5 Tips to Decrease Employee Turnover

Employee turnover is a fact of business life and is becoming a serious problem in today’s corporate environment. Your staff members will move on, and many times there’s nothing you can or should do about it. The better armed you are with strategies the more effective you’ll be at managing it, and therefore helping to reduce employee turnover.

Employee turnover is costly and disruptive to any organization. High employee turnover hurts a company’s bottom line. Experts estimate it costs at the minimum twice an employee’s salary to find and train a replacement. Also, turnover can damage morale among remaining employees. While no business can realistically expect zero employee attrition, there are strategies that an organization can implement to retain the best employees and reduce the likelihood of your employees joining the proverbial revolving door.

The Costs of Turnover

If you’re figuring the cost of your own turnover, don’t forget that many of the costs may be hidden. Here’s a list of what you might include in your estimate:

•  Exit Interviews
•  Overtime for employees who are left
•  Temporary workers
•  Lost productivity of departing employee
•  Reduced productivity of temporary replacement
•  Reduced productivity of co-workers
•  Lost work opportunities
•  Advertising costs
•  Recruiter
•  Application processing
•  Screening
•  Interviewer(s)
•  Replacement Costs:
  • ○ Candidate travel
  • ○ Selecting
  • ○ Agency fees
  • ○ Compensation
•  Induction Costs:
  • ○ Relocation
  • ○ Employee Processing
  • ○ Orientation
  • ○ Training
  • ○ Productivity Differentials

5 Tips To Decrease Turnover

Preventing turnover is a long term goal in most organizations. These are the five areas in which concentrated efforts will give you the best results for preventing turnover:

1. Select the Right People for the Job

Everyone agrees that in order to minimize employee turnover you have to act even before that person is actually your employee. Targeting the right talent and properly selecting them is the first step to minimize employee turnover rates. Use employee retention tools designed to help accurately identify skill gaps and workloads, and implement your recruitment plans accordingly. The components of hiring right include:

•  Behavior-based testing
•  Competency screening
•  Background checking
•  Organizational fit
•  Capacity for learning
•  Motivation
•  Future Goals

You need to discover whether the employee has the right skills, competency, and character. Are they a good fit for your organization and culture? Do they have a capacity to keep learning in the role? Do they have a sufficient degree of motivation? What are their long term career goals?

When interviewing, ask questions related to traits and attributes you need in an employee. For example, to evaluate someone’s decision-making skills, ask about a problem he or she faced in a previous job and how it was handled. Take a different approach with your hiring strategy by implementing 360 degree observer ratings in the interview process and using self-assessment instruments.

Look at all aspects of candidates. Although this sounds simple, the fact is, many employers don’t look at all aspects of a candidate, such as how they’d fit in with a team or if their values align with the company’s. When you evaluate all aspects of a candidate, you’ll choose the right employees. In turn, this will reduce turnover because, in conjunction with performing well, employees will want to be there. Be absolutely sure the candidate is a fit not only for the position, but for your company culture.

Encourage referrals and recruit from within. Having current employees offer referrals could help minimize confusion of job expectations. Current employees can realistically describe a position and the environment to the individual he/she is referring. Another way an employer can lessen the impact of turnover is to hire from within, since current employees have already discovered that they are a good fit in the organization.

2. New Employee Orientation for Clear Expectations with Accountability Metrics

The task of keeping an employee for the long haul begins on the employee’s first day of work. Employee orientation programs help foster loyalty and combat turnover. Imagine this: An employee always remembers the first day they started with your company. A bad experience can stay with a team member long after they’ve left your company and seriously damage your employer brand. You really DON’T get a second chance to make a first impression and if the impression you make to new employees is extremely different from the impression you gave them as a candidate, they will run.

