High levels of staff turnover can be a problem
Whether you’re a small business owner or the manager of a large, multinational team, high levels of staff turnover can be an expensive and tricky problem to overcome, particularly if your team is made up of highly skilled or knowledgeable people.
Not only can a high level of turnover lead to reduced productivity and low staff morale, but it comes with a real cost implication. According to recent research, high levels of turnover can cost between 30% and 150% of an employee’s annual salary. This depends on the industry you’re working in and how skilled your employee is. This cost comes from the reduced productivity of your remaining team: The costs of advertising and sourcing a new employee: The time was taken to interview potential candidates, training costs: And the lead time it takes for a new hire to get up to speed.
In the UK, it has been conservatively estimated that staff turnover costs businesses, at least, £4.13bn every year, as new hires take up to eight months to reach optimum productivity levels. Similarly, it has been suggested that it costs over £30,000 to replace a single staff member once all costs are taken into account.
Bringing down the levels
So how can you take steps to bring down the levels of staff turnover in your own business? To start with, it’s key to understand why people usually leave their job. According to a combination of sources, the main reasons include:
- Dissatisfaction with the job, or with the job scope
- Unsafe working conditions or inappropriate tools
- Poor job performance
- Poor candidate screening
- Ineffective training
- Lack of career opportunities or development
- Conflict with management
- Workplace stress and workplace bullying
- Dissatisfaction with remuneration
Given these reasons, it seems there are two key areas you can examine to try and bring down turnover rates; before hiring and after hiring.
Effective candidate screening
Effective candidate screening is vital to bringing in the right talent. But it can also be used to ensure you’re hiring people who are likely to stay for the long run. You can alter your hiring process to ensure the people you’re bringing in are going to be a good fit. There needs to be a good fit with your business and your existing team. Ensuring this fit is a crucial part of reducing overall turnover.
You should take advantage of modern technology. In particular, you should harness the power of social media. Many employees only look at the technical elements of a candidate. However, they should be looking at the wider personality and values of interviewees. By taking the time to find additional information made publicly available by candidates themselves on social media sites, you can gain a much better understanding of the person you’re interviewing. You can then make an informed decision.
Similarly, you should make the cultural fit a top priority. Even equal to the ability of the candidate to fulfil the job criteria. To do this, you can make sure the hiring process exposes the candidate to the company. You can include the current team, and align to their job role. Another tool is to use behaviour-based screening techniques to ensure the candidates’ values align with those of the company. Spend some additional time explaining what the company does and what it is about to potential hires. It’s wise to make sure the candidate knows what’s expected of them before they’re officially hired.
When it comes to new hires and your current team, you can make some changes that will improve morale and productivity, and in turn, will bring down your staff turnover rates.
Giving them the opportunity to grow
One of the key ways you can do this is to ensure you’re allowing your team members the opportunity to grow. Lack of development or opportunities to advance is a commonly cited reason for employee’s leaving. By ensuring your staff are allowed (or even encouraged) to take on new responsibilities or learn new skills, you can create a more desirable working atmosphere.
You can also look at the culture of communication in your business to see if it can be improved, as this is also key to understanding what your employees need and ensuring they feel like a valued part of the business. Try and encourage communication between team members and management, and let everyone have their say on how the business should be run, and (importantly) action any ideas that are worth following up on. This will make your employees feel cared for, valued and listened to, and can have a dramatic impact on morale, productivity, and motivation.
Reward and recognition
Of course, remuneration is important in keeping employees happy. However, you may not always be in a position to offer staff members more money. What you can do however is offer additional perks and benefits. Consider offering more unusual perks, such as pet insurance, additional days off or extra pension contributions. Better yet communicate with your team to see what extra perks and benefits would have the most impact on them.
Hopefully, you’ll find some useful tips and insights there to help you reduce staff turnover in your own business.
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