There are many critical responsibilities on the shoulders of every business executive. Perhaps paramount is the responsibility, as author James C. Collins said, “Get the right people on the bus and in the right seat.” The corollary to that is anonymously stated as “When you find good people, keep them close.” Preventing unwanted employee turnover is essential to keeping good people. Finding and retaining the best possible employees is critical to today’s business success.
Why Do Employees Leave?
Probably no employee starts a new job planning to quit. Yet, they do quit for the following reasons, resulting in the various problems of employee turnover:
- Conflicts or difficulties with a direct manager.
- Lack of a positive or fulfilling work environment.
- Unchallenging work.
- Limited independence or flexibility.
- Problems with or even perceptions of a company’s financial stability and marketplace performance.
- Limited performance-based rewards or lack of recognition.
- Limited ability to contribute to the “bigger picture” of the business.
- Lack of opportunities to grow; to expand the personal skill set.
These issues result from the ways a business treats its people. As business executive and entrepreneur Richard Branson said, “Train people well enough so they can leave, treat them well enough so that they don’t want to.”
The Costs of Employee Turnover
The Work Institute reported that 27 percent of U.S. employees left their jobs voluntarily in 2018—an increase of 88 percent since 2010. According to the Center for American Progress, the cost of replacing an employee ranges from 10 to 30 percent of their annual salary, depending on the employment level, industry, and length of employment. Employee turnover costs include hiring new employees, including advertising for positions, interviewing, and screening. And, onboarding new employees, including training and management supervision time.
The Other Problems of Employee Turnover
Not only is employee turnover a cost issue, but it also has these far-reaching consequences:
- Interruption and loss of productivity as each new person “comes up to speed” with his/her role and duties in the organization.
- Lost engagement and morale impact as other employees see the turnover and wonder why.
- Customer service problems and errors as new employees undertake their work.
- Training costs for new employees.
As American writer Finley Peter Dunne stated, “Continued focus on employee turnover is of critical importance because of the direct relation of turnover to improvements in labor costs and guest satisfaction.”
I Want My Employees to Stay—Here’s How
Taking these proactive steps will result in improvements to employee retention and reduced employee turnover:
- Hire the right people in the first place. Be intentional and exacting about the qualifications and character of the people you hire so that they “stay on the bus.”
- Give new hires the right working opportunities; a role and assignments that keep them engaged and growing with the company.
- Offer competitive and comprehensive compensation packages.
- Respect employees. Make sure that they feel the trust of the organization and that they feel an umbrella of safety around them.
- Give continuous performance feedback and provide performance recognition. Show sincere appreciation and praise
- Engage employees. Involve them in decision making and keep them informed.
- Provide employees with opportunities to increase their knowledge and skills.
- Prioritize employee happiness and hold regular employee celebrations.
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