Many companies across all industries are struggling to hire quality employees and keep them. The complaints that I hear most often from company owners and leaders are relentless turnover and attrition. Employee attrition is a huge problem. Once hired, some people don’t even show up for their first day of work or quit after a few weeks.
Therefore, company hiring and training costs have surged. These challenges are compounded by poor employee attitude, a sense of entitlement, and hires lacking the internal motivation to do the work.
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Turnover Trends and the Great Resignation
With employees quitting jobs and creating a high turnover ratio in 2021 has been termed the “Great Resignation.” The U.S. Bureau of Labor Statistics reported a 57.3 turnover rate with 4 million employees quitting their jobs in July alone. This predicament is costing businesses a lot of money.
Consider the fact that it costs about 15 percent to replace an employee. In other words, if you have 100 employees making $50k per year on average, then hiring one new employee who makes $60k will cost your company around $77k.
Sure, employee turnover isn’t necessarily a bad thing if an employee is not the right fit for your company. There are some employee turnover rates that you should aspire to have.
At the same time, employee attrition is a major issue if your company doesn’t meet its goals or achieve success with its customers. And it’s estimated that a staggering 75% of the reasons for employees quitting can be prevented. Don't let your valuable employees jump ship!
Employees are demanding more from employers these days in the way of perks, benefits, and flexibility with their schedule to allow for kids or other family responsibilities.
Voluntary turnover will most likely result from failing to invest in a more fulfilling employee experience and by not meeting the new demands for autonomy and flexibility at work. In fact, some employees are deliberately choosing to withdraw entirely from traditional forms of full-time employment. Working remotely in this gig economy has many advantages, and these career opportunities now compete with your workforce continually.
If you want your company to be able to compete for talent, especially against larger companies that can offer higher salaries or greater benefits packages, then it’s critical to create a culture that fosters employee engagement and employee appreciation.
Ways to Reduce Employee Attrition and Build Employee Loyalty
Top performers and those with great talent play a huge role in modeling for others, but also more quickly look for new jobs elsewhere when they are dissatisfied.
The good news is that there are ways companies can lower employee attrition through authentic leadership, open communication practices, and creating an inclusive culture where employees feel valued and appreciated. Below are some ingredients needed to create a culture that attracts—and keeps—great employees.
- Convey the company’s mission, vision, and goals to new employees. They need to know what they are working towards right from the start! The younger generations particularly are looking to support a meaningful purpose.
- Hire qualified candidates who have the right, in-demand skills for the job. Hiring employees who are not qualified is a one-way ticket to employee dissatisfaction.
- Safeguard employee satisfaction by finding out through surveys and one-on-one meetings with employees what specifically is appreciated or a perk that is undesirable.
- Help employees feel appreciated by offering them benefits they value like flexible hours, free food or drinks in the office, and other perks. Higher pay isn't always the answer; however, employees shouldn’t have to fight for salary increases either. Raise their pay when an employee shows loyalty, has excellent work habits, and is a fit for your culture!
- Reach out to employees frequently and keep an open door policy. Create a culture where every employee feels comfortable coming to you when they have questions or concerns, and address misunderstandings immediately.
- Give regular and effective feedback to employees that is meaningful and applicable. Provide specific ways for employees to improve as well as encourage and affirm them for work well done.
- Offer adequate training for new hires so that they can get up to speed quickly on their role at your company. Sufficient training will save time and money in the long run, but it’s also another way of showing employees that you value them by investing in their skills and personal development.
Often, employers resist paying more in an hourly rate or salary. However, employees leaving is costly—that's why in this market, it may pay off tremendously to raise employees’ pay instead of losing them.
Also, paying close attention early on during the hiring process is critical if companies want to avoid serious financial consequences later down the road.
How to Create a Thriving Culture Employees Love
Statistics show that people leave their jobs because they don’t feel like they belong, have support, or feel valued and respected. While employee turnover isn’t always an easy problem to fix, you can take steps. Managing turnover requires intentional focus. Mindful leadership also insists on having deliberate conversations with active measures for avoidable flight risks.
