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In a previous article titled ‘Why Employee Engagement Is Good for Your Business’’, we discussed a few simple strategies that help keep your employees happier and more productive at work. One of the main benefits to implementing these strategies is to reduce employee turnover.
Most business owners agree that it’s costly to lose an employee. But how much does high turnover really cost? Studies estimate that employers will need to spend the equivalent of six to nine months of an employee’s salary to find and train their replacement. Costs can be even higher, up to 300% of the salary, for a highly trained or executive positions. (Use this turnover calculator to estimate your turnover costs.)
This churn can also damage the morale of existing employees. With the marketplace for talent becoming increasingly competitive, how do you ensure that you are still getting the best employees for the long haul? Here are three ways that business owners can reduce turnover and keep employee morale up.
1. Hire the Right Employee from the Start
This might seem obvious, but hiring the right employee from the start is the single most important aspect that will keep employee turnover low. Sometimes, employers rush the hiring process and choose someone to fill the position quickly, rather than waiting to find the right person for the job and the company. The decision should not solely be based on whether the employee has the required skills or experience; but also on whether they are good fit for their existing team and culture. Asking important questions such as, ‘Does their personality match those of our employees?’ and ‘Do their values align with the values of our business?’ can help owners find the right employee. Though the hiring process might take longer in the short term, taking the time to hire the right employee can save business owners so much more in the longer term.
2. Create a Positive Working Environment
Statistics are now showing that 40% of the workforce are Millennials. And, that number is said to double over the next 10 years. That means it’s more important now than ever before to create a positive office environment and keep these young and independent minds engaged. According to a a study by Gallup, “Millennials apply the mindset of "change" to the workplace. They want to be free of old workplace policies and performance management standards, and they expect leaders and managers to adapt accordingly.” This means minimizing corporate politics and creating environments where employees are encouraged to make mistakes and speak their minds. Giving employees more freedom to realize their own potential, and training management to act more as mentors and less as bosses can heighten job satisfaction and productivity for this younger generation. When these employees can take more ownership for their contribution, they can thrive as thought-leaders and make the company stronger.
3. Recognize and Reward Your Employees
Employees need to feel connected and valued in their work environment. For various reasons, this can sometimes be overlooked. Whether it’s the completion of a small task or a big project, regularly recognizing their contributions can make all the difference. It can be simple email to say ‘Job well done!’ or it can be a team lunch for no other reason than ‘We appreciate you.’ It’s these moments of recognition that will keep employees engaged and happy at work. Managers at all levels can also cultivate and reward teamwork, because positive outcomes are rarely the result of one individual. Letting an entire team know they have done a good job encourages them to look at tasks more holistically, which results in better comradery and a stronger company culture.
Building Up Employee Retention
As the search for talent continues to become more competitive, it’s up to management and business owners to find new ways to retain employees. Taking the time to hire the right employees, creating more liberating and positive work environments, and recognizing teams for great work can help build employee loyalty, and ultimately, reduce costly turnover.
Whether you are with a business, association, or owner operator, we have the solution for your needs.