In his acclaimed book, “Good to Great,” author Jim Collins described the importance of getting the right people on the “bus” and in the right seats. It is also important to keep them “on the bus” because employee turnover is costly and can be disruptive. Losing key people is a dilemma for all businesses but it can be especially debilitating for small businesses that have less margin for employee losses. Thus, it is critical to avoid and reduce high turnover.
The Benefits of a Stable Workforce
A stable workforce provides employees, stakeholders, and the public with a sense of confidence, optimism, and security in an organization. It creates steadiness in the organization which leads to improved productivity. It helps management to make better assumptions on how well the work will be performed, leading to better results, including higher sales and profits.
The Negative Effects of High Turnover
High turnover increases a company’s costs and reduces its profits because it costs money to recruit and train new employees. It can decrease an organization’s productivity, cause deterioration of product or service quality, reduce morale, result in lost sales, and contribute to even more employee turnover. Thus, it is critical to reduce high turnover.
The Causes of High Turnover
High turnover can be caused by a toxic workplace culture, the lack of opportunities for personal growth and development, lack of management recognition, being underpaid or not receiving adequate benefits, being overworked, or being under-stimulated. In every case, the efforts to reduce high turnover will have a positive impact on the organization.
12 Steps to Reduce High Turnover Rates
Follow these important steps to reduce high turnover rates:
- Start by finding and hiring the right people, employees that have both the right skills and the attitudes that will mesh well with the organizational culture. Also, find employees who want to stay and grow with your company. Make sure that the hiring process is well-developed to find the employees that you want.
- Encourage high retention rates from the beginning by creating a well-thought-out onboarding process.
- When you identify an employee who doesn’t fit or brings a toxic element to the organization, let him/her go as quickly as possible.
- Define and develop a strong and healthy company culture that focuses on employee happiness. That should include encouraging generosity and gratitude, cultivating and demonstrating respect, and being inclusive.
- Pay close attention to employee engagement including meeting employees’ social and emotional needs.
- Identify clear career paths.
- Develop solid continuing opportunities for employee development and personal growth including the possibility of role changes.
- Facilitate good work-life balance.
- Utilize effective performance reviews.
- Recognize and reward employees.
- Make sure that salaries and benefits are fair and competitive in the marketplace.
- Carefully analyze all turnover to identify and rectify any issues.
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