One of the best ways to lower employee attrition is with employee engagement by enhancing the culture to be open, supportive, and engaging. Certain ingredients are crucial in a company's culture today.
It is no longer negotiable for a company not to encourage differences. In this current global market, inclusivity in companies attracts a wider range of talent and better achieves high employee loyalty.
Related reading: "Employee Attrition: Why Companies Are Losing Dedicated and Talented Employees."
Creating thriving teams with engaged team members becomes an unbeatable magnet for your company's culture. By improving the employee experience, you will organically enhance engagement and the company's culture. Below are some key ingredients.
- Make sure your company culture is open and inclusive, so employees feel welcomed.
- Make employee development a priority so your employees can grow and gain new skills, create new career growth, and maximize high performance. Development opportunities are vital for employees who desire a challenge and to be their best. High performers love to be challenged.
- Employ qualified candidates and give them ways to feel valued.
If you hire employees that don’t have solid skills or high standards, you can’t expect the same caliber of work. Give them challenges to engage and generous recognition and appreciation.
- Set realistic employee expectations from the beginning.
Don’t promise a high salary or other benefits you can't afford to give them, but once they prove themselves pay them what they’re worth.
- Ensure that your managers have training in employee engagement. They must have people skills, including empathy. Regularly expressing sincere appreciation and helpful feedback keeps morale high. If managers aren’t capable of connecting with their direct reports then those employees likely won’t feel valued or supported, diminishing what could be a rich work environment. Managers should set employee expectations, provide employee training, ensure employee motivation and engagement through accurate and meaningful feedback.
- Offer regular employee feedback on performance (or lack thereof) to ensure they get the resources they need. Some employers err by repeatedly rescheduling employee reviews or neglecting to have them at all. Employees need to know where they stand and ways to improve.
- Plan for employees to share their expertise with their teams, which gives you plenty of opportunities for employee engagement and you'll get some of the best training with half the cost. By including your highly-skilled and loyal employees in training programs, you will also lay the ground for career paths and career growth that may not have been evident without this chance to see them in action. An added bonus will be helping employees feel valued while elevating your company's success.
- Provide options and perks to enable employees opportunities for greater self-care and better work-life balance. Allowing remote work, especially for parents, will afford flexibility and lower travel costs for employees, which could assist in employee retention.
Effective Communication Is the Foundation of a Thriving Culture
The final way to reduce employee turnover is through effective communication.
When good communication is a priority for a company, the leadership sets up systems that streamline communication, address and solve problems quickly, and include the employees in helping solve issues.
Company leaders who don’t create a strong foundation for smooth communication waste time and resources through miscommunications, chaos, lost opportunities, unnecessary problems, and increased workplace conflict and stress. A lack of communication is often the culprit leaving a wake of negative consequences.
If done well, effective communication practices could be one of your best tools for mitigating turnover. Retain employees more readily by initiating a few of these tips.
Related reading: Good Communication Is Vital for a Successful Business
- Regularly checking in with your teams on their progress, challenges, or issues affecting their role at work can help boost employee morale while reducing turnover risks.
- When an employee shares their perspective or challenges, listen completely and attentively.
- Make sure you follow through on any promises made during conversations, too. Keeping your word will go a long way to building greater trust and setting an example for others. Commit yourself to be one who is known for keeping their word.
- Recognize that we all perceive the world differently. Use this awareness to listen with an open mind and as a guide to effectively communicating.
- At the core of all effective communication is a foundation of trust. Build greater trust and communication will be easier.
Authentic leadership and well-prepared managers can create an environment of inspiration and inclusivity. If employee turnover has been plaguing your business, it may be time to take a look at some of these employee engagement strategies that we’ve discussed.
And if you’d like support, greater emotional intelligence, and expertise creating a thriving culture, cultural transformation is Heartmanity’s specialty. Contact us today at email@example.com.