Millennials and Gen-Z are famous for job hopping, and data shows these young workers are also taking advantage of the hot market. After all, why would anyone settle for less when they are offered better compensation in another industry? It might be a wise decision for individuals, but for companies, it’s a nightmare, and there is a need to prevent high turnover.
The loss of valuable employees is always unfavorable to business growth. It leads to a loss of productivity and costs the company financially as they must start the recruitment process again, create job ads, and conduct hundreds of interviews. In addition, organizations have to incur training and development costs after a few months for every newcomer.
As a business owner, you must reevaluate the business when employee turnover is high. Start by determining why employees are leaving your organization. Is the pay scale low? Do they find the culture toxic? Are they overworked? It will help identify problems you can rectify to retain employees. If you don’t know much about retention and turnover, have a look below.
Here we have listed six tips to retain employees and prevent high turnover.
1. Reward & Recognize Employees
One of the biggest reasons employees quit their job is because they feel unvalued and unappreciated. You can start by getting organizational psychologists on board and getting them to conduct research and get to the bottom of the reason behind the high turnover rates. Then, after they’ve presented you with enough data, you can start implementing changes.
Every company should create policies centered around recognizing and rewarding employees. That could include monetary as well as non-monetary rewards. For financial rewards, you can offer a bonus or a salary increment. However, you have plenty of options when it comes to non-monetary rewards. For example, you can give awards, send them on holiday, or provide dinner coupons.
These few things might seem like small gestures, but they can make a significant difference. If you don’t have reward and recognition programs already, start developing a few.
2. Prioritize Work-Life Balance
Often companies value and applaud their workers but fail to create a healthy balance between work and personal life. That means employees have to put in extra hours at work at the cost of their personal lives. Although they get compensated financially, it leads to burnout and exhaustion. Therefore, employers should focus on integrating work-life balance into the company’s culture. Perhaps, offer flexible scheduling. Allow employees to come at any time for a total of eight hours.
Likewise, you can offer them the to work from home. It will save commuting time while allowing them to work at ease. Above all, don’t promote toxic culture by expecting your staff to work when they are sick. You must give them some time off to reenergize and relax.
3. Offer competitive Salaries
Truthfully, salary and benefits are the primary reasons why people show up for work every day. It is also one of the top reasons people want to change jobs. So, it would be correct to say that higher pay and benefits can reduce turnover and increase retention. Therefore, companies can begin by offering an attractive salary package to attract qualified and talented candidates.
Most importantly, they should offer regular raises to meet market-competitive salaries. For that, offer what other companies pay for similar roles and provide a similar package. It will significantly decrease turnover as employees won’t be willing to switch to the same compensation package elsewhere.
Besides this, organizations must pay more for those with in-demand skills. Perhaps, offer a salary above market average if your accountant is well-versed in SQL. Correcting these pay imbalances can go a long way and prevent high turnover.
4. Offer Growth Opportunities
At times, employees feel they have become stagnant in their jobs, seeing no array of growth. The lack of growth and career development opportunities is also a reason for high turnover. The only way to overcome this problem is by recruiting employees internally. If there is an opening, hire someone internally instead of going into the market. It might involve cross-functional hiring that could be equally lucrative for the employees.
Besides this, offer personal growth opportunities to your employees. You can provide student loans, encouraging them to pursue higher education. It will expand their skill set, allowing you to benefit from upskilled staff. Similarly, offer training and development opportunities. For example, you can help them learn different programming languages and new software applications.
5. Standardize Performance Reviews
Another reason for high turnover is infrequent performance reviews. Most companies have a biannual or annual review period that involves assessing an Excel spreadsheet with static goals. Unfortunately, this no longer inspires or motivates the employees. Employees who feel unvalued or criticized after the reviews quit their job. To overcome this problem, cancel the conventional performance review setting.
Instead, make performance reviews a dynamic and continuous process that works on improving the employee-manager relationship. If that seems time-consuming, install a human resource management system. It can realign the entire goal-setting process, considering the manager and employee. That will allow business owners to reflect on their progress, encouraging them to reward high performance.
You only have to attach goals to actionable metrics and analyze them through performance management dashboards. It will enable the manager to update the goals in real-time while monitoring employee performance.
6. Involve Employees
Most entrepreneurs delegate tasks and instruct employees about their job roles. While this might seem the right approach, employees also want to feel heard. And not seeking your team’s input before making decisions can negatively impact your business. After all, the workplace starts to feel like a dictatorship where new ideas are not welcome. It often leads to employees moving to companies where their opinion matters.
Now is the time to switch to a democratic leadership style where everyone is a part of the decision-making process. You have to involve relevant stakeholders in every decision where it seems appropriate. It will help in striking a balance between authoritarian management and teamwork.
Final Thoughts
Employers who genuinely value their workers know the cost of high turnovers. Thus, they are willing to make changes at the organizational level that could lead to reduced turnovers and increased retention. You must create an employee-centric culture where they feel valued and appreciated. These few changes will increase employee happiness, and prevent high turnover.