Retention is key to business success — because your employees are your most important asset. A high turnover is expensive; the average American employer spends about $4,000 and 24 days to hire a new employee. Moreover, replacing an employee could cost a company up to 50% to 60% of its annual salary.
Not to mention, a high turnover and many disgruntled employees can make a dent in your employer branding. And scathing reviews on employer review sites make it all too easy to make your company unattractive to new talent.
So if you’re facing a high turnover rate, what’s your move as an employer?
Recognizing High Employee Turnover
The first step to stabilizing turnover and retention is to determine the turnover rate. A healthy turnover rate is less than 10% per year, but this still depends on the industry of the business. For instance, average turnover rates are higher in the technology and software sector (13.2%) compared to the U.S. government sector (around 1.0%). Other industries with high turnover rates are:
- Retail and Consumer Products (13%)
- Media and Entertainment (11.4%)
- Professional Services (11.4%)
If your company recorded a turnover rate higher than 10%, then you might be in the midst of an expensive crisis.
Companies may attribute their turnover rate to several factors. A 2020 report revealed the major causes of employee resignation:
Lack of Care from Employer
The report claims that these frustrations could be summed up in one statement: employees feel that their employers don’t care about them as individuals. Only 31% or about one in three employees strongly agree that their company genuinely looks out for their interests.
This perceived lack of empathy pushes them to leave their posts—as many as one in three workers left because they didn’t feel cared for.
In fact, the report found that 44% of burned-out employees often resent their employers. In many workplaces, a worker’s frustration is not an isolated event; about 38% of workers encountered a colleague who encouraged them to leave a job with them. If a worker is burned out, they are twice as likely to convince their peer to leave, too.
Lack of Compassionate Treatment and Support for Well-Being
The kind of treatment and support that employees receive also influence their decision to stay. According to the report, one in four workers left a job because they felt that they weren’t treated with dignity by the company leaders.
Meanwhile, one in five left because they felt that their employer didn’t support their well-being.
What Your Company Can Do
If you believe that your company is in the midst of a turnover crisis, here are some steps you can take.
Commit to Employee Care
Because the lack of care is the most commonly cited cause of turnover, it’s in companies’ best interest to be committed to employee care. Apart from physical measures, such as keeping the workplace clean, maintaining proper indoor humidity, or providing competitive benefits and compensation, businesses may review their efforts on burnout, inclusion, and mental health.
Don’t Rely on Exit Interviews
Exit interviews provide a rich insight into the cause of turnover, but it doesn’t reveal the big picture. Moreover, exit interviews often happen too late in the employee lifecycle.
Instead, conduct stay interviews to gain insight into the current state of your employees. These temperature checks help employers understand what makes employees stay and what will make them leave. It also reveals problems that the employer can solve before several other workers turn in their resignations.
Burnout is a bane to productivity. Not only does it hamper workplace performance, but it also affects the employee’s personal life. About 52% of employees who consider themselves burned out say they have trouble sleeping at night. Additionally, about 34% are no longer interested in socializing, while 26% drink more alcohol than usual.
However, only 25% of employees said their employers discussed or acknowledged burnout with their employees.
If employees cite burnout as the cause of their resignation, the company may identify problem areas, intervene at different levels, and constantly work to solve burnout.
Roll Out Policies for Mental Well-Being
If the interviews and surveys show reports of mental health issues among employees, the company should establish a fair policy for handling these concerns. This gives the workers a safe, respectful, and non-judgmental space to voice out their concerns.
There are several solutions to the turnover problem, and it’s best explored on different levels. After all, the most productive are those that are committed to employee well-being.