5 Strategies to Reduce Employee Turnover

High employee turnover rate is a huge waste of financial resources and a productivity killer.

It costs up to nine monthly salaries to replace an employee, and the price goes up for more sought-out employment categories.

If you’re looking to improve employee retention and keep your top performers — these 5 strategies will make a difference from day one!

Get the right people on board: improve the hiring process

You know that your hiring game needs to be improved when you can’t seem to hold an employee for longer than a year. Poor recruiting skills are one of the main culprits for the high employee turnover rate, and it may look like some of these issues:

• Faulty job postings — Your job ads are incorrect or ambiguous, so the scope of the role is unclear to the candidates. Also, pay attention to where you’re advertising, and that your ads reach the right people.

• Faulty candidate screening — When you’re hiring for highly complex roles, it’s easier for recruiters to make a poor judgment on a candidate’s skill level and competency.

• Wrong culture fit — Sometimes their skills aren’t the issue, but their overall attitude, and failure to fit in with the rest of the team. 

• Poor onboarding process — Maybe it’s not the new candidates’ fault, but the ones in charge to onboard them.

• The lack of necessary skills — Some knowledge comes after years spent on certain tasks, and onboarding with additional training can’t make up for it.

These issues result in the wrong people reaching out, few of them getting in touch at all, or candidates quitting/getting fired soon after they came. 

Here’s how to start fixing things up:

• Be transparent and precise about the role, what’s expected, desired, and what you offer;
• Emphasize the importance of your company culture at every step;
• Observe candidate’s behavior and look for red and green flags alike;
• Ask the department you’re hiring for what they look for in a coworker: what kind of person should it be, what skills should they possess;
• Brush up on the onboarding process and enable feedback at every point;
• Inform and educate the recruiters about the roles.

Create viable and attractive career paths for employees

Source: pixabay.com

Recruiters often ask the candidates “where do you see yourself in five years?”, but an answer to that question largely depends on the employer.

While job-hopping is tiring and stressful, people are forced to switch jobs when they don’t see their future with their current employer. Sometimes it’s the bad working conditions or an offer that’s too attractive to miss, but lacking a perspective is a notable culprit, too.

Stable, secure, and promising positions are well-worth keeping! Show your employees they can dedicate their efforts to work without the fear of getting fired gnawing at them in the background. This way, you’ll build a loyal, thriving workforce.

Always set clear expectations for the position. Explain what the outcomes are when they accomplish everything on their plate, exceed, or do not meet the goals. Make it clear from the very beginning (by that we mean the job postings) that there is a bright future waiting for everyone, with clear steps to progress.  

Discussing career paths is a must! This applies to the possibility to switch to another position: 

1. Horizontal career move means switching to a different position, with a different skill set and compensation package. Someone changing their mind and requesting to take the HR Assistant role instead of being a Sales Development Representative is making a horizontal career move.
2. Vertical career move refers to people who “naturally” advance to a higher position in their field/team. For example, a Content Marketer moving vertically could start as a Junior Content Writer, and end up being a Chief Content Officer (CCO).

In any case, career paths aren’t linear; a green flag you can wave as an employer is to show how exactly you can support them when it’s time to switch roles.

Provide as great benefits and compensation as you can afford

Offering truly competitive employee benefits is a no-brainer. It makes employees feel comfortable and appreciative and it will make them less interested in pursuing other job opportunities. 

Here’s a checklist of attractive employee benefits you should consider offering to improve employee retention:

• Salary and salary increases when it makes sense;
• One-time bonuses and performance bonuses;
• Insurance package: extensive medical care and disability insurance;
• Sponsoring retirement plans: pension and 401k-matching;
• Paid time off — if you can afford it, paid vacation is a valuable reward;
• Company stock options (great option for startups);
• Education sponsorships — student loan assistance or tuition reimbursement, professional training, and certifications;
• Health and wellness — paid gym, mental health therapy;
• Office perks and team-building getaways.

It’s important that you’re honest about what you can and will offer, and try and find something your competitors are forgetting.

WFH is popular for a reason — let the workers have it!

Working from home brought tons of benefits for both sides.

Employees save time and money (and nerves 👀) spent in commute, can sleep in, spend more time the way they like, work comfortably, and be more productive. It benefits people with disabilities, introverts, and workers living far away alike.

On the other hand, employers can diversify their staff and hire people from all corners of the world, and save plenty of resources otherwise spent on rent and utilities for the office space.

It’s safe to say that letting people work from home is a foolproof strategy. Provide good home office equipment, put some WFH rules into effect, and watch your collective flourish!

Improve employee recognition

Source: pixabay.com

Celebrating your employees’ milestones and achievements makes them feel valued and appreciated — and gives you an additional reason to raise a glass at the end of the work week! 🥂

Work anniversaries are an especially big deal if an employee sticks around for 5+ years in the current era of job-hopping! Some companies award loyal employees with additional days off: for example, people who stay for 1 year get one more day added to their PTO the following year, and so on (with a set threshold).

Birthdays are best celebrated with a slice of their favorite cake, some company swag, or an appropriate token of appreciation.

No matter the occasion, tracking PTO is easy with a leave management tool. Vacation Tracker has a wonderfully simple system: integrate with Slack, Teams, Google Workspace, or email — and approve or request leaves from there.

Company milestones and project completions are about the team who carried the work to the finish line; branded gifts and parties are a good way to celebrate as a team.

Rewards come in different shapes and sizes: bonuses, promotions, PTO, great equipment — but verbal praise is important too. Don’t wait for performance reviews to say something nice: words of praise are always welcome and make difficult days bearable.

Bottom line

There are five essential ways to reduce employee turnover in your company:

1. Hiring the right people from the start;
2. Discussing attractive career paths with them;
3. Providing stellar salaries and employee benefits;
4. Let people work from home;
5. Improving employee recognition.

Employee retention requires a lot of work, but the results pay off in a multitude of ways: company growth and improved employer reputation are the most notable of them.