Job Orientation Tips

• Pre-orientation for you — Know who is coming in and make an orientation plan.  Is this person in sales, an engineer or a custodian?  Once they’ve completed going over policies and paperwork, who will give them the facility tour – you, or their supervisor?  Who will they be shadowing during their first days?  Have this all set up beforehand, otherwise you risk looking unprepared and making your new hire feel like an afterthought.
• Pre-orientation for the new hire — Remind people of the time and what information to bring:  IDs, voided check, emergency contacts, etc.  Be clear on how long the orientation will take and what they should wear.  Tell them whether they’ll immediately go to work after or not.
• Positive environment - People are nervous during the interview and they are still nervous during the orientation. They’re concerned they’ll say the wrong thing and their offer will be rescinded immediately.  Put them at ease.  Schedule when you’ll have plenty of time to talk to them and answer their questions.  Provide drinks. If orientation is an all-day affair, provide snacks and take breaks. Keep it relaxed, don’t let anything get too stuffy, they will enjoy themselves and learn more in this type of environment. If you’ve been doing the orientation all day ask someone else to help give the tour. The new hires will appreciate another perspective and the team member can point out the really important stuff – the coffee area, the vending machines, the written culture and the unwritten culture.
• Present the information and be honest. Set everyone up for success. If your handbook says everyone gets an hour lunch but you know the real culture is to take 45 minutes, let them know that. Don’t make them look bad. If you say you’re open from 8-5 but you know that people in this position wind up staying late more often than not, be up front about it. Ideally you did this in the interview, but now is the perfect time to repeat yourself. People will appreciate the truth.
• Remember this experience is about the new employee. At the end of orientation, why not have a few of your star performers talk about their experience and why your organization is a remarkable place to work.

In addition to emphasizing what you expect from the employee, your orientation program should include information on what you, the employer, will do for the employee. Highlight programs and practices you have in place that benefit them.

Clear Expectations with Accountability Metrics

Now that you have hired the new employee according to the job description, you must train and consistently monitor that the performance expectations and accountability metrics are being met.

Frequent employee complaints center around these areas:

•  Lack of clarity about expectations
•  Lack of clarity about what they are accountable for
•  Lack of feedback about performance
•  Failure to provide a framework which the employee perceives they need to succeed

Employees want a guideline as to how they can excel at their positions. From their first day, expect and demand strong work performance. Review their job descriptions and accountability metrics on a regular basis. Acknowledge good work when it’s delivered. Discuss work that missed the mark and together determine how to avoid a repeat performance. Organizations that have good induction programs get new people up to speed faster, have better alignment between what new people do and what the organization needs them to do, have happier employees, stronger team work and have lower staff turnover rates.

3. Leadership

People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well-liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention.

A poor supervisor can quickly sour an otherwise high performing team. The ripple effect of bad management reaches all aspects of business and quickly affects employee morale and customer loyalty.

Good Supervisors Create Great Employees: Good front-line supervision is integral to lowering employee turnover because the high cost of recruiting, hiring, and training new team members is continually increasing. Why not invest in existing employees and improve overall company

operations? Some managers and supervisors naturally possess exemplary communication skills. Others need training and exposure to the positive effects of a learn-by-doing method of managing and motivating people.

Coach rather than manage: Try to balance giving your team members the authority, the tools and the space they need to do their jobs – empower them – and stay checked-in as they execute their responsibilities. Be accessible for, and open to, problem solving.

Best Practice Tips:

• Use positive language/Be respectful. Encourage your managers and supervisors to use positive language when communicating with employees. Using a genuine and supportive tone sets the foundation for building great rapport and opens the lines of communication. If you want to keep your good employees, be respectful of them. They wouldn't be your employee if you could do for yourself what they do for you. Your team members have goals and dreams and needs. As an employer, you should try to learn what their goals/dreams/needs are and make sure you are offering them what they need.
•  Listen actively and ask questions. Active and effective listening will transform not only productivity but also team buy-in and leadership capability.
•  A good employee is generally motivated by reward, but what reward they seek is highly individual. Ask them questions like: How they are doing and if they're enjoying their work, so far. Do they feel comfortable in their position? Do they have any thoughts or ideas on making your company a better workplace?
• Ask if they've been furthering their education or been thinking of a career change, recently. Praise with sincerity. When employees receive frequent, sincere, and relevant praise, they feel valued and supported by their supervisor. Employees who feel valued and supported are less likely to leave and will be open to additional training and responsibility.
•  Empower employees. Trust is key to empowerment, and trusted employees feel responsible not only for their own success, but for the company’s. They’re more engaged, and more likely to stay.
• Interact with employees. Meaningfully interacting with team members allows managers and supervisors to get to know their employees on a personal level. Employees who have meaningful interactions with their leaders are more likely to talk openly about issues instead of silently harboring negative feelings about their job or the company, and looking for work elsewhere.

4. Communication, Communication, Communication

Use communication to build credibility. No matter what the size of the organization, communication is central to building and maintaining credibility. Many employers get communication to “flow up” through a staff advisory council or committee meetings, which solicits and/or receives employees’ opinions and suggestions and passes them on to upper management. It’s also important for employees to know that their company is really listening and responds to (or otherwise acknowledges) employee input.

