Employee turnover is a growing problem that needs to be addressed. The rate continues to increase in Wisconsin. At the start of 2020, the Milwaukee BizTimes reported that “managerial and professional employees have also seen a steady increase in turnover for the last five years, from 12% in 2015 to 16.5% last year.” The article also reported that “46.6%, of executive departures were by high-performing or high-potential employees”.
These are alarming numbers for businesses. Employee turnover is not only a headache, but it’s also expensive. While there are a lot of numbers contributing to the exact expense involved in employee turnover, an article on People Keep found “Some studies (such as SHRM) predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average.”
Some of the costs involved include:
- Cost of finding new candidates (advertising, screenings, hours spent in interviews)
- Lost productivity while finding the right hire
- Onboarding and training
- Potential lost business relationships if customers leave during the transition
HR professionals have their work cut out for them. And, in a position that’s constantly growing in responsibilities, it’s a tall order to fill.
Why is employee turnover increasing?
There are a lot of factors that can impact if an employee stays at a company. While some of these things are outside of the company’s control, such as employees moving or family situations, there are many things that are directly related to the organization. Some reasons employees jump ship is:
- Poor company culture
- Lack of leadership within the organization
- Pursuing a higher paying job
- Interested in a different role or position
- Lacking fulfillment in the work
Then, there’s the changing dynamic of the workforce. I grew up in Michigan not far from Detroit. Many people in the area, including my dad and grandfather, worked for the auto industry. Back in their day of finding jobs, things looked different. Companies were loyal to employees and so employees were loyal to their employers. The goal was to get hired by one of the Big Three and then work there until you retired. The auto companies had impressive salaries, benefits, and retirement options. That was the end of the story.
It doesn’t work like that anymore. The younger generations witnessed what happened to many of their parents as the economy took a hit back in the Great Recession. They figured out that employers were no longer loyal to their employees the same way they used to be. So, they have a different mindset when it comes to working. They don’t mind changing jobs and pursuing new opportunities.
They’re looking for a different kind of benefit. Training and development are important to them. Freedom in the way they work is important to them. Flexibility matters. And, while salary obviously still plays an important role, money isn’t as motivating to these younger generations. They’d rather have the perks.
So, how do you improve employee retention rates?
If employees have changed and the workforce has changed, your organization has to change too. Here are some things that you can do to start addressing your employee turnover rate:
Get feedback from your employees
You can look up all the information you want online, but it’s not going to provide you with the exact information that you need. Instead, you need to talk to your staff. Give them a survey they can do anonymously. Find out where your company currently stands. Are your employees happy? Do they feel fulfilled by their work? What do they think is missing? How do they feel about the culture of the company?
If you skip this first step, you have no way of knowing where to start and what changes to make. Knowing where you are starting from also helps you track your progress to improvement.
And, if you aren’t already conducting exit interviews as employees leave, get started. You need to know why they are leaving and if there are areas you need to address. People usually aren’t afraid of being brutally honest about things when they’re already out the door.
Put the right people in the right places
Sometimes you have misplaced talent in your organization—the right person in the wrong place. If you notice that you have a talented employee that’s underperforming in their role, they might be in the wrong role. If you want to improve your retention rates, you need to understand that some people are going to want to move into different positions in a different department instead of just moving straight up the corporate ladder. Remember, the workforce has changed.
Provide employees a chance to learn about the roles in other departments and to explore any interests that they have.
Show employees why their work matters
When it comes to goal setting, many organizations fall flat. Most companies have overall goals for growth, but they don’t incorporate the “lower tier” employees in the process. They keep goals for management and the other employees are expected to just come in and do their job.
The problem with this is people want to feel like the work they’re doing matters. And, if they don’t understand how their role contributes to the growth of the company, it might feel like they’re wasting their time. Instead of feeling like they are playing an important role in the success of a company, they feel like they’re doing the same mind-numbing tasks day in and day out.
When you share the company goals with every employee and then have managers set departmental goals that align with those big goals, the work each employee is doing begins to matter more. They feel the difference.
Addresses issues when they arise
Not all employees leave their jobs by choice. If you have an underperforming employee, you need to be on top of it from the start. Why are they struggling? Is it that they aren’t making an effort? Or, is there something that can be adjusted to help them succeed?
If you don’t catch a problem when it first starts, the problem grows. You need managers to be actively watching for these problems to arise and addressing them when they do. If you wait until the annual reviews come around you may lose the employee before there is a chance to investigate the problem.
Invest in your employees
Talent development is important to continue improving your employees for the positions within your organization. But, that’s not the only way you should invest in your employees. Remember that your employees are people. They aren’t just numbers or roles within your company helping to achieve the goals.
For example, your investment in leadership development training or coaching for your employees don’t just help them at work. It helps them build confidence in all areas of their life. Happier people = happier workers.
Simple gratitude can go a long way with your employees—if it’s authentic. Yes, employees are doing their jobs to earn a paycheck, but they could be working for someone else. You want your employees to feel like you appreciate them and the work they do for you.
Take the time out to say “thank you”. It only takes a second to say. Or, you could write appreciative emails, or even better, handwritten thank you notes. Let your employees know that you notice them and the work they’re doing.
How SPEARity can help
SPEARity was created to help others achieve greater success. We accomplish this through a combination of coaching, consulting and training. SPEARity business coaches working with Milwaukee businesses have assessments that show your business where you currently stand so you know what direction to head in.
Our leadership development training is developed in a way to teach leaders to lead leaders. It’s not about just coaching one person. It’s about creating a long-lasting impact within an organization.
And, the SPEARity app helps connect your entire organization together. Each person is able to see how their daily tasks are impacting departmental goals that align with the overall company goals. Managers are able to see what their employees are accomplishing, which makes it easy to catch and address issues as they happen. And, the process of tracking daily successes helps build confidence across the board.
If you’re interested in seeing how SPEARity can help you reduce your employee turnover while developing leaders and achieving a greater success across the board, contact us today to explore your options.