High employee turnover is a growing epidemic in the corporate world. Gone are the days when employees would find a single employer to stick with throughout their entire career.
Today’s workers stay with a job for an average of just over four years, with over half of Canadian workers looking for a new job. Compare that to the average just a few decades ago, when the average tenure at a job was ten years.
How to decrease employee turnover? Leaders at most organizations recognize how significant employee turnover is. High turnover is usually symptomatic of other issues.
If a high percentage of employees are fleeing into the night, something else deeper needs attention. Yet, most organizations gloss over turnover rates and fail to delve into how much employee turnover costs them or what they can do to reduce it.
In a case study that examined the cost of employee turnover in a sales role, it was discovered that maintaining one skilled worker for three years rather than two might result in a $1.3 million savings for the business.
That figure factors in the time to hire a replacement, onboard and train them, and ramp them up to consistently match the sales target of their predecessor.
Sales are known to be an especially tough field. Yet, if you go with a conservative estimate, replacing the average employee will cost an employer about 1.5 times their annual salary.
So if an employee makes $50,000, you can expect to lose $75,000 finding, hiring and training their replacement.
That’s still no small figure to write off, especially when you multiply it by a high number of employees leaving.
what’s the real impact of employee turnover?
Employee turnover is about more than just losing a great employee. When someone leaves your organization, it triggers several costs in finding and training their replacement. Some of the costs associated with turnover include:
- lost productivity while the job is vacant
- promoting the open job
- screening, reviewing and interviewing applicants
- training and onboarding the new hire
- fixing mistakes made by inexperienced employees
- low employee morale and overall work environment
a strong employer brand to the rescue!
Job boards make it incredibly easy for workers to share their experiences or air grievances. When your employees are unsatisfied and they share their stories with the public, it can hurt your employer's brand as a whole.
Suddenly, a few upset employees are influencing the opinions of hundreds of other potential employees researching your company and deciding whether or not they want to work for you. It can quickly snowball.
How to reduce high employee turnover? To avoid this type of public relations nightmare, make it a priority to build a robust and decisive employer brand that considers what your employees want.
download our employer brand research 2023 report
And gain insights on what job seekers are really looking for in their next employer.
download the reportBuilding your employer brand won’t happen overnight and will require constant attention to be maintained. Some ways to strengthen your employer brand:
- ask for employee feedback regularly. Send out surveys and emails, and have an anonymous tip box, to help understand better what your employees are looking for from their work lives and you as an employer.
- give everyone a forum to voice their opinions. Giving every employee, no matter their seniority or job title, a chance to speak up will ensure they don’t feel the need to turn to social media to be heard. Provide employees with a no-judgement zone to openly discuss personal work issues If employees feel confident they can bring their issues to leaders or HR, you can resolve problems before they snowball.
- make communication and transparency a priority. Keeping secrets and covering up bad news will only lead to low employee morale and fearful employee behaviour. Be open and honest with employees, good news or bad, and communicate status updates regularly.
- prioritize a company culture where everyone is welcome and feels valued. Make sure diversity, inclusion, and different opinions are welcome. An organization that allows open discussion is stronger than one that zeroes in on a single point of view.
- make company goals and priorities clear. A team that’s aware of what they’re working toward will be more productive. If everyone’s on the same page, working together and achieving great things is easier.
- make problem-solving a priority—companies that don’t fix problems that are brought to their attention by employees need to take them seriously. Make a sincere effort to fix underlying policy issues and big-picture things repeatedly causing problems.
what matters to employees to decrease turnover
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1. meaningful pay
When you factor in inflation, most middle-class employees haven’t received an actual raise in decades, and they’re well aware of this fact. Workers realize they aren’t getting ahead financially by accepting yearly raises that barely keep up with inflation.
As organizations constantly look for their bottom line, employees consider their expenses. If heading out onto the job market will give them a 20% raise, staying with their employer means settling for just 2%.
There’s a good chance they’re leaving for that shiny new opportunity unless you’re offering something else of significant value.
When creating your organizational compensation structure, ensure that there are processes in place to ensure that salaries for all jobs keep up with current market rates. Also, ensure that employees receive regular raises based on merit.
Providing raises to your employees is a powerful way to express appreciation for their hard work.
By offering meaningful pay, you not only foster a sense of value but also actively contribute to reducing employee turnover and retaining top performers within your organization.
To effectively address high turnover rates, it's crucial to prioritize competitive and meaningful salary packages.
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2. benefits that are actually beneficial
According to a MetLife study, 60% of employers found that health benefits helped their staff become more productive.
Offering your employees benefits they actually want and will use is a way to help reduce employee turnover.
Adding in foosball or free drinks into the employee break room won’t cut it. However, staples like health and dental, retirement plans and health and wellness tools will rarely be met with disdain.
Benefits in these areas almost always go over well:
- health and dental insurance and benefits
- retirement plans such as pensions, RRSPs and TFSAs, particularly with employer matching
- stock purchases, in particular if they include employer matching
- additional vacation, sick or personal days above what’s legally mandated
- flexible work schedules, such as reduced hours or the ability to work from home
- bonuses or other financial rewards on a scheduled basis (typically quarterly or annually)
- mental health and wellness or fitness perks (i.e. free gym membership)
Find out more about the health and wellness benefits that employees want.
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3. upskilling and advancement opportunities
Career development is important to employees and companies. Driven employees aren’t happy sticking with the status quo for long; they want to know what’s next in their careers.
These ambitious, forward-thinking employees are exactly the type of people you want working for you. Upskilling and reskilling make it easy for employees to see how their company cares about their skills and progression.
Make upskilling from within a priority and offer training and development programs to show you prioritize employees’ upward career trajectory.
Suppose your organization doesn’t provide a clear pathway to advancement. In that case, you can be sure that once employees find themselves at an impasse, they’ll start looking outward to find new opportunities to fulfill their career goals.
Upskilling and prioritizing career advancement in your company culture will help reduce employee turnover. This is because employees will clearly understand where they can grow in the company.
Download our guide explaining what is upskilling and how do you help employees achieve it?
make a difference by paying the appropriate salary rates
Want to know more about salary ranges or discover what drives talent away?
get the salary guidedecreasing your employee turnover
Making even a small effort to lower employee turnover can dramatically reduce your company's turnover. Employee turnover is just one statistic, but it’s an important one that ties in with many other metrics at your organization.
Lowering your employee turnover rate can reduce costs related to productivity and training and even change your company’s culture and morale.
A thoughtful approach to reducing employee turnover can keep employee morale up and engaged. Keep a close eye on your employer's brand and ask for input from your employees regularly.
By offering flexibility, meaningful benefits, compensation, upskilling, and career paths, you’ll highlight why sticking with your organization is the right long-term decision.
Are you facing a surge in employee turnover and urgently need to hire new talent? We're here to assist with our extensive pool of specialized professionals. Reach out to us today to discuss your specific requirements.
If you prefer coaching or implementing effective retention strategies, get in touch with our HR consulting department for expert guidance.
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