It’s no secret that the economy is doing well, and with unemployment rates at historic lows, professionals have the choice to stay at their current jobs or search for greener pastures. Inc.com reports more people are leaving their jobs than ever before, leaving companies scrambling to fill the positions they leave behind. But what’s the full business impact of this trend?
According to this study from Josh Bersin, founder of Bersin by Deloitte,
“Many studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5-2X annual salary.”
The financial impact includes everything from the cost to recruit and train a new employee, to the loss of productivity when an employee quits, to the disruption of business. High turnover also leads to a loss of engagement with your other workers, who can become frustrated and inefficient adjusting to a continually changing team.
Attracting good talent takes a lot of effort and resources. Shouldn’t you work at least that hard to protect your hiring investment? It’s critical to not only attract good talent but also retain the talent you attract. Here are four ways you can retain your talent and reduce costly turnover.
Offer & Encourage Training
If you ever doubted the importance of training to current and future employees consider these two statistics from Clear Company.
- 40% of employees who receive poor job training leave their positions within the first year.
- In 2016 68% of workers said training and development is the most important workplace policy.
The employees interviewed also cited lack of skills training and development as the main reasons they chose to voluntarily leave their positions.
You may think you don’t have this problem because you offer training courses and have paid good money to get the best learning software for the job. It’s not enough. You need to do more than just post the latest training session.
You need to encourage your workers to take the time to attend training. If employees feel overwhelmed in their work/duties, they may feel they can’t attend training sessions even when they need it.
Establish and foster a culture that supports lifelong learning.
When you encourage training you encourage the growth of your employees and help foster their success. An employee who is given the opportunity to grow and learn from within won’t feel like they need to leave your company to grow professionally. It’s a win-win for both parties – organizations gain more knowledgeable employees and employees are able to develop their skill sets.
Offer Financial Incentives
Salary is not the only deciding factor in taking or keeping a job (especially for millennials), but employees still want to feel like they’re being paid fairly for the value they add.
Forbes.com states, “Despite being the largest generation in the workforce today, average millennial salaries are disproportionately low compared to the national average—and are 20% lower than baby boomers’ salaries when they were the same age.”
Millennials have been found to be somewhat pessimistic about both the economy and their job prospects, which may have weakened their salary negotiation strategies. If they don’t have regular evaluations and opportunities to re-negotiate, this group of employees may feel taking a new job is the only way to increase their pay.
Take the time to review all your employees’ salaries to make sure that you are paying them a fair wage. Whether they are a young millennial who sold themselves short or a longtime employee whose pay has not caught up to their new tasks, the last thing you want is for them to feel they are undervalued. Schedule regular performance reviews to be able to identify when a salary change is warranted so that you and your employees are on the same page.
Offer Workplace Flexibility
In some situations, non-financial incentives can be just as motivating as financial incentives. Non-financial incentives can also add positively to your company’s culture and the overall workplace environment.
At the top of the list of what employees want is flexibility.
According to the Harvard Business Review, 96% of U.S. professionals say they need flexibility, but only 47% have it. The types of flexibility measured included unconventional hours, freedom to adapt, location variety, and location independence.
They found that employees without access to flexibility are twice as likely to report being dissatisfied at work, and half of the employees said they would leave their company if another company offered a more flexible alternative.
Workplace flexibility used to be considered novel, but more companies are adopting it and the demand is only rising.
Schedule Regular Check-Ins
Communication is the foundation of any successful relationship, and the employer-employee relationship is no exception. Many department heads say that they don’t have time for regular employee meetings, but when you consider the return, they don’t have the time not to.
A Metrix Global LLC study estimated that consistent employee coaching via regular 1:1 meeting produced a 529% ROI. When considering how weekly check-ins can also prevent/reduce the financial burden of turnover, the total ROI climbs to 788%!
However, to have a measurable impact, one-on-one meetings must incorporate goal setting, coaching, development planning strategies, and praise/recognition.
Too often managers opt out and save meetings for when there is a performance issue. The problem with this approach is that managers may not know if a worker is unsatisfied, bored, or unhappy until it’s too late and the employee is out the door.
Regular communication is vital to establishing trust with your employees, which allows them to feel comfortable being honest and forthcoming with their issues. Regular meetings don’t have to be drawn-out and taxing but can be as simple as a 10-minute meeting, a quick walk or a coffee break.
Whether you choose to adopt one or more of these methods, companies can no longer be passive in retaining their talent as the competition for great workers grows. You spent time, money, and resources finding the people that fit your business. Make sure you are active in protecting that investment.