Your ability to retain the brightest, most experienced, and most dedicated staff is crucial to keeping everything running smoothly during the post-COVID recovery period. Recent statistics show that a company will experience 18% employee turnover yearly.
Voluntary workforce turnover may result in lost employee productivity, missed sales opportunities, damaged morale amongst remaining employees, and additional expenses to recruit new employees.
Preventing staff turnover when times are tough ensures your business is set up to weather the most brutal storms. This post looks at the effects of employee turnover on a business and the tips to prevent turnover during difficult times.
What Is Employee Turnover?
Employee turnover is when staff leaves a company either voluntarily or involuntarily. Although you can’t completely prevent employees from leaving your company, it is crucial to monitor the turnover rate to gain insights into what makes employees leave and make informed decisions to improve their morale.
What Is Employee Turnover Rate?
Employee turnover rate represents the number of employees who depart a company during a given period. To get your turnover rate, you divide the total of all the employees who leave during a specified period by the average number of workforce that work during the selected time frame. You then multiply the number by 100 to get the employee turnover rate.
What Are the Signs Employee Turnover Is Becoming a Problem?
The following are some of the signs employee turnover is becoming a problem for your company:
- Higher turnover rate than the industry average: If your employee turnover rate exceeds that of your competitors, you have reason to be concerned. This implies your competitors are gaining an edge over you. Find out what you are not doing right and remedy the situation promptly.
- There is high turnover in specific demographics or teams: If a particular group of your workforce, such as specific teams and departments or specific demographics (such as ethnic minorities, young people, and older, experienced crew members) are showing higher turnover rates, it is time to get at the bottom of the problems. Besides losing talented workers in those groups, your company will likely suffer reputational damage.
- High turnover among high achievers: A big red flag is a higher-than-normal turnover among your top-performing employees. Similarly, you should worry if you notice a high turnover amongst the most sought-after employees or those with hard-to-replace skills. Losing these categories of employees exposes your business to stiffer competition from your rivals.
How Does Turnover Impact Business?
High employee turnover has a direct impact on company revenue and profitability. The following are some of the ways turnover impacts a business:
- Increased costs: High turnover increases recruitment costs. It forces companies to continually hire and train new employees and pay them competitive salaries before they even become efficient as their experienced counterparts who just left. According to the Society for Human Resource Management (SHRM), the average cost per hire was nearly $4,700. This cost alone should be enough to make you avoid high employee turnover.
- Low workplace morale: High turnover rate results in low morale in the remaining workforce. This is because the remaining employees have to deal with increased workloads and responsibilities due to a lack of an alternative trained workforce to replace departing employees. They may also suffer low morale when they struggle to learn new job duties and procedures.
- Decreased productivity: Employee turnover can lead to reduced workforce productivity. This implies that your business may fail to meet its goals if employee turnover is an issue. If your turnover rate is high, you may be forced to spend a lot of time and resources on recruitment and replacement activities rather than focusing your efforts on increasing employee productivity.
- Reduced product or service quality: High employee turnover hurts productivity resulting in subpar quality work. When you are forced to engage a few inexperienced employees to complete crucial tasks, expect the quality of the product or service offering to go down.
- Reduced revenues and profitability: Lower quality products or services and poor customer experience lead to loss of customers and customer referrals. This increases the cost of acquiring one-time customers while lowering your revenues and profitability.
Why Do Tumultuous Times Exacerbate Turnover?
There is no doubt tumultuous times worsen employee turnover rates across all industries. According to the US Bureau of Labor Statistics, about 4.2 million people willingly quit their jobs in December 2021, at the pandemic’s peak. Experts reveal that nearly half of the employees who left the workforce during the pandemic are not returning.
The spikes in voluntary attrition during hard times may be due to poor pay despite working in extreme circumstances for extended periods. Experts also reveal during tumultuous times there is higher competition for talent, which results in in-demand workers leaving one job for a similar but better one at another company.
