What do you do if your toaster doesn’t perform properly? You get a new one. And when your cell phone becomes outdated, you trade it in for an upgrade. But the one thing you DON’T want to say goodbye to is a good employee. Keeping low employee turnover rates can cut the cost of doing business. Keeping current employees can help your business reach new levels of success. It is costly to replace workers.
First, there is the cost of hiring (advertising, interviewing) and training the new employee.
Second, productivity slows until the new employee gets up to speed.
Third, your customers/clients feel more comfortable when they see familiar faces – if you have frequent turnover of employees, your business may suffer.
7 Ways to Reduce Employee Turnover
1. Start With Good People
The first step in this process is to hire the right people. Someone who is overqualified for the job is probably going to be looking to move “up, up and away” pretty quickly. Someone who is not up to par may feel like a duck out of water, fall behind, and then leave due to frustration, if he isn’t fired first. And once you’ve hired them, you need to make sure you are paying attention to developing their capabilities. This is a really important step in keeping the employee turnover rate low.
Start with good people, lay out the rules, communicate with your employees, motivate them and reward them. If you do all these things effectively, you can’t miss.” – Lee Iacocca, former president of Ford Motor Company and former chairman of Chrysler
2. Lay Out The Rules
The next step is to educate your employee as to the requirements of the job. You’d be surprised how many employers assume their workers know what they need to do and how they need to do it. Don’t assume anything! Make sure everyone is on board with the dress code, email etiquette, and what is expected of them as far as work habits and production levels. Be upfront, be honest and be fair. Your employees will reward you with their best effort and long-term loyalty.
Even your most talented employees have room for growth in some area, and you’re doing your employee a disservice if the sum of your review is: ‘You’re great!’ No matter how talented the employee, think of ways he could grow towards the position he might want to hold two, five, or ten years down the line.” – Kathryn Minshew, founder and CEO of The Muse
3. Communicate With Your Employees
You don’t lie to your own doctor. You don’t lie to your own attorney, and you don’t lie to your employees.” – Gordon Bethune, former CEO of Continental Airlines
Keeping an open door policy is important – but don’t forget to schedule regular meetings as well. A friend of mine used to complain that her boss had a 10-minute chat every day when the evening shift came on. She thought it was a waste of time, since there wasn’t always something of great importance mentioned. But in reality, that employer was doing the right thing – creating an opportunity to communicate with his employees on a daily basis. Dr. Bob Nelson, best-selling author and motivational speaker, says, “Just the act of listening means more than you can imagine to most employees.”
4. Make People Better
Don’t be afraid to tell your employees what is expected of them. Employees who feel they are doing what is expected of them will stick around, the epitome of low employee turnover rates. The celebrity chef and restaurateur, Emeril Lagasse, said, “I believe in giving my employees a lot of room to be creative and to express themselves.” When people are pushed, or given the freedom to, they will become better.
Steve Jobs had something like a 90% approval rating from his employees. You hear stories about him being this short-tempered, aggressive person, which he was. But he was in the pursuit of making people around him better, so the product they created would be better.” – Ashton Kutcher, Actor, producer, and investor
5. Give Them a Voice
Employees who feel they have a voice in your company won’t be leaving anytime soon, keeping employee turnover rates low. Ensure that everyone gets an equal opportunity to contribute. At meetings, maybe you can put into place the no-interruption rule that has worked for TV writer, Glen Mazzara. Everyone appreciates the opportunity to provide input and let their voices be heard. Give honest consideration to everyone’s ideas.
Do not knock something off the table unless you are going to replace it. Do not just piss on someone’s idea without offering one better. That’s not fair. That’s not kind. That’s not respectful and that’s not your job. Your job is to generate ideas.” – Glen Mazzara, TV writer
6. Communicate The Company Culture
I emphasize to CEOs, you have to have a story in the minds of the employees. It’s hard to memorize objectives, but it’s easy to remember a story.” – Ben Horowitz, Blogger and businessman
Company culture is something that is lived. It’s hard to explain or describe, but Horowitz put it nicely, “It’s easy to remember a story.” Employees like to not only feel they fit in, but also to feel they are contributing to a greater cause. When everyone at every level is not only on the same team, but feels like they are on the same time, then you are well on your way to establishing a great culture.
Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees.” – Tony Hsieh, Internet entrepreneur and venture capitalist
7. Motivate Your Employees
Take time to appreciate employees and they will reciprocate in a thousand ways.” – Dr. Bob Nelson, Author
You might say that in this difficult job market, every employee should be grateful for the job they have. However, you don’t just want a body at a desk. You want an employee who is energized, who will give you and your company his best efforts. Company events, campaigns with prizes, sometimes even just a word of praise and appreciation…these are opportunities where you can help keep your staff motivated and keep employee turnover rates low.
Treat employees like partners, and they act like partners.” – Fred Allen, Forbes Leadership Editor
Employees, especially young people, want more than a paycheck.” – Marissa Mayer, Yahoo President and CEO
Reward Your Employees
A manager once said that his employees should never ask for a raise since they had been hired at a particular salary. Needless to say, that manager could not keep a low employee turnover rate. In fact, his turnover rate was so high, he eventually lost his job. Most people respond positively to rewards – and those rewards can come in many forms, such as higher salary, more vacation, bonuses, medical or other benefits, and perks like tickets to a ball game, gym membership, etc.
Paying your employees well is not only the right thing to do but it makes for good business” – James Sinegal, Costco founder
Keeping low employee turnover is crucial to building a successful business. If you have to continually search for new employees to replace the ones who leave, you are spending tons of money unnecessarily. Just keep in mind the words of the late Zig Ziglar, “Research indicates that employees have three prime needs: interesting work, recognition for doing a good job, and being let in on things that are going on in the company.”
Work/life benefits allow companies meaningful ways for responding to their employees’ needs: they can be a powerful tool for transforming a workforce and driving a business’ success.” – Anne Mulcahy, former Xerox CEO
So how can you keep low employee turnover rates? It’s as simple as ABC.
A. Hire the right people (and continue to train and develop them)
B. Reward them (and use various types of recognition)
C. Communicate with them (and listen as well as speak)
Managers, what are you doing today to keep your employees?
Employees, what is your company doing that keeps you with them?
Share in the comments below!