Employee turnover can be surprisingly expensive for your business. Estimates of how much it costs vary greatly—ranging as high as 200% of the annual salary of a departing employee. Reducing turnover is even more important today as Canada faces a growing shortage of skilled workers and younger employees are becoming more demanding.
Here are some tips to help you reduce your staff turnover.
1) Study your turnover
Take a close look at why employees left in the past few years. Focus especially on high-performing workers, whose departures cost you the most. Consider what you could have done to encourage them to stay. One way to find out is to do exit interviews with departing employees to identify areas for improvement. Simple changes can sometimes make a big difference—for example, a more flexible work schedule or better training.
Keep in mind that departing employees may not give you the real reasons they’re leaving because they don’t want to risk burning bridges. That’s why it’s important to closely look at the circumstances that may have led to the departure.
Measure your turnover rate to track your progress in retaining employees. You can determine your turnover rate by calculating the number of employees who left your business in the past year as a proportion of your total workforce. You can also break down the rate for specific departments.
2) Be a great place to work
Having a positive culture and engaged workforce is key to keeping staff. If they’re motivated they’re more likely to stay. Ask your employees what they like about your business and what could be improved. Anonymous surveys with assured confidentiality are a good way to ensure you get honest feedback.
3) Improve your hiring
Hiring the wrong people is a major cause of high turnover. Recruitment is the first step in the employee relationship. You should hire people not just based on qualifications, but also their fit with your team and their desire to be part of your business. It’s also important to properly onboard new employees. This can include assigning a mentor or buddy, providing a suitable workspace and ensuring adequate training.
4) Review pay and benefits
Compare your compensation rates to the competition to see if you need to make changes. Pay and benefits aren’t usually the reason people start looking for another job, but can help tip the scales in a decision to leave. Be creative with low-cost rewards, such as flexible work hours, employee discounts or a weekly fruit basket. Your compensation system should be clear to employees so pay and benefits don’t appear subjective or mysterious.
5) Train and promote employees
If you invest in training your employees, they will feel valued and more committed to the future of your business. You should also look for opportunities to provide them with new experiences and greater responsibilities. One of the top reasons people leave their job is lack of career advancement opportunities.