In 2022, the average employee turnover rate across all industries in the U.S. was 9.31%. Turnover was especially high in major cities, including San Francisco, Palo Alto, and Boston, and experts anticipate that turnover rates will continue rising throughout 2023, possibly increasing as much as 20%.
But whether turnover is voluntary or involuntary (such as layoffs), the impact is the same:Â low employee morale, reduced ROI, and a lower-quality product or service.Â
So, how can your company get ahead of these issues? Here are 11 strategies you can implement to reduce turnover as much as possible.
One of the smartest ways to avoid turnover and increase employee retention rates is to adopt this mindset from the very beginning. You need to ensure youâre hiring the right people â employees who will fit well with your organizationâs culture. By carefully considering candidates in the hiring process, youâre more likely to make good choices that will reduce potential turnover down the road.
You can determine the best employees for your company by clearly defining your culture and then communicating it during the hiring process. Use content (such as the job description, your website, and company social media accounts) to express core values and characteristics that would help someone fit in. You may even consider inviting a non-managerial coworker to sit on the interview panel to help assess a candidateâs cultural fit. Who better to evaluate cultural fit than someone immersed in it every day?
Employee turnover can be a costly and disruptive issue for any organization. Replacing employees often requires significant investments in recruiting, hiring, and training new team members. High turnover rates can also negatively impact workplace morale, productivity, and service quality.
As a manager or business leader, reducing avoidable turnover should be a top priority. Here are 7 proven tactics you can use to keep more of your top talent.
Hire the Right People From the Start
One of the best ways to prevent turnover is to improve your hiring practices. Take the time to clearly define the key qualities, skills and experience you need for each role. Refine your interview process to carefully assess candidates for culture fit and long-term potential, not just technical abilities. Check references thoroughly. Set realistic job expectations from day one.
Hiring the right people is always preferable to churning through a revolving door of poor fits. Invest the time upfront to find and attract suitable candidates who are likely to thrive and stick around in your organization. Rushing to fill seats is often a recipe for future turnover headaches.
Offer Competitive Compensation and Benefits
While compensation isn’t the only factor in retention, it does matter. Employees want to feel appropriately valued and rewarded for their work. Regularly benchmark your pay and benefits against industry norms in your geographic area. Track which companies you lose talent to, and identify the pay gap. While you may not always be able to match another offer dollar for dollar, understanding the market data will help inform your compensation strategy.
Don’t underestimate the value of benefits either. Things like health insurance, retirement plans, paid time off, flexible scheduling, and remote work options are all part of your total rewards package. Ensure your offerings align with employee wants and needs. Surveying staff and staying alert to new benefit trends can provide helpful insights.
Foster a Positive Company Culture
Compensation is the table stakes to attract and retain talent, but culture drives long-term attachment and loyalty Employees who feel aligned with the values, mission and purpose of your organization are much more likely to thrive and stick around for the long haul
Clarify your company’s cultural priorities and embed them into every stage of the employee lifecycle – from recruitment marketing to onboarding and training programs Celebrate wins, milestones and achievements Promote transparency, open communication and feedback cycles. Lead with empathy and compassion. When employees feel a strong sense of belonging and purpose, they become far less likely to jump ship.
Closely Manage Problem Employees
Most people are honest, hardworking team players. But a small number of disruptive, disengaged or toxic employees can wreak havoc on those around them – and drive away your best talent. Don’t allow difficult employees to fester and erode morale.
Document performance issues promptly and consistently. Provide clear feedback on areas needing improvement, ideally with a timeline and expectations. If problems persist without improvement, strong management is required, up to and including termination. While never easy, promptly addressing toxic situations helps sustain a healthy environment and prevents voluntary turnover contagion.
Recognize and Reward Outstanding Performance
Consistent, meaningful recognition is a vital retention strategy. Monetary rewards like bonuses or equity grants are powerful motivators. But even small acts like a handwritten thank you note or shout out at a team meeting can boost engagement.
Schedule regular 1-on-1s to check in on big-picture career goals and professional development needs. Get creative and customize rewards based on what makes each employee feel genuinely valued – from gift cards, to extra time off, to public praise on social media. A culture of recognition reminds your best talent why they want to stay.
Prioritize Flexibility and Work-Life Balance
In today’s competitive hiring environment, flexibility and work-life balance have become huge priorities for many professionals. Whenever possible, look for ways to support alternative schedules, remote work options, and family leave beyond the legal minimums.
