Imagine you have built your dream home, just as you always wished it to be. You wanted to grow a few trees and some plants around your home. Some to make it look lovely, some to give shade to your home, and some to get the fruits for your survival. You searched around the world and managed to find the seeds and plants you wanted. You had to pay a lot of money for some, while for others you had to quarrel, fight and sacrifice. You place them all around the home where you think they would grow into power. You water them, nourish them with fertilizers and keeps them safe from weeds. And as they start growing like you wanted, one fine day you find them dying out for many reasons. Some get stolen, some die because of your ignorance.
Whatever the reason, it is painful to watch all your effort, time and money in vain. Isn’t this kind of the same pain that an employer feels when his employees leave the organization in scores?
If Customer churn is like a break-up, Employee turnovers would feel like a divorce. It leaves you broke and stranded in the street, riddled with self-doubt.
Though change is inevitable, high employee turnover is a change of element that has a direct impact on your bottom line. While some turnover can be expected, weak management can escalate normal turnover into a higher rate hitting the business where it hurts.
People join and leave companies, it is not surprising. Sometimes the reasons are inevitable and some largely unavoidable like retirement, relocation etc. But if you find that the employees are leaving because of dissatisfaction or you are finding a higher number of underperforming staff that you need to fire. Then you have a problem and it needs to be addressed immediately and systematically.
The Deloitte Human Capital Trends Report reveals that 78% of business leaders rate employee engagement and retention as one of their Fears. With this new growth in economy and job opportunities opening up, the ever-present fear that you’re going to lose your top talent to the company in the next corner also makes its appearance.
Let’s start with a proper definition of employee turnover. Turnover refers to the number or the percentage of workers who leave an organization and has to be replaced. Employee turnovers are costly and not just for the salary expenses. There are benefits to be paid, and the costs associated with onboarding and also recruiting. Organisations try their hardest to avoid turnovers as much as possible. High employee turnover rates are something that steals away your sleep and put a lot of stress in other employees too.
How do You Calculate Employee Turnover Rates?
There are two variables in the calculation that is the total number of employees and the number of employees who left. Divide the total number of employees with the number of employees who left and then multiply the answer with 100.
For example, you have 100 employees and 20 employees left. Your employee turnover rate is 20 %.
You might think since the employees are getting replaced, how high employee turnover rates hurt companies?
The average cost of a lost employee is estimated at 38 percent of the employee’s annual salary. Going with the average income in the US is 50000 dollars, it is almost 19000 dollars. And the worst part is when an employee leaves, the ripple effect impacts the entire organization and leads to more turnovers.
You cannot prevent your employees from leaving your company for the ubiquitous greener pastures but there are reasons that you are giving for them to leave. Let’s find that and eliminate it so that you can avert most of the turnovers. Let’s bring down that high employee turnover rates to its minimum avoiding these 9 practices.
1. Lack Of Efficient Training
Employee retention strategies should begin from Day one. Onboarding is a crucial process as it makes sure that the employees have the required skills, necessary knowledge, and acceptable behaviors needed to become an asset in the long run. An introduction to the mission and the values held up by the company helps the new arrivals to quickly adopt company-wide practices. When a company has implemented a coherent and consistent onboarding program, a 54 percent greater productivity and 50 percent greater retention is experienced.
Once the employees have been through the onboarding they may become disengaged due to lack of proper training opportunities. Employees today want to develop their skills and knowledge as much as possible. 40 percent of employees who receive poor job training has found to leave the company within the first year.
2. Immense Amount of Workload
Nearly 70% of employees stated that there aren’t enough hours to do their jobs. Having too much work is not motivating. Overworked employees would be the first to jump the ship to join companies that understand the balance between professional and personal life. If you are not sure whether your employees are okay with the workload given to them, you should directly ask them. Make sure that the work is distributed evenly to all the team members to ensure that someone is pulling extra weight. If a higher percentage of your employees indicates that they have been overworking, maybe its time for you to hire new employees before your current employees abandon you altogether.
3. Biased Treatment
Every company would have the best performers but it is not fair to treat them as your favorites. It is only a matter of time before your other employees get angry with you. You have to treat them all as equal. You cannot let one person have a very flexible schedule and then ask everybody else to come on time.
You should consider offering additional perks such as flexible schedules or remote work privileges to all your employees.
4. Money, Money, Money!
This one is a bit obvious. Almost 25% of employees in a survey said they would leave their jobs for a 10% raise somewhere else. No matter how much someone loves your company or believe in you if they are offered a better salary they are likely to consider leaving.
