In a strong economy, employees know they have options. Sooner or later, workers who aren’t satisfied with their jobs start searching for opportunities with other companies.
Although this is good news for employees, it can be a problem for employers that are unaccustomed to an employee-driven market.
Companies that do not understand (or are unwilling to make) the necessary adjustments inevitably pay the price in turnover. According to one study, employee turnover in 2018 cost US companies $615 billion. Of that, an estimated $469 billion was voluntary turnover that could’ve been avoided.
How Turnover Happens
Although inadequate salary or benefits are common reasons for leaving a company, they aren’t the only ones. Other reasons include:
- Unclear or unreasonable job duties: Turnover is a two-way street. Employers who don’t provide accurate job descriptions, hire over- or under qualified candidates, or put too many obligations on their employees’ plates set themselves up to lose talent.
- Unpleasant work environment: Bad management is a big reason behind turnover. Aside from poor leadership, companies with outdated equipment, poor morale, or office tensions set themselves up for retention issues.
- Inadequate career development: More than nine in 10 employees say they’d stay longer at a company if it invested in their careers. Workers need to feel like they’re advancing in their professional lives, or they’ll go somewhere that they do.
- Work-life imbalance: Nobody can work all the time. Employers who insist that workers put in more hours than they agreed to, provide little or no time off for family events, or give minimal vacation time won’t keep workers around for long.
Turnover happens for all sorts of reasons. Whatever the cause, there are a few steps you can take to reduce it.
Solving Steep Turnover
To boost your company’s retention rate:
1. Ask for (and listen to) feedback.
Talk to employees who are leaving your company as well as those who intend to stay. Keep an ear out for trends: Are the leavers all upset about your company’s vacation policy? Do the people who are staying love your office environment? Make clear that there are no wrong answers, and thank the respondents for their honesty.
2. Get HR and management on the same page.
Once you’ve learned what’s pushing people away from your company, take that information to your HR and management teams. Schedule a meeting with each group to chat through it: Chances are, they have questions about your findings. Suggest action steps as well as affordable ways to reward employees for their work.
3. Decide how aggressively to fight it.
Your HR leaders and managers know turnover is an issue, and you’ve given them some ideas about how to handle it. The next step is to decide together how much disruption you’re willing to put up with.
Say you’ve heard a couple of names come up again and again in those exit interviews. You could fire the people who are bringing down the office culture, or you could put them on a performance improvement plan. Every situation is unique, so use your best judgment based on the gravity of the issue and the individuals involved.
4. Keep it up.
Turnover issues are not solved overnight. As an employer, you have to commit to the people you hire. Give team members ways to talk about issues before they boil over: Set up an anonymous comment box, and read submissions publicly.
Make retention a regular topic at leadership meetings. Measure month-by-month changes to your turnover rate, checking whether investments in retention result in dips or spikes.
Rarely does turnover happen for just one reason. The sooner you get to the root of those reasons — and the more seriously you take them — the better.