A strong workforce is integral to an organization’s success, and the retention of talented employees is an important step in maintaining a strong workforce. Turnover is an expensive process for businesses, with a Cornell University study estimating that the average cost per employee turnover may reach 150 percent of the wages for that position. Costs associated with replacing employees include advertising the open position, training new hires, and lost productivity while employees learn their new roles. In addition, a high turnover rate may damage employee morale, negatively impacting the performance of the remaining workforce. Fortunately, businesses may implement several strategies to reduce turnover and thereby boost their bottom lines.
1) Begin the process of improving retention from the outset by hiring the right candidates. While it is not always obvious how employees will perform once hired, recruiters should interview carefully to ensure that candidates not only possess the skills required for the position, but will also fit in with the company’s culture. Using assessment tools in the applicant selection process is one of the most effective ways to screen out unqualified candidates. These tools may include pre-interview questionnaires asking applicants about experience and skills relevant to the position, job simulations designed to predict how applicants would react in realistic work scenarios, and background and reference checks.
2) Clearly define goals for the organization and share them with employees at all levels. Employees thrive on the knowledge that they are contributing to their company’s success, and setting goals for the organization will help to create a team mentality by providing workers with a common objective around which to rally.
3) Encourage employees to share their own personal goals and career aspirations. Use this information to define individual career paths, which should include clear steps and enough challenges to keep workers stimulated. Link individual goals to the broader objectives of the company, and clearly demonstrate to employees how fulfilling their own goals helps the organization achieve its mission.
4) Offer meaningful recognition for employees’ hard work. This may come in the form of a peer recognition program, commending employees for their accomplishments via emails that are shared with higher-ups, or outlining team achievements in a monthly newsletter. Showing employees that their efforts are appreciated will lead to a more content and productive workforce.
5) Equip employees with the skills and opportunities that they need to grow. The Cornell University study found that employees often cite a lack of opportunity for career development as one of their main reasons for voluntarily resigning. In addition to improving retention, meaningful growth opportunities benefit businesses by helping employees acquire the skills they need to excel in their positions. Online courses are a popular way to achieve this end because they are cost-effective for employers and allow employees to conveniently learn on their own schedules.
6) Offer competitive pay and benefits packages, as well as flexible work arrangements when possible. Employees are placing an increasingly higher value on work-life balance, which may be facilitated with arrangements like telecommuting or compressed schedules. Managers should review compensation packages at least annually to ensure that they are in line with industry trends.
7) Seek the input of longtime employees. Many organizations conduct exit interviews to glean the reasons that lead employees to depart, but most do not bother to discover why some workers choose to stay. Loyal employees will probably be able to offer information on what the company is doing well and where it may be able to improve.
Given the high cost of employee turnover, an organization will likely enjoy a positive return on investment when it pursues efforts to keep employees engaged, productive, and happy. By fostering a team environment that provides growth opportunities for employees and recognizes them when they achieve their goals, businesses may harness talent and reduce expenses associated with turnover.
Does your company identify the behaviors of successful employees and help select high potential candidates for new jobs? Do you want to foster retention and avoid costly employee turnover? Contact Creative Business Resources and unlock powerful employee retention tools: Call 1-888-700-8512