Always keep tabs on what is being offered by your competition for the employees so that you can offer comparable benefits packages. I would also advise you to conduct an annual wage and salary survey to get you some insights into your employees’ outlook on the package offered.
To help your employee understand the aids and rewards you are providing, make sure they get an annual statement of total compensation tabulating all of their wages plus any other benefit you provide, such as contributions to benefits premium, retirement accounts and Paid time offs.
5. Poor Management
A bad manager can make any employee feel miserable. It wouldn’t matter even if your employees are completely committed to work, if their supervisor creates an uncomfortable work environment for them, they may consider leaving.
This is another important reason for the high employee turnover, that gets ignored. Employees often leave a job voluntarily due to the awkward relationship they have with their immediate supervisors. As human beings, we do crave routine and consistency. Generally, if the work relationships and environments are positive and very motivating, employees will accept average wages and mundane or sometimes even highly stressful work to an extent. It is that relationship element that makes them stick with the company and it is the absence of such relationships that encourage them to have a wandering eye. Nobody is going to be excited about having to come to a place you hate and be with people who make you feel uncomfortable. This could lead to high employee turnovers.
If you suspect something like that happening in your office, make sure that the managers are given proper training and opportunities specially designed for them to resolve the issue before it gets out of hand.
Watch out that you’re not protecting bad managers by giving them second chances. Make it mandatory for them also to go through the evaluation process just like your other employees. You should also make sure that communication is possible between the employees and you to hand over their feedback about the managers to you.
6. Not So Friendly Co-workers
Just like the relationship with managers another thing which can affect the relationship with the company, is the rap-on with the co-workers. A congenial working community can boost positivity about the company. When an employee leaves the company, the coworkers with whom the employee sits, interacts discussing their doubts and uncertainties and serves on different teams are crucial components of an employee’s work environment. And defines the meaning of the company.
A research conducted by the Gallup organization indicates that one of the 12 factors that show whether an employee is happy on their job depends on whether they have a best friend at work. The relationship to the company is severely affected when there are issues existing between them. The Human Resource Department of your company should bring in strategies to keep cement the bond between the employees and hence creating an effectively hidden employee retention.
7. Treated like a Ghost
If you are an employer who hesitates to give feedback, you might really be removing the hesitation for the employee to leave. Feedback is to ensure that your employees succeed and avoiding this could lead to the detriment of their success.
When an employee is struggling to find his path, your honest feedback could help them to effectively manage their workload and to focus the right things., will Do not leave your employee to flounder by Ignoring the opportunity for feedback, or providing unhelpful feedback. They might become disheartened and give up on you and the company altogether.
You should also collect feedback about the company and the work environment regularly from the employees. It would make them feel important and valued. Seeing the improvements and changes you have implemented considering their suggestions would boost their positivity and naturally feel emotionally connected to the company.
8. Poor Selection Process
I agree that finding the perfect employee that fills in all the boxes is difficult, but forcing a match with an employee that is clearly not fit the job description or the company culture and values will never enjoy a happy ending. You might be desperate to fill that position but choosing a poorly matched employee is going to be bad for you, your company, and the employee. The employee is going to feel out of the step all the time and the work is also going to lag and pile up because the employee is not qualified enough. It is going to either the employee voluntarily leaving or your firing.
9. Tired of Micromanaging
Are you a person who likes to make the decision for your employees? You might be overstepping there. If you micromanage your employees you are actually saying that “ you are incapable of doing it without me”. That’s never the right attitude to give if you want innovation and creativity to strive for your company. Giving them space to develop their skills and abilities would help your employees to grow and also deliver new ideas and suggestions for your company’s growth.
Over managed employees are likely to grow frustrated over you making their decisions and limiting their imagination. Instead, trust your employees to perform well and appreciate the innovations and efforts they give for the betterment of the company. Lack of appreciation is the second biggest reason for the employees to leave the organization.
By recognizing the reasons for high employee turnover, you will be able to shield your business from this. Employees who are well-compensated, engaged and properly managed with space enough for their creativity and skill to develop will likely be loyal, productive members of your company. If you pay attention to these factors you wouldn’t have to be conducting exit interviews and goodbye lunches every now and then. Be empathetic and try to understand what your employees are going through and do not treat them as just machines. Wish you luck and hope that your sleep comes back to you once again.