Editor’s Note: This is a guest post by Gemma Reeves from Find My Workspace. Her opinions are her own.
Put simply, employee attrition is the reduction of staff by voluntary or involuntary reasons. These can be through natural means like retirement, or it can be through resignation, termination of contract, or when a company decides to make a position redundant.
There are different turnover rates across industries, with hospitality and retail having higher rates compared to other industries. But a high turnover rate can be costly. When you think about your investment in recruiting and training employees and only having them stay on for a short period of time, you are not getting back a return on your investment.
Tangible costs also include the termination process as well as the cost of a potential temp or contractor. There are also intangible costs like the decline in productivity due to the change in office dynamics and the loss of institutional knowledge. There is also the stress that the rest of the employees may experience when their workload increases due to the vacant position.
The attrition rate can be calculated by dividing the number of employees you have in a month, including those that are on leave, but not those that are hired through agencies and contractors, with the number of people who left in a month then multiplying it by 100.
Employee turnover is never good for business. If you are at a loss on how to stop your employees from leaving, here are a few tips:
1. Communicate your vision
While you may be able to articulate the purpose or vision of your business, your employees might not have a clear idea on what your business stands for and in which direction it is going. When your staff is in the loop of what’s driving the business, they will share in the same vision that you have. It earns their dedication and commitment.
2. Optimize recruitment
You can optimize your recruitment process by starting with clear and specific requirements. Set goals for hiring for a position and clearly list the tasks and responsibilities, and what value the position will bring to your business. An objective and focused candidate profile should also outline what knowledge and previous work experience a candidate is expected to have. Make it relevant to the job requirement.
You can also ask the candidates to fill in an employment application where they need to sign and state that the information they are providing is true. This can be helpful if there are any omissions made on the resume. Ask for work related references, not personal ones and verify the information provided like the employment history, education backgrounds and certifications. You can also do background checks if the job might require handling of sensitive information and financial transactions and records.
3. Make the interview matter
The interview questions should be based on past and present work performance and behaviours. Allow the candidate to demonstrate their skill levels, motivations and competencies in their fields of experience. Ask for more information regarding their previous work experiences. When you need to interview more than one candidate, it is best to prepare a list of core questions in order to be able to evaluate them fairly.
4. Improve work conditions
What you offer as work benefits is a big deal for your employees. Top companies that are known for their perks for their employees have strong development programs, outstanding benefits not only for employees but also to their families, and fun work cultures. When a business knows to meet the needs of their employees beyond the office, they benefit more from their employees. While you may not be able to compete with what Google, Facebook and all the other big guys have to offer, you can improve work conditions by offering flexible work schedules that help promote a work-life balance.
5. Create a pleasant workspace
Another way would be to invest in a workspace that employees would want to go to. Employees spend almost half a day inside their workplaces. Any person would want that place to be where they are most productive, happy, healthy, and engaged. A person’s well-being affects his productivity and work performance, so it is common sense to provide for such. According to studies like Gensler’s Workplace Index, there should be spaces for collaboration, for learning, for socialization, and for more focused work or activities. When your workspace is a place that allows your staff to be able to work productively, they would love coming to work and love the work that they do.
6. Benefits and perks
The most common reason employees leave is because of the their salary. No matter how loyal and how driven they are with the company’s vision, if it cannot meet with their financial needs, they often look for new jobs. Your salary packages and increases should be prevalent with the current range of your competitors.
A great addition to any salary package are the benefits. You can add in paid time off, stock options, and even education assistance. To give your employees a better idea of what they are receiving from the company, you can include an annual statement of compensation they received, that will also include the added benefits they received like contributions to benefits premiums and retirement accounts, and others.
You can also give added perks like flexible schedules, remote work privileges, and assistance programs for your employees. Some companies even have daycare services for their staff’s children, transport pick-up to and from the office, service and travel discounts, and many others. Try to see which one would be beneficial for you and your employees.
7. Employee enagement
When you have talented employees, you need to find ways that you can help them expand their skill set. Give your feedback, let them know what you think. Pay attention, and let them know that you are there for them. If you don’t engage with them, they will get bored and complacent, and think that they are not growing within the organization.
A great boss knows how to challenge her people to accomplish tasks that may seem impossible. Be the boss that can push people out of their comfort zones and help them achieve their goals. If you want your people to remain in your company, treat them well. You may have the most talented people but you may not be allowing them to develop professionally.
It is impossible to completely prevent employee turnover. Sometimes, it is just outside your control. However, knowing why and how it happens, and meeting the challenge of overcoming attrition can help minimize its effect on your business.