Sometimes, losing an employee is unavoidable. There will always be people who leave the workforce, move away, decide to pursue a new career opportunity, or even go back to school. But if you keep hiring new employees only to have most of them leave within a year, you have a problem on your hands.
If you’re reading this article, we’re guessing your company is one of the many organizations out there struggling with the cost of a high employee turnover rate. Not only do you have to bear the expense of continually hiring new employees, but you also have to keep training new people who are initially less productive than they would be down the road if they stayed. So what can you do about it?
You need some new employee retention strategies. Read on to find out what problems may be causing excessive employee turnover at your company and how to fix them.
Problem: You’re Hiring the Wrong People
Let’s face it: Not everyone is compatible with every job or workplace.
For some jobs, companies can get by with hiring almost anyone who seems reasonably diligent. But there are many jobs out there that take a special kind of person to do well. If your company requires employees to use a very niche skill, work in a highly demanding environment, or spend a lot of time in stressful situations, you likely need a very selective hiring process.
So if you have a high employee turnover rate, it may be because your hiring process is not attracting the right people or filtering out candidates who are a bad fit for your company.
Employee Retention Strategy: Update your staffing process.
First off, you will need to take action to ensure your company attracts the type of candidates you need. Think about how your company normally attracts candidates and how you might improve on that process.
Do you post a listing on a job board? If so, you may want to consider hiring a local staffing agency or posting jobs on a more industry-specific site.
Do your job descriptions lack substantial information or fail to mention the benefits to candidates? If so, you may want to rewrite the description to emphasize what your company will do for its new employee, including opportunities for growth and positive aspects of your company culture.
You will also need to define each role clearly to both yourself and the candidates. They should understand what they will be expected to do and how much stress they will be under. While you might not need to put all of these details in the job description, you may want to bring them up during the interview so the candidates know what they are getting into, especially if past employees have struggled with certain tasks.
Here are a few questions to consider before you interview job candidates:
- What kinds of stressful situations might an employee encounter on a regular basis?
- How large is the workload, and did the previous employees struggle with it?
- How does the management team approach working with employees?
- What hours are expected, and what is the frequency of overtime?
From there, you can make a point of asking each candidate questions about how they would handle the daily stresses, workload, and management styles at your company.
By implementing these changes, you will be able to improve the quality of candidates you get and hire the right people for the job. That alone could substantially reduce your employee turnover cost.
Problem: Your Compensation is Lacking
It’s hard to keep turnover from happening if you don’t offer up-to-date wages and benefits. At the end of the day, employees have to pay their bills.
If you pay $14 per hour for a job when other companies are offering $24, don’t be surprised that you’re struggling to find and keep quality candidates.
Your company should be regularly updating its standard wages to keep up with inflation and industry trends. What’s more, your compensation strategy should recognize that employees grow more valuable over time.
Some companies may seem to get by with a few years of stagnating wages. But eventually, the lack of investment with catch up with you. You may yourself spending far more on finding new employees than you would have spent on the higher wages it required to keep old employees from leaving.
Employee Retention Strategy: Stay up to date with compensation trends in your industry and try to match, if not exceed them.
The best way to attract and keep quality talent is to pay employees what they’re worth. The highly capable workforce you’re looking for can be a little choosier than others about the wages they will accept, so you should always try to at least offer something competitive.
Spend some time getting up to date on compensation trends in your industry. You can look at job boards to see what wages your competitors are offering or work with a staffing agency to find out what they recommend paying for various roles. Keep in mind that some popular wage reporting sites include out-of-date information in their averages or take minimal action to ensure information is accurate.
If you can’t pay a higher wage, consider offering other benefits that employees find valuable. Maybe you can provide a better health insurance package, offer more vacation time, or provide more flexible scheduling than your competitors. Many of today’s employees consider work/life balance to be more important than compensation past a certain point.
Problem: Your Company Culture Might Need Work
Most employees will not stay if they don’t feel they are valued. While it’s easy to overlook camaraderie when there are urgent productivity goals, your employees will not be as productive (or likely to stay) if they do not feel they are appreciated as a member of the team. There may also be issues in areas like communication or workloads.
Common company culture problems include one-directional communication, over management, conflict, a failure to listen to employees’ needs, overly high expectations for employees, and a general lack of engagement. If most of your employees often seem unhappy or burnt out at work, it’s quite likely there is a problem in one of these areas.
In addition to these problems, some companies lack a solid plan for welcoming and rewarding employees. Recognition is one of the most important ways of ensuring everyone feels valued and should be an important part of your employee retention strategy.
Over time, a negative team environment can really get on an employee’s nerves. While few team leaders intend to create a negative environment, sometimes employees can feel disengaged or caught up in drama if their managers and coworkers do not consciously work to create a positive environment. Good company culture should not be taken for granted.
Employee Retention Strategy: Work on building a great company culture to keep employees there over the long term.
If you know which areas need improvement in your company culture, start brainstorming a solution. Otherwise, you may want to try using an anonymous suggestions box or asking about the company culture during exit interviews with former employees.
Often, one of the best ways to start improving your culture is to focus on your employee recognition system.
At some companies, employee recognition may be formal and standardized, such as using a recognition card or a mentioning standout employee performance during a specified time in meetings. At others, it may be as informal as telling team members when they did a great job on a project during meetings or over Slack.
Which option you choose is less important than ensuring there is some sort of frequently-utilized way of letting employees know they are appreciated.
Usually, company leadership is responsible for recognizing employees’ achievements and setting an example of creating a positive work environment. However, everyone contributes to the company culture. Be sure to discuss the kind of culture your organization wants to create with all employees, especially if you see something that could be improved.
Improve Your Employee Turnover Rate by Hiring Better Candidates
If you are an employer in Utah or Kansas City and believe your employee turnover rate could be improved with a better hiring process, reach out to LG Resources today. We have maintained a 96% client retention rate by implementing a comprehensive screening process that allows our partners to bring on higher-quality candidates.
By providing high-end staffing solutions for positions ranging from entry-level to professional, technical, and executive roles, LG gives you the freedom to move your company to the next level. Contact us today to let us exceed your expectations!