The Great Resignation spurred by the Covid-19 pandemic has left many companies at a challenging edge of retaining employees. Solely in the U.S., the number of people quitting their jobs has reached 47 million during the past year.
People are a key asset that enforces business growth. While employee turnover prevents companies from growing in their industry or new markets. Besides, losing talent leads to increased costs of recruitment. So, companies have to invent new approaches to building long-lasting relationships with employees.
We’ve prepared a few handy tips on how to increase retention for you to improve your strategies for managing human resources.
Table of Contents
- 1 What Is Employee Turnover?
- 2 Reasons For Employee Turnover: Why Do Talents Quit?
- 3 Top 5 Solutions to Fight With Staff Turnover
- 4 Wrapping Up
What Is Employee Turnover?
Employee turnover rate (or staff turnover) measures the percentage of people leaving their jobs at an established period of time. There are four types of employee turnover that are included in rate calculation: voluntary, involuntary, retirement, and internal transfer.
The rate is calculated annually. According to the Bureau of Labor Statistics, an average annual staff turnover comprises 12% to 15%. However, some companies reach a higher index. A survey held by the Center for Economic Development has shown that staff turnover rates in different industries can fluctuate from 19 to 34 per cent.
To calculate an employee turnover rate within your company, you should define the average number of employees and the number of employees that left your company.
The average number of employees is a mean value between active employees at the beginning of the year (AEB) and the end (AEE).
The formula is: Average = AEB + AEE / 2
The employee turnover rate formula is: Staff Turnover % = attrited employees/average * 100
Reasons For Employee Turnover: Why Do Talents Quit?
Disruptive socio-economic events of the previous three years forced many people to reconsider their workplace and try finding better options in the labor market. The data suggests the Great Resignation will continue.
JobList, in their 2022 Trends United States Job Market Report, shared that 3 out of 4 full-time employees consider quitting their jobs within the next year. The report also revealed that 79% of respondents are leaving for better monetary compensation.
Another survey found out that employees quit because:
- 63% of employees – low pay,
- 63% of employees – no career growth opportunities,
- 57% of employees – lack appreciation,
- 45% of employees – poor work-life balance.
Top 5 Solutions to Fight With Staff Turnover
Based on data from research we can assume that making work a better place can help companies win talent and increase retention rates. Let’s see what retention strategies work and why.
- Provide Upskilling and Reskilling Opportunities
- Reward and Recognize Employees
- Consider Switching to Hybrid Work Model
- Develop Strong Company Culture
- Improve Recruitment Process
Provide Upskilling and Reskilling Opportunities
94 % of employees would stay at the company if there are more opportunities for reskilling or upskilling, says the LinkedIn report.
Learning at work helps employees pursue their careers, learn something new, and switch jobs within a company. In all, they stay longer in a company where they can put their energy into learning. To provide learning and development opportunities at the workplace, you can:
- cover up expenses on courses and training,
- develop a knowledge base accessible for each employee,
- set up a learning management system,
- create professional development plans for each employee.
Apart from being an attractive perk for employees, learning at work will be a necessity for companies. A McKinsey survey showed that 43% of companies experience a skill gap within organizations. So, by providing learning opportunities you can accomplish two goals at a time.
Reward and Recognize Employees
Appreciating your workers is a key to building long-lasting professional relationships. When you acknowledge employees’ achievements, they feel needed. Besides, recognizing employees’ efforts improves productivity within the organization. Great Place To Work reports that employees who feel recognized 2.2x are likely to be satisfied with their workplace.
There are plenty of ways to express your gratitude to your employees:
- Implement perks for specific achievements.
- Celebrate small wins.
- Give spontaneous feedback.
- Encourage managers to reward employees.
- Share employee results across departments.
- Implement digital tools to acknowledge employees.
Work on the culture of recognition within your company, and you’ll see how the employee turnover rate will decrease.
Consider Switching to Hybrid Work Model
After the Covid-19 pandemic, many organizations embraced remote work. Although some found it convenient, 50% of organizations still need workers to come to the office 5 days a week. However, employees have less motivation to do that, because with the flexibility of remote work comes more work-life balance. Statistics say that 72% of employees would prefer hybrid work.
To bring a hybrid model to life in your organization, you should reorganize the company’s processes to make them more flexible and embrace technology for communication, collaboration, and performance tracking.
Develop Strong Company Culture
Over 75% of employees won’t join a company with a bad reputation.
A company’s culture implies establishing behaviors and values that recognize and support most employees. The modern workforce carefully analyzes a company’s culture before accepting a job offer. Positive culture at work is also a reason for employees to stay in a company. Here are some ideas on how to improve the company’s culture:
- Communicate to your employees your beliefs and goals to give them motivation.
- Recognize and reward employees so they feel appreciated.
- Develop communication strategies within the company.
- Work on your social media presence.
- Provide competitive perks.
- Improve workplace: modern computers, ergonomic furniture, game room or gym, etc.
Improve Recruitment Process
An average time to hire nowadays is about 36 days, says SHRM. Not only is the recruitment process long, but it also costs money for the company. Besides, smooth and quicker recruitment is more likely to increase retention.
If you need to improve the hiring process, we suggest automating the recruitment and onboarding processes. Automation can reduce repetitive tasks of talent sources such as ad posting, automatic replies, CV screening, interview scheduling, and more. Consider switching to video interviews to reduce the time to hire.
Employee turnover doesn’t have to be a burden for your organization. You can work on your employees’ satisfaction at the workplace and improve employee retention. Just follow our tips on reducing staff turnover, and you’ll achieve your goals.