Based on a Statista report on remote work environments in 2021, employers said they enjoy increased productivity, efficiency, and morale among employees as the top benefits of remote setups – that's if you get to keep them. What about those working at the office and thinking of leaving their jobs?
Employee turnover is a costly and disruptive problem that many companies face, with effects ranging from loss of time and money to decreased morale.
Among the many strategies used by Fortune 500 companies, mentoring seems to have gained traction, with more than 70% of the said company group using this strategy. The positive news is that aside from incorporating mentorship into your organization, there are other ways to reduce employee turnover.
To help you out, we've compiled the 5 best strategies you can use to reduce employee turnover at your company. Here you'll gain a better understanding of the options available to you and how you can create an environment that encourages employee retention.
What is employee turnover?
Before we dive right in, let's quickly define some terms related to employee turnover, including the following:
- Employee turnover: Employee turnover is the rate at which employees leave their jobs, either voluntarily or involuntarily. It is typically calculated by dividing the number of employees who left during a certain period by the total number of employees in that same time frame.
- Turnover: This is the process of employees leaving their jobs and being replaced by new employees.
- Voluntary turnover: When employees choose to leave their jobs for reasons such as better pay, more challenging roles, or greater job satisfaction, it is known as voluntary turnover.
- Involuntary turnover: This occurs when employees are forced to leave their jobs due to layoffs, terminations, or other reasons.
You can use these to help you better understand the topics and strategies we’ll be discussing below.
What is the impact of employee turnover on business metrics?
Employee turnover has a significant impact on businesses of all sizes, including profitability and productivity. A study conducted by the Society of Human Resource Management (SHRM) found that the average cost of replacing an employee was worth 6 to 9 months of their salary.
This cost includes recruiting, training, and onboarding expenses. For instance, an employee earning $60,000 annually would cost an organization up to $45,000 in replacement costs.
Why is increasing employee retention important?
Aside from reduced hiring costs and positive company cultures, companies with high retention rates tend to have higher-quality employees.
When companies invest in their employees, they can build a strong team of dedicated professionals who are more likely to stay with the organization for a longer time. Later on, companies with high retention rates can build stronger customer relationships and increase their profits.
11 Strategies to reduce employee turnover and improve hiring and retention
It goes without saying that reducing employee turnover and improving hiring and retention are two important goals for any business. To accomplish this, there are several strategies companies can employ to ensure their employees stay productive and engaged.
1. Hire the right people
Sourcing candidates who are the right fit for a role is essential to reducing turnover and improving retention. Companies should invest in their recruitment process by creating a comprehensive job description, conducting thorough background checks, and providing pre-hire assessments.
2. Provide an excellent pre-boarding and onboarding experience
Setting the tone is important when it comes to creating a successful employee onboarding program. The process must make new employees feel welcome, valued, and comfortable at their new job.
3. Keep compensation and benefits current
Companies should strive to stay competitive when it comes to compensation and benefits packages. By doing so, they increase the likelihood of retaining top talent.
4. Offer effective mentoring programs/ opportunities
The World Economic Forum suggests that 50% of employees must undergo skills development by 2025. This calls out the importance of providing mentorship programs not only to help employees develop their skill sets but also to prevent burnout, a prevalent condition among US employees. Creating an effective mentoring program is essential for employees to stay motivated and engaged in the workplace.
Together offers mentoring software that is specifically designed to help companies match employees with mentors depending on their individual needs. Our platform even lets you keep track of progress and evaluations, making it easier to track the success of your mentoring program.
5. Recognize and reward employees
As one of the best ways to show employees that their hard work is valued, companies should recognize and reward them whenever they do something noteworthy. This could be in the form of a bonus, gift card, or even an “Employee of the Month” award.
6. Offer flexibility
During the COVID-19 pandemic, many companies have gone the extra mile to provide employees with flexibility. Said ‘flexibility’ umbrella included offering remote work options, flexible hours, and other creative solutions that allow workers to balance their professional and personal lives.
7. Prioritize Work-life balance/alignment
Employees who feel that their work aligns with their values and goals are more likely to stay longer in the company. Strive to create a work environment that encourages employees to pursue their passions, which in turn will help them maintain passion and drive for their work.
8. Pay attention to employee engagement
The more engaged employees are, the more likely they will be to stay with a company. An environment of open communication and trust helps employees feel comfortable speaking up about any issues or concerns. This way, you can show the amount of value you place on employee feedback and opinions.
9. Closely monitor (and remove) toxic employees and managers
The reality is that not every employee or manager is going to be a great fit. By closely monitoring those who are causing problems within the workplace, you can take steps to remove toxic individuals and create a more positive environment for everyone else.
10. Allow opportunities for development and continuing education
The ability to further one’s career is a powerful incentive for many employees. Encourage your employees by offering internal training programs, tuition reimbursement, and mentoring opportunities.
11. Analyze existing turnover to spot issues and resolve them to avoid future reoccurrences
Although it's not always possible to prevent turnover, you can often identify patterns that lead to increased employee churn. The best way to do this is to analyze existing turnover data to spot any potential issues and resolve them before they become a bigger problem.
Using these strategies to reduce employee turnover, you can enjoy higher employee retention rates and a better work environment. You should evaluate the current situation of your organization to determine what strategies would be most effective for you.
Remember, these strategies are meant to help foster an atmosphere in which employees feel empowered and valued – so make sure that’s the goal when implementing any new policies or programs.
Look no further than Together, where we specialize in creating mentoring software with intelligent pairing algorithms that can be tailored to your company’s needs. With our platform, you can easily create mentor-mentee relationships and keep track of progress and evaluations for each one.
Need integrations with other apps and tools you use? Our platform is integrated with popular HR software to help you get the most out of your mentoring program.
Start improving employee engagement today – sign up for a free demo of Together’s mentorship software!