Employee turnover can be a big challenge for any business. It can have significant time and cost implications, as you’ll need to recruit again for the role, pay for training, deal with productivity loss, as well as other key factors affecting your business output.
To help you keep your employee turnover levels down, this article looks at why employees may decide to leave, signs you should be looking out for, as well as suggestions on how to prevent employee turnover from becoming an issue.
Why do employees leave a company?
According to research by Robert Half, 46% of CFOs in Hong Kong anticipate an increase in employee turnover within their organisation over the next 12 months.* If you believe that your company is anticipating an exodus of staff, it’s imperative to take the time to identify what the cause is promptly. There are three main categories to start with:
1. An employee may leave because they are dissatisfied with their current role, or the business that they work for
2. Employees may be attracted by a new opportunity at a different company. They may seek out this role themselves, or they may have been approached by a competitor
3. Employees may be experiencing a change in the current circumstances and therefore feel they have no choice but to leave
Signs an employee may be thinking of leaving
Unfortunately, it’s not always possible to know when an employee is thinking of leaving. However, there are some key tell-tale signs that you should be looking out for:
- They contribute less – If a previously engaged employee suddenly doesn’t contribute in meetings or add to discussions, this should raise a red flag. It doesn’t mean for certain that they’re going to leave, as there can be other explanations, but it’s something you should certainly monitor.
- They are absent a lot – From time to time, an employee may need to take a day off due to illness. But if they rarely take sick leave and are now seldom in the office, they could be feeling disengaged with their work, or attending interviews.
- They take personal calls during work hours – If an employee suddenly gets more personal calls than normal, don’t automatically jump to conclusions. However, if it becomes a frequent occurrence, it could be that they are talking to recruiters.
- They missed out on a promotion – If an employee was hoping to get a promotion, but missed out, they may be feeling quite low and disengaged. This is a crucial time to step in and talk to them about their future at your business, before they start looking elsewhere.
- They are going through a major life change – Some employee turnover isn’t because of something you’ve done, or even a competitor. Employees may have got married, divorced, are having children, or are buying a home. All of these can result in them reviewing their job, their future at the company and even their location.
They seem uninterested – If your usually productive employee suddenly isn’t putting in 100%, turns up late, takes long lunches, starts complaining or seems distant, you should speak to them to see whether there is an issue that can be resolved.
How to prevent employee turnover from becoming an issue
You simply can’t persuade every employee who is thinking of leaving, to stay. However, there are certainly several employee retention strategies you can deploy, to help retain good staff and develop a more stable workforce in your business in the long-term.
1. Create a good recruitment and selection process – Employee turnover starts at the very beginning of the process. By making sure you have an effective recruitment strategy and you are selecting the right people for the job, this will help to increase your chances of them sticking around for longer.
2. Show your appreciation – A simple “hello” in the morning, or a “thank you” for good work doesn’t cost anything but can go a long way towards making an employee feel like a valued member of the team and appreciated. Without this step, you may find morale levels dropping.
3. Ensure pay is fair – A salary is not always the deciding factor on whether an employee stays or leaves a company, but it does have some effect. After all, everyone has bills to pay. Make sure you look at what competitors pay staff, to establish whether your rates are fair.
4. Offer staff incentives – There are lots of employee benefits you can provide to help keep your employees loyal. These could include bonuses, performance-related pay, healthcare packages and gym memberships. If your budget doesn’t stretch that far, why not give staff more flexible hours (to encourage a better work-life balance), allow them to take their birthday day off, support working from home initiatives, show your recognition by running “employee of the month”, or by arranging discounts with local businesses. Other fun things you could try is casual Friday’s, free fruit in the kitchen and you could order lunch to your office after big wins.
5. Provide learning opportunities – Employees often want to develop their skills and experience. Without these opportunities, employees may feel like their role is stagnating and they have no way to move up the career ladder. You could therefore consider signing them up for courses. If your budget doesn’t allow, you could research online learning options, recommend events they can attend and webinars. You could bring outside experts in, give them a mentor and encourage all staff to share their knowledge through specially arranged sessions.
6. Make your office a great place to work – Employees spend around eight hours a day in the office and so try to make it an enjoyable place for them to be. Consider reorganising desks, giving the walls a fresh coat of paint, adding some plants and hanging some inspirational posters. You could even invest in some comfortable new chairs, which can make a big difference to people’s morale and productivity.
7. Implement an open-door policy – If employees feel like they can go to their manager, in confidence, to discuss an issue, you may be able to resolve things, before they escalate.
8. Give regular performance reviews – Make sure you have regular performance reviews with employees. This is a chance to help discuss with them their goals. You should also discuss the business objectives and show how they can achieve their own goals by staying at the company. Reviews should work both ways though and so it’s the perfect opportunity to get feedback on how satisfied employees are and if they have any feedback on how things can be improved. It’s better to ask than to find out for yourself when it’s too late.
9. Communicate how the business is performing – Employees don’t want to feel like they’re just working in a silo. To feel good about their work, they want to know how they have contributed to the bigger picture. It can therefore be a good idea to explain the business objectives, share how the business is doing financially and what the future holds.
10. Encourage positive working relationships – As we all spend so much time at work, it’s important for employees to get along. It’s not always easy when everyone’s tied to their desks, but you should encourage interaction with team days out, drinks out after work at the end of the week, as well as a Christmas party and summer events.
11. Give managers training – One of the reasons why an employee may decide to leave is because of a bad boss. It’s therefore important to ensure all your managers receive thorough training, so they lead their team effectively.
12. Run exit interviews – Although it may now be too late to persuade an employee to leave, finding out the reasons why they left can be invaluable. Listen to what they have to say and make appropriate changes, so other employees don’t leave for the same reasons.
This is certainly not an exhaustive list of strategies, but it is a good starting point to help you reduce your employee turnover. Make sure you monitor your employee turnover rate at regular intervals, to see if it improves. You should also have a contingency plan in place, for those times when an employee may unfortunately, despite your best efforts, fall through the net.
Your employees are valuable assets and without them, your business wouldn’t be able to operate. It’s therefore important to invest time and money in them, ensure they have the necessary tools and skills to do their job and are content in the company.