What’s your employee turnover rate?
If it’s more than five years, you’re ahead of the national median of 4.2 years, according to a recent report by the U.S. Bureau of Labor Statistics. But if you could improve it by even half-percent, what would be the impact to your bottom line?
In a nutshell: huge.
According to a Center for American Progress report, the cost of employee turnover can range from 16% of annual salary for high-turnover, low-paying jobs (under $30,000) and up to a whopping 213% for highly-educated executive positions.
So, what can employers focus on to keep their employee turnover rate low? Research scientists have a few razor-sharp employee retention ideas.
1. Organizational Culture
Organizational culture is a big topic for many companies. And many of them noticed that if they have a sustainable culture based on performance, they retain their highest performers and give them a place to thrive.
This report backs that claim up:
“The relationship between the employees' job performance and their retention also varied significantly with organizational culture values. The cultural effects were stronger than the combined exogenous influences of the labor market and the new employees' demographic characteristics.”
Source: “Organizational Culture and Employee Retention,” Academy of Management Journal
2. Employee Voice
Everyone wants to have a voice in the workplace, and they want that voice to be heard. That’s a fundamental aspect behind labor unions, which this report investigated.
The results of this report show that being heard is tied to reducing employee turnover:
“Results show that, whether or not a union is present, high numbers of mechanisms for employee voice are associated with high retention rates.”
Source: “Employee Voice and Employee Retention,” Academy of Management Journal
3. Company Mission
When your company has a mission, it gives a rallying cry that everyone can stand behind. It lets you know that you’re a part of something bigger. And, as this study found, it contributes to employee morale and reducing turnover:
“In general, the employees expressed positive attitudes toward the organization’s mission, and those attitudes were related to employee satisfaction and intentions to remain with the organization.”
Source: “Mission Attachment and Satisfaction as Factors in Employee Retention,” Nonprofit Management and Leadership
4. Flexible Work
Today, many workers spend time exclusively online. And, when the internet can be accessed from just about anywhere, it makes the idea of coming into the office every day increasingly less appealing, especially to millennial and Generation Z employees.
This report backs up that idea:
“…Employees seem to increasingly want a flexible work schedule. Flexible work schedule was cited as one of the main reasons for deciding to remain with the company if offered employment with another organization.
“In addition, this factor was mentioned by numerous authors in the literature reviewed as a significant factor in the employee retention efforts…flexible work schedule will increasingly be an important issue in the efforts to retain an organization’s critical employees.”
Source: “Managing Employee Retention as a Strategy for Increasing Organizational Competitiveness,” Applied Human Resources Management Research
People don’t know how much they’re valued until someone tells them. It seems obvious, but many companies suffering from a high employee turnover rate simply don’t communicate the importance of their people until they're one foot out the door.
From simple thank-yous to elaborate displays of gratitude, communications are key:
“Organizations must make their employees feel valued to earn their loyalty to the organization. One effective tool for this purpose is marketing communications, which can be used to inform employees of the organization's vision, direction and guiding principles.”
Source: “A Strategic Approach to Employee Retention,” Healthcare Financial Management
Whether you’re an athlete, an author, an artist or an actuary, you have to train. Taking the time to practice and excel at your craft is imperative to becoming an expert.
Many companies fail to invest deeply in their employees’ training, as job-hopping has reached all-time highs—why bother spending all that money on a member of your team that isn’t interested in sticking around?
In fact, the converse is true. Training helps keep your people loyal:
“Training is a key retention factor for employees at any age. Statistical evidence indicates job training is a critical factor for personal (behavioral) and professional (technical) development. The availability for all employees having access to training and development programs is critical in facilitating organizational growth, particularly with performance and technological improvements.
“Research supports that both the organizational benefits and cost savings associated with training programs outweigh the initial cost it incurs. Training benefits correlate with higher levels of consistency, competency, productivity, adaptability, independence, and loyalty in employees at any age.”
Source: “Factors Affecting Employee Retention: A Comparative Analysis of Two Organizations from Heavy Engineering Industry,” European Journal of Business and Management
7. Blending Motivation Factors
Some people get out of bed each day and achieve their goals to get that warm, promising feeling of accomplishment. Others still reach their goals to get a tangible reward—a bonus, a pay raise or an award.
Which is best? As this study found, it’s both:
“Given the growing needs for organizations to retain [their] best employees in the face of competition, the findings of the study suggest that certain variables are crucial in influencing employees’ decision to either leave or remain in an organization…It is only a comprehensive blend of intrinsic and extrinsic motivational variables that can enhance retention and reduce the high rate of employee turnover in our various organizations.”
Source: “Employee Retention and Turnover: Using Motivational Variables As a Panacea,” African Journal of Business Management
To maximize the potential of your people, identify and balance the internal and external motivators needed to align and motivate your people and significantly boost your bottom line.