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retain employees

4 Ways to Avoid the Dreaded High-Turnover Rate

The cost of employee turnover is outrageously high. When a company loses a salaried employee, it can cost anywhere from six to nine months’ worth of the departed employee’s salary to hire a replacement. This means that if an employee is being paid $40,000 a year, the cost of everything from recruiting to training expenses will be around $20,000 to $30,000. In addition to costing your company a fortune, it can discourage talented employees from joining your organization. High turnover is one of the major red flags job seekers look for when considering a new employment opportunity.

Here are four ways companies can step up their game and hold on to the talented employees they worked hard to acquire:

  1. Get Rid of Top-Down Management

Everything in the business world is evolving and the concept of management is not immune. Many of the old rules and practices no longer apply, and the lack of a modern workplace philosophy is forcing skilled workers to leave their current company and take their talent elsewhere. The top-down approach to leadership and ruling with an iron fist is no longer a popular way to run a business.

In today’s workplace, the term “collaborative leadership” is commonly cited as a strong approach to employee management. This concept emphasizes leading by example and focusing on both corporate and individual benefit. For instance, Jacob Morgan, author of The Future Of Work, explained in a Forbes article how AMP Bank in Sydney, Australia makes it a point to sit down with each employee to explain how new technologies and strategies can benefit both parties.

It’s important to realize the vital role management plays in the development of a company. Gallup estimates that managers account for 70 percent of the variance in employee engagement scores across business units. Great leadership is a crucial factor in retaining employees; it goes back to the famous saying that “people don’t leave jobs, they leave managers.”

  1. Learn What Millennials Want

By 2020, it’s estimated that nearly half of the workforce in the United States will be comprised of millennials. Therefore, it is crucial to determine what these younger employees want out of a company. Ask yourself the following questions:

Millennials are looking for more than just a job with a steady paycheck, they want careers in which they are engaged with their company’s goals, and can develop their professional skills. A 2014 survey conducted by the Harvard Business Review and The Energy Project found that employees are most engaged when these four core needs are being met:

  • Value – Being cared for by their supervisor
  • Purpose – Finding significance in their work
  • Focus – Prioritizing
  • Renewal – Ability to take needed breaks

Regardless of the age of the employee, there is nothing worse than being stuck at a job that isn’t motivating. Fostering employee engagement can be difficult. However, emphasizing honesty and transparency for both company and employee alike can be integral in obtaining uninhibited employee feedback to gauge the direction of your workforce and what motivates them.

  1. Promote a Culture of Innovation

Everyone wants to be involved in a cutting-edge organization. Companies that want to remain ahead of their competitors must do their best to promote this mindset both internally and externally. For starters, when you’re advertising a job opening, take a step back and examine what your company is doing differently than similar organizations. Once you have a firm answer, drive this idea home and showcase what your business is collectively bringing to the big picture compared to your competitors.

Based on your business, this can be a daunting task. But, regardless of what product or service you provide, there is always room for innovation. Take Michelin for example. Tires might not seem like an innovative product but the science behind how rubber interacts with the road is complex. To promote a company-wide innovative mindset, Michelin sponsors cross-functional hackathons and internal incubators where employees are free to take risks and come up with new ideas for the good of the company.

Making sure that innovation is a strong aspect of your culture can play an enormous role in keeping employees engaged and motivated.

  1. Recognize and Reward Employees

While this one might seem obvious, it is still accurate: everyone likes to know their hard work is being noticed. Great employees are hard to find, and even harder to keep. So when you notice colleagues going above and beyond the call of duty, it’s important to provide plenty of recognition and rewards to encourage repetition. Recognition is essential to employee engagement and The Corporate Leadership Council shared in a recent report that highly engaged employees are 87 percent less likely to leave the organization.

Events like company-sponsored happy hours or weekend getaways celebrating a strong quarter can go a long way in demonstrating to employees how much their work means to an organization. Going beyond these types of “job well done” gestures, making sure top performing employees are appropriately compensated is the most important factor in employee retention.

To address this, you can try setting up recognition and rewards programs that encourages daily praises and constant appreciation. Or consider implementing programs within the workplace that are transparent when it comes to pay raising goals, such as merit-based pay structures. Just be sure to set goals at a level in which employees will need to put their best foot forward, while remaining reasonably attainable.

Talented workers tend to know their worth. If you are not paying them appropriately, they will have no problem finding an organization that will.

Over to You

Retaining high performing employees in the current business climate is very challenging, and with the many detrimental costs of employee turnover, your company’s bottom line could be adversely affected. If your turnover rate is higher than you would like, it might be time to take a close look at day-to-day operations and find the root cause as to why people are so willing to leave your organization. Sometimes, it is a simple fix. Other times, a complete organizational reinvention is needed to ensure the external perception of your organization matches the internal. At the end of the day, a company that focuses on engaging their employees, whether through strong leadership, culture, recognition, or rewards is on the right track to reducing turnover.

To learn more about employee turnover, check out the blog post How to Spot Who’s Going to Quit Next.

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About the Author
Lori Wagoner is a market research consultant. She advises small businesses on new ways to find local and national business. She’s an avid blogger and writes for sites such as Small Business Can, Tweak Your Biz and Customer Think. You can catch her on Twitter @loridwagoner.

