The phrase “staff turnover” may wash over you, but you may be surprised to learn that it is often the reason for the success of major corporations around the world. There is significant value in keeping your staff turnover low but for many businesses, it can be a complex problem they never seem to have a handle off. Employee turnover is no longer an HR issue, while it may be a direct responsibility of the department, all management levels need to pay attention to their retention rate.
Increasing the retention rate in your business can lead to several other beneficial effects. Not many businesses can achieve a favourable retention rate without putting in the work. For some, it may be a new concept and for others a burgeoning problem. Either way, it’s important, because long gone are the days where employees were merely looked at as quickly replaceable resources.
They play a vital role in your productivity, long-term growth and ultimately profitability. They are quickly becoming the competitive edge most businesses need to separate themselves from other industry runners. They are more than just “another cog in the machine”, they are your internal stakeholders and they should be prioritized.
Some businesses choose to ignore or dismiss their staff turnover rate, simply because they do not understand how it impacts their operations. With this article, we hope to clear up any misconceptions around retention rates and provide a guide on how to improve yours.
These three reasons as to why your business can benefit from a low staff turnover may help you with your future endeavours.
Optimized Continuity
If you have a high turnover, chances are your productivity is quite low. That’s because every time an employee leaves, you may need to fill the vacancy with an under-qualified staff member or look elsewhere. This can result in operation delays and subsequently a loss in production which overall impact your profits. Optimizing your business to continue its importance to achieving your financial and business goals, reducing your turnover will help you do that.
Lower Recruitment Costs
Instead of searching for applicants from the outside, businesses who promote from within can reduce their recruitment costs. In turn, employees who see actual career paths mapped out for them and are motivated by promotions will want to stay with your business.
Higher Morale
Employees who notice high rates of turnover themselves will start questioning their own commitment to your business. If organizations do not address poor retention rates, employees may doubt their position in the long-term vision of the company. Not only will this impact job satisfaction, but morale will also be low because of those who feel they have no purpose other than filling a spot on the production line. But if employee turnover is lowered, it means that concerns are being addressed and that in turn increases morale. Thus improving employees happiness and productivity.
Now that you understand the importance of keeping your retention rate high, we can explore how to do just that. Here are some ways we at Real Business have identified that can help to reduce your staff turnover.
Emphasize Inclusion
Employees who are indifferent to an organization’s goals are often the symptom of being excluded from the vision of a business. Inclusion is important and vital to the buy-in of your employees. When we feel valued enough to be part of the vision, we want to see goals being achieved. We want to be a part of the bigger picture so to say. Do this by changing your workplace culture and ethos. Review how you interact and communicate, allow for feedback and open dialogue.
Think About Engagement Levels
Employees that do not engage with the business aside from work, may not understand or believe in your vision. If engagement levels are low you are likely to find that retention rates are poor. Allow employees to voice their concerns and ask about their disinterest in the business and brand. If they don’t believe in you, they don’t see how they fit into your business or why it even matters.
Pay Fairly
Employees are often disgruntled with their compensation and non-monetary benefits the most. If your business does not pay employees fairly and in market relation, they have no incentive to work for you. They are likely to find another job with your competitor who sees the importance of paying employees at current market rates. Similarly, if there are no perks of being an employee of yours, there’s really no reason to stay. Perks and other non-monetary benefits make a huge impact in persuading employees to stay and grow with you.
Work Ethic Is Important
Unfortunately, there will be employees who just are not willing to buy-in to your vision. To them, whether your business does well or not, means nothing. They simply see you as just a job that can easily be replaced. Fixing this narrative starts in the hiring process itself. Interviewing potential employees about how they themselves would like to develop their careers can give you insight into the individual’s work ethic and commitment to your business.
Incentivize Employees
Those who feel undervalued even when they increase productivity or improve your operations will be more likely to look for work outside. This will negatively affect your retention rate. When employees outperform, acknowledge this. When employees meet or excel their job goals and staff appraisals, reward them. Recognition and reward increase employee job satisfaction and morale.
There are several ways to manage your staff turnover rate but it all begins with understanding it’s important to your business. Long-standing corporations pride themselves on impressive rates because they have mastered their staff turnover. It isn’t just about keeping rates low and incentivizing your employees. When staff are treated fairly and well, they reciprocate this with better performance because they truly believe in the business and their role in it. Buy-in is critical to the success of a positive retention rate but so is an encouraging management team, inclusivity and motivating workplace.
