The High Cost of Employee Turnover
Hiring is no easy task, and in employee-intensive businesses, hiring can take a lot of time and energy that some managers would rather see spent on product development and sales. The real problem is that too many businesses focus on the wrong aspects. Keeping your current employees happy—from forklift operators to executives—is as important as hiring the right people for your company. Employee turnover and retention should be at the top of your employment programs. By creating good retention practices, you can create a competitive edge in your business.
Indeed, in a recent study cited in an article from the Society for Human Resource Management, one employee in three hopes to change jobs in the next six months! How can you keep your valuable staff from leaving?
Determine the reasons for employee turnover. The most important metric to track is why employees are leaving. There are plenty of reasons having nothing to do with the company itself, such as life changes or relocation. But what if the reasons are closely related to the company and its management? Are your employees leaving because they dislike management, co-workers or the jobs they’re doing? If so, you have the power to make these things better. As each employee leaves, your focus turns to replacement rather than retention. These costs go beyond salary and benefits. Your time is also valuable, and the more time you spend searching for the right candidate, the less you can give your own job duties.
It would be easy to say “Just pay more money.” But there are plenty of other factors that affect employees’ decisions. As noted in the SHRM article, 42 percent of respondents would leave due to a toxic workplace, and 31 percent would leave if there were problems with work-life balance. So you have to consider a range of incentives to keep valued employees.
Think about the environment. Your work environment—whether an office or factory or warehouse—affects how your employees perform on the job. Are they comfortable? Do they have all the tools they need—whether it’s a computer program or a more advanced cash register? If they’re running across challenges on a daily basis, this can be a long-term problem and lead to unhappy, disgruntled employees. Keeping your business conducive to innovation and productivity will cost less than replacing candidates with others who also will quickly become unhappy in the environment. Learning where to make investments to keep employees happy is the first step.
Realize why productivity levels will drop. When an employee leaves, it doesn’t affect just that job. You will lose the productivity in that aspect, but it will also affect the rest of your team. Someone will have to take up the slack and do the work of two people, and this will make that person’s productivity levels dip in both aspects, and it may start the cycle of unhappiness over again. Unhappy employees also affect their co-workers. The entire team will influence each other, and one disengaged employee can start a snowball effect.