High employee turnover can be a huge drain on productivity, morale, and company resources. In fact, an employee’s departure can cost up to one-third of that employee’s annual earnings. The costs can add up quickly and the only way to break the cycle is to develop an understanding of the root cause. Here are three of the most common reasons for employee turnover – along with remedies for each!
If job duties expand without a relative increase in compensation, employees feel compelled to seek a higher-paying position. Employees are also motivated to seek higher compensation due to the rising cost of living. According to Forbes, “Staying employed at the same company for over two years on average is going to make you earn less over your lifetime by about 50% or more.”
While it’s not always possible to provide economic relief in the form of a merit increase–at least not immediately–there are still several ways to prevent employee turnover:
- Focus on collaborating with employees to create a growth plan that clearly outlines the future of their role within your organization.
- Have conversations about compensation early and frequently, communicating when they will be eligible for a significant merit increase.
- Schedule benefits review meetings to ensure all employees are aware of (and fully benefitting from) the entirety of their compensation package.
Professionals in today’s workplace have come to expect more flexibility in terms of when and how work is completed. In fact, our 2022 Talent Acquisition Poll indicates as much as 55% of people want to do their work remotely. Only 7% prefer onsite, while 38% are seeking a hybrid arrangement.
Depending on how your business is structured, the industry you’re in, and other factors, it’s not always possible to offer a formal remote work option. However, it’s important to note the two types of workplace flexibility and the differences between both:
- Informal Flexibility: An occasional exception to on-site or hybrid work policies that have minimal impact on team productivity.
- Formal Flexibility: An ongoing standard remote, hybrid, or flex work policy that benefits the employee as part of their compensation package.
While it might not be possible to provide formal flexibility, there could still be an opportunity to prevent employee turnover through informal flexibility on a case-by-case basis. For example, you might have an employee request to work remotely on Fridays due to personal hardship. In this case, you might consider making a temporary exception after formulating a plan with the employee if you’ve both determined the impact will be minimal.
Naturally, when employees perceive leadership to be uncaring or uninspiring, their work can quickly begin to feel meaningless or monotonous. Employees also become concerned when development and advancement opportunities are lacking or haven’t been discussed. When it feels like there’s no growth plan or path forward, it’s extremely difficult to stay motivated.
Consider how the organization might support leadership with the training and resources needed to develop the team. Just because a manager wants to be a good leader, doesn’t mean they know how to be a good leader. In fact, according to Science of People, here are a few core leadership skills that managers need to succeed:
- Being a role model
- Making an impact
- Focusing on following a vision
- Encouraging collaboration
- Being positive
As the saying goes, “A rising tide lifts all boats.” Training managers to be great leaders is one of the keys to building high-performing, happy teams–and ensuring low levels of employee turnover.
Did you know that nearly 52% of new hires who have been at their job for three months or less are looking to leave? In fact, the figure jumps to nearly 60% for employees in the 3-6 month phase. Be sure to read 5 Ways To Create an Employee-Focused Culture and Reduce Turnover for additional ways to break the cycle!