The Key To Lower Turnover
In our last post, we discussed how ineffective onboarding can lead to higher employee turnover, forcing companies to reopen the job search so soon after completing it. But the threat of turnover lasts beyond an employee’s first 90 days, and costs significant time and economic expense to set right. How can companies keep employees from giving in their resignations?
The Added Costs of Turnover
According to the Center for American Progress, the typical median cost of turnover in an average position is 21% of an employee’s annual salary. Meaning the cost to replace an employee is a full one -fifth of that employee’s wages. This cost is shown to be even higher for more specialized jobs requiring certain skills or education.
Considering the gaps left by an employee’s departure, this makes sense. Between the costs of going through the hiring process, training the replacement, and covering job duties in the interim, it all adds up. And that 21% does not include indirect costs of turnover, such as lost productivity, lost client contacts, and lost morale among remaining employees. With one-fifth of workers leaving jobs each year, and one-sixth let go due to issues like poor performance, companies need to pay attention to turnover and how it can be reduced.
Effects of Engagement & Feedback
Multiple studies have shown a correlation between employee engagement and turnover. For example, Gallup has reported a 78% lower probability of turnover in highly engaged business units across companies, and that companies who implement regular employee feedback (a proven engagement strategy) have turnover rates that are 14.9% lower than for companies that give no feedback. Similarly, Deloitte in 2015 found “high-recognition companies” have 31% lower voluntary turnover than companies with poor recognition cultures.
Feedback can be a powerful tool for engagement and retention in more ways than one. Using data analytics software and timely instant feedback over annual performance reviews can help pinpoint weak spots in engagement and predict employees who might be preparing to leave. Dean Carter, during his tenure on HR at Sears, built a system for gathering data on morale from hourly workers. This system involved clicking an emoji expressing mood as the employee clocked out for the day.
However, Carter noted that it was people who didn’t pick an emoji at all that made the difference. “If a store showed a significant drop in employees picking an emoji, regardless of which one, we found that store had a big attrition problem 30 to 60 days later,” he recalls. “It was remarkably accurate.”
Ways to Lower Turnover
The Wall Street Journal’s top recommendations to reduce turnover are:
● Hire people who fit the company culture from the beginning
● Create a rewarding work environment through a culture of recognition and interaction
● On the point of recognition, get creative with perks and rewards for employees doing well
● Provide channels for consistent employee feedback, and pay close attention to needs
like clearer goals and flexible work arrangements
But keeping on top of all of these tasks can be difficult for organizations, particularly regarding feedback, arguably the most important component to avoiding turnover.
While there are a number of software platforms focused around employee surveys, this only covers one aspect of the turnover problem. Companies need automated platforms which can serve a number of employee needs, from accessible and measurable feedback, to automated rewards and recognition, to unique methods of engagement, like wellness programs, giving and volunteer opportunities, and shareable content.
With time, investments, and the right automated solutions, companies can keep employees engaged and productive longer, reducing costs and supporting a positive work environment.