Tips for Reducing Employee Turnover
Rates of voluntary turnover have been increasing since the economic downturn, according to The Conference Board of Canada. This means your business is spending time finding, hiring and onboarding new workers instead of using those resources to grow your business. Studies show that losing and replacing a manager can cost you up to 18 months’ salary, and 6 months’ salary every time you lose an hourly worker. Whoa! So let’s look at a few tried-and-true ways to reduce employee turnover so you can focus on your business.
Show Me The Money
Too often we think we can throw money at the problem of employee turnover but it’s not that simple. While increasing salaries can help to reduce employee turnover, Daniel Pink suggests employers need to take money off the table, pay employees what they’re worth and focus on what matters; motivating them to do a great job. But, various studies suggest a competitive wage isn’t enough, that employers looking to reduce employee turnover should make everyone’s salaries transparent. Of course, only after you make them fair.
Even if your small business simply can’t afford to pay your employees 100% market rate, you have other tricks in your bag to help reduce employee turnover. The most powerful is the opportunity for advancement. Most people enjoy challenges and opportunities to grow and learn and a small business can offer more and faster opportunities for employees to advance their careers with new skills and better job titles than larger companies. While promotions won’t fill a significant pay gap, advancement opportunities can make up for a few percentage points below market salary.
So ask yourself, where do you need more skills? And ask your employees, what do they want to do next? It won’t take a venn diagram to fill your employees’ need to learn and grow.
Too Much Too Little
Let’s face it; there’s a lot to do in a small business and never enough resources. You rely on your team to wear multiple hats and jump in wherever there is a need. But, even star performers can get burnt out when you constantly turn to them rather than invest in supporting resources.
Adding fuel to the overworked fire is a lack of recognition with enough or appropriate sincerity. Together, overworked and underappreciated, will always lead to unhappy employees that no amount of money can satisfy.