7 Ways to Prevent Turnover During Tumultuous Times
Organizations have had to deal with a unique landscape related to the recent pandemic, recession, and other global events that have spurred an increased turnover. Before improving employee turnover, it is crucial to identify the reasons behind it. Fortunately, one can use several tactics and techniques to prevent turnover during tumultuous times.
These strategies include the following.
Streamline Your Recruitment Strategy
The first step to creating an excellent company culture that delivers a higher retention rate is hiring the right employees. If you are experiencing high turnover rates amongst your new hires, it is a sign you are not choosing the best candidates for the kind of job on offer.
Revamp your recruitment process to ensure you are hiring qualified employees who fit seamlessly into your company values. Having the right set of employees makes creating a great culture that makes employees feel part of the company easier.
Train Your Staff
Once you have recruited the right companies, ensure you train them properly. Onboarding through training helps employees acquire the right skills and competencies that boost their morale and confidence. Experts reveal the first few weeks for new hires are critical to whether they will become long-term employees or short-term employees who will leave as soon as new job opportunities emerge.
Making sure your new hires are well supported during the early days is an effective way to make them feel wanted and valued. This could result in higher loyalty rates toward your company and brand. Loyal employees are likely to stay with you even in tumultuous times.
Elicit and Address Employee Feedback
Thriving businesses value communication. One way to increase employee retention is by facilitating a culture that fosters open communication. Apart from giving your employees timely feedback, ensure you also elicit feedback from them.
Conduct regular meetings and employee surveys to gain valuable insight into their challenges, needs, and opinions. Typical causes of high turnovers, such as poor work-life balance, lack of career growth, and management conflicts, can be quickly addressed when leaders listen to and address employee concerns.
Recognize and Reward Your Team
Highly valued and loyal employees are more likely to stay with you during tumultuous times. Engaging, motivating, and recognizing your current employees for their efforts is crucial, especially during tough times. Apart from rewarding performing employees, provide opportunities to help them advance in their careers.
These may include offering training and career advancement opportunities and facilitating them to take on new, more challenging projects. You should also implement robust employee recognition programs that help your employees feel valued and appreciated.
Review Employee Pay and Benefits
One of the reasons employees cite leaving employment is poor pay. Regularly review employee pay and benefits as often as you can to boost employee morale. The longer the employee stays with your company, the more they become experienced and skilled, and you should make an effort to reward them based on their expertise.
Offering competitive pay and benefits makes your workforce feel valued. With the stiff competition for talent, offering better pay prevents your employees from seeking employment elsewhere.
Encourage a Healthy Work-Life Balance
In a recent industry survey, 57% of respondents reported opportunities for work-life balance were one of their top considerations before accepting a job. Offering unique perks that help employees achieve work-life balance, such as annual travel, longer leaves, and a flexible work schedule may help you retain your workforce for longer.
Allocate the Right Resource to the Right Job
When leaders allocate a task to a resource that doesn’t align with the employee’s skill set, the workforce becomes disengaged, ultimately reducing productivity. If the resources are underqualified, employees feel frustrated and are more likely to experience burnout.
If the resources are overqualified, employees will likely lose interest and feel their potential is not realized, which eventually increases the chances of turnover. Allocating the right resource to the right job is therefore crucial for employee success.
Decrease Staff Turnover With Refresh Solutions
In the current highly volatile business environment, reducing staff turnover should be a priority for any business looking to sustain its competitiveness. Although some employee turnover is unavoidable, losing too much top talent too soon can hurt your company.
In the current tumultuous period, organizations must build and retain an efficient resource pool to guide the company through the treacherous paths to profitability. Employee expectations today are beyond an attractive paycheck. Talented employees value a rewarding work environment that gives them opportunities to grow and excel in their careers.
At Refresh, our platform helps organizations deliver personalized, non-pragmatic, and purpose-driven recognition that makes employees feel highly valued. Contact us today to schedule a demo.