Effective Strategies to Reduce Employee Turnover Rate

Employee turnover is inevitable; no company can achieve 0% employee turnover. After all, there comes a time when an employee feels that they have outgrown the growth opportunities provided by the company and wish to seek opportunities with bigger companies. 

Understanding employee turnover

The primary reasons for employee turnover could be divided into 2 categories: Voluntary, Involuntary. Voluntary employee turnover includes reasons where the employer decides to voluntarily leave the company. The reasons could be cordial between the company and employee, such as retirement, relocation, or family issues. Sometimes, reasons could be adversarial, like an interpersonal dispute with a different employee or manager blocking the mobility of the employee.

Involuntary employee turnover includes the reasons where an employee is enforced to leave the company. The reasons could mainly be adversarial, like improper culture fit, unsatisfactory performance, absenteeism, etc.

Most of the factors could be addressed by the company to reduce employee turnover. For instance, the interpersonal dispute could be settled upon, or employees involved in the dispute separated so that they do not work together.

How to reduce employee turnover?

The process to reduce the employee turnover rate starts much before you begin hiring the employee. Selecting the appropriate candidate that is a culture fit and perfect for the job role ensures that the candidate does not leave the company right away. Moreover, it also ensures that the presence of such an employee would not imbalance the existing team combination and force other employees to leave.
employee turnover
employee turnover
Therefore, the strategies to reduce employee turnover could be divided into 2 parts:

  • Pre-hire
  • Post-hire

Let us check out the points covered in each part and what it entails.

Pre-hire steps

The prehire steps are the strategies that you need to implement before hiring a new recruit. These strategies would reduce the probability of employee turnover rate during the 1st year after the employee is hired. For best results, you need to apply these strategies even before you start publishing advertising for the open job position.

  • Focus on company culture

Being a good company culture fit is the most crucial factor that determines employee retention. A negative internal company culture trend could lead to a spike in the employee turnover rate, which could be highly detrimental for any business.

If an employee does not fit into the company work environment, then they would not be happy. The employee would find it difficult to cope with other employees and would feel lonely. A highly talented candidate who does not match up to the culture and behaviour of the company would not stay for long.

Therefore, determine the culture of your company and assess whether the candidate has the behaviour and the skills to fit into the company culture. Assess whether they have the right understanding of the culture practised in your company.

  • Create a proper performance management system

If you do not possess a performance management system then that could cause serious implications to your efforts at reducing the turnover rate. A performance review system is necessary to review the performance of your employees and reward their performance by awarding them a hike in salary or a promotion.

A performance management system gives direction to your employees to move up the ladder within the organization. Without this, your employees will feel clueless and directionless, which would ultimately lead to more employee turnover. With an appropriate system, you could encourage innovative thinking and creativity among your employees, boosting their engagement levels with the company. This can increase your chances of retaining the employee for the long term.

  • Offer competitive benefits and pay

Create a proper foundation of base pay and benefits that is competitive as per the market and satisfies the needs of the best candidates. The idea should be to provide more flexibility to the candidates. Candidates may still agree to a low base salary if you provide work from home opportunities, loan assistance and flexible working hours. The option adaptability is what most candidates find truly valuable and is the best way to attract top candidates for the job positions.

  • Express your company culture in the job advertisement

When you craft job advertisements, write in such a manner that showcases the culture and values of your company. You need to focus on developing your brand, which conveys ample information about your company culture. This will help your prospective candidates possess a basic understanding of the culture and values before sending in their applications.

Be honest and transparent about what you mention in the job listing. The contradiction between the reality of the job and the job posting is the biggest factor in employee turnover. Therefore, plan your job postings very wisely.

Post-hire steps

After the candidate is hired, the employer needs to ensure that the assurances sketched out in the job description, job postings and during the interviews, are put into practice. Moreover, employers need to ensure that their internal work culture, business process and employees contribute to creating an effective and positive workplace.

  • Recognise and acknowledge good work

Recent studies have proved that employee recognition plays a huge role in employee retention. Almost 20% of employees say that poor recognition or lack of it is the reason for their job change. Whereas, almost 50% of employees say that they are willing to put extra effort into their work if their efforts are recognised by the company. Moreover, only 10% of employees say that their top managers actively recognise the key contributors.

Recognition does not always mean compensation or competition to get better feedback. Rather it is as easy as a manager recognizing the efforts of the employee in front of their colleagues and offering congratulations in front of the team. Sometimes, by being positive, encouraging and grateful for the efforts of the employees, you recognise their efforts and greatly reduce your employee turnover rate.

  • Offer benefits and flexibility

Adaptability and flexibility are crucial qualities that a company seeks in an employee. But even employees seek these qualities in a company. Employees are constantly evolving and growing. They are updating their skills and progressing professionally and personally through different stages in the journey of life. Therefore, employers too need to evolve and change their outlook to keep the employees in the company long term.

This means that employers need to continually provide better growth in benefits and salary as the employee progresses professionally. If you promote an employee but cannot give them a raise that fits their promotion, then the employee may want to look at other companies that offer better remuneration opportunities as per their knowledge and skills.

  • Focus on training

Learning and development are key to the growth of an individual. A progressive company provides adequate learning and development opportunities for its employees. Therefore, you need to focus on providing proper training to your employees to help them acquire new skills and grow further within the organization.

When employees are provided with training, they feel that the company is interested in their growth. This boosts the level of engagement with the company, which plays a significant role in retaining the employees and reducing the turnover rate.

Employee turnover is inevitable; no company can achieve 0% employee turnover. After all, there comes a time when an employee feels that they have outgrown the growth opportunities provided by the company and wish to seek opportunities with bigger companies.

But in the majority of cases, employee turnover could be averted. Proper planning and commitment can greatly help employers reduce the employee turnover rate in their organization.

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