Successful businesses know how valuable their employees are. With labor costs increasing and employees leaving organizations, businesses can lose out on making profits. The employee turnover rate of a business is essentially how frequently the employees of that business end up leaving.
The employee turnover rate can be calculated on a monthly, quarterly, or even yearly basis. The turnover rate will include both voluntary turnovers as well as involuntary ones. This means that it will include whether employees left for personal reasons, to pursue another job, or to further their education.
These reasons are seen as voluntary. Involuntary turnovers refer to those instances where your business lets go of one or more employees either due to their performance or due to business violations, etc.
Why should you reduce employee turnover?
Although the employee turnover rate can vary from industry to industry, the signs that an employee is leaving are pretty standard. Mostly, employees leave to earn more money or to progress further in their careers.
When too many employees start leaving your business, this can affect profitability. Your business needs to have enough people with the right set of skills to deliver on your business objectives and plans. It’s also more costly to find and train new employees than it is to retain the employees you already have.
So, how can you reduce the employee turnover rate of your company?
Offer competitive salaries
You should know what the market rate is for what you should pay your employees. Pay them slightly more than what the average market rate is to induce them to stay. You can also provide your employees with compensation, as well as time off.
When you offer competitive salaries, your business is more likely to attract the right talent. You should also provide your employees with raises, especially for positions that are usually hard to fill. Employees that have skills that are more in demand should be offered more. When your business corrects pay imbalances and also provides employees with regular raises, the employees are less likely to leave.
When it comes to reducing the employee turnover rate of a business, employees that are rewarded and recognized are less likely to leave. You can simply recognize them for their efforts verbally or present them with more career opportunities as a reward. You can also ask your business managers to get feedback from the employees regarding their work experience.
Workers who report more positive feelings when they’re at work are less likely to leave. It’s been seen that the employee turnover rate of a business that rewards and recognizes its employees is usually much less.
Employees are looking for more job flexibility. Offering your employees flexibility doesn’t just mean that you allow them to work remotely. It can also include allowing your employees to work at flexible times, allowing job-sharing, rotating the days they should work from the office, and more.
It can be challenging to manage remote workers, but with more and more employees wishing to work remotely, your business should consider this option as well.
Developing work culture
The employee turnover reduction rate is also related to what kind of company culture employees find themselves working in. If employees enjoy working for your business, then they are less likely to leave. Your company culture should be aimed at retaining the best of your employees.
First, identify the current culture of your business. Then, note whether there’s a culture of collaboration and cooperation at your business or not. Do your employees enjoy open channels of communication with their superiors? A company that values its employees is more likely to have employees stay back and continue to work for that company.
Improving employee retention is important if you want your business to grow and prosper. Instead of continuously needing to find new talent and train them to work for your company, retain the employees you have now.
Your current employees already know how to work for your business and are more likely to help you achieve your business objectives. Use this guide to learn why employee retention is important, as well as how you can better retain your employees.