Reducing employee turnover is a primary goal for almost every human resource professional. By reducing employee turnover, organizations save money on recruitment and training, as well as encouraging a stable, experienced workforce. Efforts to increase employee retention start with improving the recruitment and training process, but continue on to providing challenging, interesting work, a cooperative work environment, and comparable compensation programs. Additional factors that contribute to reducing employee turnover include opportunities for professional growth, additional training, and organizational stability.
Turnover is understood by human resource professionals to be the rate at which an organization's workforce terminates employment and requires replacement employees. In other words, employee turnover is the ratio of vacated and refilled job positions compared to the total workforce of the organization. Certain industries, such as food and beverage, janitorial, and retail, have statistically higher employee turnover rates than others. High turnover rates in such industries typically relate to low pay, a young workforce, high stress, and poor opportunity for advancement.
Improving or reducing employee turnover first requires assessing the reasons why employees leave. Increasing pay rates, for example, may not reduce turnover if the majority of employees leave because of poor work conditions or lack of opportunity. The best tip for reducing employee turnover then is to first determine its cause. Absenteeism rates, productivity levels, and employee complaints are a good place to start when evaluating the reasons behind high turnover. Personal interviews, especially for exiting employees, provides additional insight.
Changes in recruitment and employee training programs can also lead to reducing employee turnover. When candidates are better suited to a particular job role, whether by virtue of past work experience, personality traits, or future career plans, turnover rates are typically not as high. Proper training to prepare candidates for new job roles likewise lessens turnover. Additional training throughout an employee's tenure provides opportunities for professional growth the employee would otherwise need to fund out of pocket, which can increase loyalty and retention. Cross-training employees for additional responsibilities likewise increases each employee's perceived value, as well as providing opportunities for new and interesting challenges.
Organizational culture is also an important factor in reducing employee turnover. Cooperative environments, team work, supportive supervisors, and clear communication of expectations all contribute to a stable, encouraging organizational culture. Studies show that organizational culture and workplace environments are two of the most often cited reasons why employees choose to leave a particular job position. Employees who feel empowered, supported, and valued typically report a higher sense of job satisfaction and, therefore, are less likely to pursue other employment opportunities. As such, instigating changes in managerial hierarchy, employee accountability, establishing open door policies, and similar efforts that bring employees into key decision-making roles typically reduce turnover.
Numerous studies regarding employee turnover and job satisfaction place compensation and benefits far below other factors that contribute to turnover. Although most employees report workplace environments, personal motivation, and challenging opportunities as more important than compensation, it can be a factor in reducing employee turnover. If an organization's base pay and benefit package is not in line with other organizations in the same industry, employees will leave to pursue better opportunities. Periodic review of common industry practices regarding pay and benefits ensures an organization remains competitive and loses fewer employees.