 

Reasons to welcome the millennial influence

The Demands of Millennials Make Our Workplaces Better

For all the complaining about Millennials and their approach to the modern workplace, they are actually responsible for much of the change happening in the modern workforce. Their entry into the workforce, was accompanied by a slew of stereotypes, followed recently by a round of myth-busting, with statistics and all, aimed at debunking those stereotypes. As an “ancient Millennial” myself (a term I borrow from journalist Jessica Grose), I can attest that at least some of the stereotypes come from kernels of truth, but like most stereotypes , they must be taken with a grain of salt. More importantly, many of the changes Millennials bring to the workplace are actually good for everyone. Change is always hard, so it’s natural to initially oppose or question the forces of change. However, most of the changes that Millennials have brought about have actually made for a better workplace.

The influence of the Millennial generation is not to be underestimated, if for no other reason than its size. According to a recent report from SHRM, (“Millennials: Misunderstood in the workplace?”) as  Baby Boomers exit the workforce, an even greater number of Millennials will continue to enter the workforce to take their place. In fact, it is estimated that Millennial workers (those born between 1980 and 2000) will make up more than  half of the workforce by 2020. And, according to Pew, they already make up the largest overall share of workforce, having surpassed Gen X’ers in 2015. With those facts established, here are four reasons to welcome the Millennial influence:

Generalization #1: They need constant feedback: Millennials grew up in a feedback culture. Some say that Millennials are obsessed with getting positive feedback (you’ve likely heard of the “trophy generation”, but put simply, it is the belief that we are doing our youth a disservice by lauding them for mere participation rather than awarding success.). But even if that’s true, it likely contributed to an encouraging new trend – the phasing out of annual performance reviews. An annual performance review simply doesn’t tell us enough in today’s fast-paced business culture. If HR hears a complaint about an employee but their 8-month old performance review shows high marks, that documentation does little to advise any action. In 2017, we will likely see employers implement more regular feedback conversations along with frequent “pulse” surveys to help identify and address employee concerns in a more timely, actionable fashion.

When employers engage employees in regular, smaller-scale conversations, both management and employees are better equipped to deal with issues as they come up. This in turn helps employees to feel more engaged because they know their suggestions and concerns are being listened to. Furthermore, by combining these mini performance management conversations with real-time feedback tools for employees, management can help facilitate a culture of transparency in which both positive and negative business outcomes can be celebrated or addressed openly.

Generalization #2: They demand more work life balance: One of my favorite Millennial trends is that men are beginning to demand more time with their families. They ask for paternity leave more than their fathers did, for example. And because married Millennials overwhelmingly co-lead a dual-income household, they can’t buy into the 80-hour work week like their fathers did before them. As a recent article in The New York Times put it: “Millennial men—ages 18 to early 30s—have much more egalitarian attitudes about family, career and gender roles inside marriage than generations before them, according to a variety of research by social scientists. Yet… workplace policies have not caught up to changing expectations at home.”

Likewise, a Department of Labor report also highlighted the growing importance of paternity leave as men consider whether to accept a job, noting: “Paid paternity leave may be a key workplace benefit for retaining high-skilled workers. In a 2014 study of highly educated professional fathers in the U.S., nine of out ten reported that it would be important when looking for a new job that the employer offered paid parental leave, and six out of ten considered it very or extremely important. These numbers were even higher for millennial workers.”

Millennials came of age watching their parents work long hours and aren’t convinced it translates to a happier existence, or even a fatter nest-egg for themselves. With this in mind, employers would be wise to encourage work-life balance in the name of productivity and worker satisfaction. Even the U.S. Commissioner of Labor Statistics agrees that hours with your butt in a seat does not equate to more productivity, “Only if we increase our efficiency—by producing more goods and services without increasing the number of hours we work—can we be sure to increase our standard of living.”

Generalization #3: They need hand-holding. It’s true that most managers don’t have time for hand-holding. However, research published in the Journal of Workplace Learning shows that companies who have a “culture of learning” rely not just on managers to disseminate information. Not only does their training help them perform their job functions better, but employees who are able to embrace learning and growth opportunities also feel more valued and engaged, doubling the value for the company. Learning can happen anytime, often facilitated by a co-worker (“Contextual factors influencing the facilitation of others’ learning through everyday work experiences” by Andrea D. Ellinger Maria Cseh), so managers don’t have to feel the exclusive burden of teaching their staff everything.

Generalization #4: They feel entitled to career advancement: Climbing the corporate ladder just isn’t as important to Millennials as it was to their parents (see Generalization #2: they value more work-life balance.) When they see their managers put in long hours at the cost of their personal lives, it doesn’t look appealing. In addition, Millennials learned the difference between “management” and “leadership” before they even entered the workforce, and the 80 hour week management job that only serves to maintain the status quo is not their idea of having an impact. Millennials might feel entitled to advancement in a different sense. They want to keep learning and keep contributing. If other generations in the workplace adopted this sense of motivation, you might not see a scramble to fill the senior manager job, but you’d have leaders everywhere.

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About the Author
Anna PetersAnna Peters is Content Manager for College Recruiter. She manages all content, supervises a team of content writers and is part of College Recruiter’s senior management team. Her prior experience at nonprofits has made her an expert in directing volunteer recruitment and a champion for diversity and inclusion efforts. Connect with Anna on LinkedIn.