Voluntary turnover carries a high cost: job advertisement, interviewing, background checks, onboarding, loss of productivity, new employee errors, and other costs add up quickly. With the estimated cost of replacing an employee ranging from 16% of annual salary for low-wage employees, to 213% of annual salary for executive level employees, increasing workforce retention is at the top of many companies’ to-do lists.
To reduce turnover, start by learning about why people voluntarily leave:
They leave their manager. A bad employee-manager relationship is routinely reported to be the number one reason employees leave a job.
They leave because they feel stagnant. Employees report leaving jobs to find a position that is more challenging, or that inspires more passion. They want jobs that fully utilize their current skills and encourage them to learn new ones.
They leave because of toxic culture. Employees look for opportunities to work where the culture matches their values and empowers them to own and execute job responsibilities.
What can you do to address these top reasons to leave?
Ask your employees. Exit interviews expose the factors that are driving your employees to leave, but only serve as diagnosis, not prevention. Be proactive and conduct ‘Stay interviews,’ to understand what your employees value and what aspects of their work and the organization keep them on board.
Act employee feedback. Retention boosters that often prove successful include: clearly communicated opportunities for career advancement; increasing company philanthropy; fair and frequent feedback and performance recognition; support for employee professional development; and successful company leadership.
Address problematic management. Half of all voluntary turnover and 70% of the variance in employee engagement scores is attributed to the quality of employee-manager relationships. Transform management into a retention booster by taking the following steps:
Assess management strengths and weaknesses. Assessments, including those that look at personality, emotional intelligence, and leadership styles can provide information about an individual’s approach to management.
Train effective management. Utilize the information about a manager’s strengths and weaknesses to provide targeted training programs that increase effective behaviors in management such as: providing useful and timely feedback, recognizing and responding to a direct report’s emotions, and making informed decisions.
Support effective management. Ensure that the overall company culture supports and rewards the effective management behaviors you have trained. Establish clear guidelines for the behaviors you want managers to engage in, the training that will be provided to help them learn the behaviors, and the new criteria you will use to evaluate manager performance.
Hire effective management. Use selection techniques that can predict management potential and culture fit. Assessments serve as a valuable tool to increase the accuracy of hiring decisions traditionally based on interviews and reference checks.
Huntbridge offers a variety of talent management and talent acquisition services to assist you in reducing employee turnover. Contact us to learn how we can work with you to provide solutions for increasing retention.