The funny thing about communication is that it’s not as much about the words you say, as it is about the tone of your voice combined with eye contact, hand gestures and body positioning. So, if you only meet “virtually” with your team, much of your message and their response to it may be lost. Face time, however scarce, is an immensely important factor in communicating well and establishing trust. If you are managing employees in remote locations, try to meet with them in person on a regular basis – maybe not monthly — but at least 2 to 3 times per year.

Open the lines of communication: Ask your employees what they want. Take what they say and implement it. Not every suggestion will be viable, but it’s important for them to know you value

them individually, the suggestion is appreciated and that their voices are heard. If the suggestion can not be implemented tell them why.

Regularly review and assess employee concerns. Merely asking your employees what makes them unhappy isn't enough — to keep them feeling valued, you'll need to make a reasonable effort to address their concerns and, most important of all, show them that you're making this effort. If your employees can see that their comments and suggestions are being taken to heart, they'll feel like they're being listened to and that their opinions matter in the grand scheme of your business, which can make many of your team members feel happier in their job.

Conduct exit interviews: Even friendly, open companies with great work environments occasionally lose an employee for another opportunity. Take the opportunity to conduct a thorough exit interview with the employee before they are gone for good. Some business experts have found that employees are more willing to be candid at exit interviews, though others have found that many employees will be less critical in hopes of getting a good recommendation. In any case, an exit interview is your last chance to learn what went wrong or what could be done differently regardless of the circumstances behind why they are leaving, so take advantage of it.

Communicate openly and honestly: No one likes to be kept in the dark or second guessing their role within the company, so as a leader, it is important that you foster a culture of open and honest communication. Keep your employees informed of important company decisions as early as possible, and also get them involved in the decision-making process, when appropriate. Your team will appreciate being both informed and involved and will be much more likely to stay loyal to the company and engaged in their work.

5. Appreciation – get creative regarding benefits

Show appreciation via compensation and benefits. Offering things like competitive salaries, profit sharing, 401(k), bonus programs, and health plans, paid time off, and tuition reimbursement sends a powerful message to employees about their importance at the organization. The rewards given to employees must be meaningful in order to impact their perception of the organization and therefore have a marked influence on its retention efforts.  Here are some low dollar cash/cash equivalent gift suggestions:

$5-$10 Coffee gift cards

$5-$20 Fuel cards

$10-$50 Restaurant gift cards.

$50-$100 Visa/Master Card gift cards.

How about dinner on the company

What about awarding a personal day after a pulling off an immense assignment.

Employees should be rewarded to motivate even higher performance. The use of cash payouts could be used for on-the-spot recognition. These rewards have terrific motivational power, especially when given as soon as possible after the achievement. It’s important for employers to say “thank you” to employees for their efforts and find different ways to recognize them. Even something as simple as a free lunch can go a long way towards making employees feel valued.

Listen to employees and ask for their input as to what rewards might work best at your organization. Conduct meetings and surveys to enable employees to share their input. Most team members will work harder to carry out a decision that they’ve helped to influence.

Lower stress from overworking and create work/life balance. It’s important to match work/life benefits to the needs of employees. This could be in the form of offering nontraditional work schedules (such as a compressed work week, telecommuting, and flex time) or extra holidays.

When work-life balance is structured properly, both the employee and employer come out ahead. For example, the employer will experience more productivity in the workplace because employees will be less stressed, healthier, and thus, more productive. Encouraging employees to set work/life goals, such as spending more time with their children, communicates that you really do want them to have a life outside of work and achieve a healthy work/life balance.

Simple emails of praise at the completion of a project, monthly company-wide memos outlining achievements of your team, and peer-recognition programs are all ways to inject some positive feedback into a workforce.

It’s clear that having proper retention strategies is key in order to retain employees. Though you’ll never be able to wipe out employee turnover completely, you do have the ability to decrease it. The best part is that, in doing so, you’ll be creating a more positive culture for your team.

Now that you have the list that will reduce employee turnover, why not work to make your organization one of the few, the best that truly honors and appreciates employees. If you treat your employees wonderfully, you will seriously reduce employee turnover and employee concerns, with that automatically comes improved customer satisfaction and enhanced impact to the bottom line.

For more information or if you are looking for help in lowering turnover, please visit Powerhouse Learning or contact Kathy Knowles at [email protected].