While every role has requirements, showing flexibility around how and when work gets done demonstrates trust and care for your team as whole people with lives outside the office. Employees are far more loyal to organizations that make space for their needs.
Listen to Feedback and Concerns
Don’t wait for exit interviews to find out why employees quit. Create regular channels to solicit input and feedback before people get to that point. Pulse surveys, anonymous suggestion boxes, open office hours, and group Q&A’s can surface issues early while there’s still time address them.
Listen without defensiveness and acknowledge concerns. Share what changes will be made moving forward. Following up with action plans reassures employees they are heard. Being proactive with feedback fosters the trust and goodwill that inspires discretionary effort and tenure.
Invest in Professional Growth
Employees want to know their work is going somewhere. Support career development with mentoring programs, skills training, tuition reimbursement and stretch assignments. Outline clear paths for advancement, and help excite people about future possibilities.
A learning culture keeps team members engaged as they build new capabilities. Demonstrating investment in your people’s growth also builds loyalty and encourages them to stick around to see their future at your organization unfold.
In Closing
Reducing turnover requires effort across many facets of the employee experience. While not exhaustive, the 7 strategies above cover some of the most impactful ways to retain your top talent over time.
The costs of churn go far beyond just recruitment fees. High turnover damages workplace cohesion, service quality, knowledge retention, and your employer brand. By taking proactive steps to strengthen hiring, compensation, culture, performance management, rewards, flexibility, feedback and growth opportunities, you can build an environment where employees thrive and feel invested in the long run.
Some amount of turnover will always be inevitable as people relocate, retire, or find new challenges. But when you get retention fundamentals right, you can dramatically reduce avoidable churn, strengthen workforce stability, and reduce the costs and risks of having to constantly backfill roles. Your best team members are worth fighting for – so make employee retention a priority, and you’re likely to see the many benefits that come with keeping great talent for the long haul.
Part ways with team members when necessary
Yes, your goal is to reduce organizational turnover. But sometimes, letting someone go is necessary to benefit the rest of the team.
You may need to consider firing an employee if they have a negative effect on morale. A team member who hurts productivity, regularly goes against company guidelines, or doesnât change their behavior when asked can be a huge drain on employee morale.Â
Of course, youâll want to do everything you can to keep the employee on board before making this decision. Depending on your organizationâs protocols, this may include verbal discussions, performance improvement plans, or write-ups. However, if the issues donât resolve even after taking all these measures, itâs time to move in a different direction.Â
By letting this type of employee go, youâll indirectly improve turnover rates as your other employees feel more supported and comfortable in the workplace and more willing to stay.Â
Show your team members theyâre valued and appreciated
One of the biggest reasons people quit their jobs is because they donât feel appreciated. For 79% of employees, this is the single biggest reason they left a position. And when it comes to the Great Resignation that has been spreading across the U.S., 57% of employees cited feeling disrespected at work as a major reason for quitting.Â
If your employees donât feel like their hard work is recognized and valued, theyâll be more likely to leave. Who would want to stay at a place like that?Â
Prevent this problem by getting serious about employee appreciation. Choose from any of the following employee recognition ideas, or get creative and make up your own:
- Celebrate employee birthdays and anniversaries
- Publicly recognize people for a job well done
- Treat your team to happy hour, or cater lunch
- Provide extra holiday benefits
- Give awards to different departments or for different projects
- Promote peer recognitionÂ
- Share employee shout-outs on your companyâs social media and internal platform
- Reach out to people who are sick or on maternity/bereavement leave
- Choose an Employee of the Month
- Celebrate non-work-related achievements.
7 Strategies That Reduce Employee Turnover!
How do you reduce turnover?
Reducing turnover starts with hiring good people, but it doesn’t end there. These hiring and retention strategies will help you attract and keep top-performing talent.
How to reduce employee turnover & increase employee retention rates?
Here are 11 strategies you can implement to reduce turnover as much as possible. One of the smartest ways to avoid turnover and increase employee retention rates is to adopt this mindset from the very beginning. You need to ensure you’re hiring the right people – employees who will fit well with your organization’s culture.
Why is reducing employee turnover important?
As the tides of change continue to shape the business landscape, organizations that prioritize reducing employee turnover stand poised to navigate the currents with strength, resilience, and growth. How do you reduce staff turnover?
How do you reduce employee turnover in healthcare?
Healthcare is a high-stakes industry where employee turnover can impact patient care and operational efficiency. To reduce turnover, healthcare organizations can implement robust training programs, prioritize employee well-being, and offer opportunities for advancement within the medical field. How do you reduce employee turnover in manufacturing?
