guide employees down a career path at your company.
If employees stay stagnate in one job for too long, they might search for another job where they can advance. Most employees want to increase their skills and knowledge and move up the career ladder. Showing employees a projected career path gives them a sense of direction and purpose.
You should lay out an ideal plan for your employees. Where can they go from their current position? Maybe it’s an upward or lateral move. Or, maybe your employees can earn more responsibility in their current position. Whatever it is, let your employees know how they can advance.
After you've set up a plan with them, you can help employees advance along their career path. Provide them with coaching quarterly by recommending ways to advance. You can also offer employees training opportunities. Give them plenty of chances to learn new skills and put them into practice in their current job.
5. Don't shy away from flexibility.
If it’s possible, allow flexible work schedules that let employees adjust their work time and location. That way, employees can create a work-life balance for themselves. Your workers can pursue things beyond work, go to appointments, and take care of their families—all while getting their work done on time.
Flexible work schedules might not be possible for all businesses; your employees might need to be at your business at specific times. But there still might be ways you can offer flexibility, such as the option of working from home one day a week or adjusting a start time for the day.
There you have it—if you’re interested in minimizing the effects of employee turnover in your organization, take advantage of the tips listed here to help keep your business operating effectively.
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