If you’re not thinking about employee turnover, you should be. Turnover could very well be the biggest talent issue your company faces for the foreseeable future. Research from 2018 shows employers were struggling to retain employees prior to the pandemic and now, due to the shutdown, those rates are expected to rise.
Currently, experts predict voluntary turnover will increase significantly as employees resume the job searches they put off when the pandemic began.
So why is this an issue? Employee turnover is extremely costly, in more ways than one.
The expenses associated with turnover, including recruiting, hiring, onboarding and training, can be huge. It has been estimated that is costs about $4,000 to hire a new employee.
There are hidden costs to employee turnover as well. When an employee leaves, the other team members must pick up the slack, adding to their likely already overstretched workloads. And in many cases the outgoing employee is taking years of company knowledge along with them, leaving the employer struggling to fill the skills gap left behind.
In order to fight turnover, you need to understand the reasons why employees quit.
Post Pandemic Burnout
Recognizing and preventing burnout has always been an issue for employers but the pandemic has taken this issue to new heights. According to the Human Resource Executive, pandemic stress and uncertainty, working longer hours, lack of HR advocacy and working from home all contributed to workers feeling undervalued and burned out, as well as being disconnected from company culture.
Add in stimulus checks, unemployment benefits and vaccinations and many Americans who are already in desperate need of a break had the ability to take a step back and evaluate their options.
According to the Bureau of Labor Statistics, employee quit rates continue to rise.
- April 2016 0%
- April 2017 1%
- April 2018 3%
- April 2019 3%
- April 2020 8%
- April 2021 1%
Issues Beyond Pay
Employees work for a paycheck but they want more from an employer and if they don’t get it, they’ll look for it elsewhere. Reasons employees would leave their job include:
- Better benefits and compensation 32%
- More work/life balance 25%
- Lack of recognition 16%
Ways to Combat Employee Turnover
Turnover can’t always be prevented. A certain percentage of employee turnover is healthy for a company. Employers need to terminate employees who underperform and new employees can invigorate a team and generate new ideas.
Employers should strive for a healthy turnover rate, one that allows the business to run smoothly and presents more opportunities than headaches. If the bottom 10% of your staff underperform, 10% should be your ideal turnover rate.
Discovering your company’s voluntary turnover rate simply requires calculating the number of employees who leave per month. Use this formula: (Total Number of Voluntary Terminations / Total Number of Employees) × 100. If your percentage is high, consider taking these actions to reduce your numbers.
- Conduct regular performance reviews and frequent touchpoints to find out what your employees’ career aspirations are and set goals together to achieve them. Use a learning management system (LMS) to upload and deliver training on-demand while providing other opportunities for development like attending webinars, conferences and providing mentorship opportunities. An LMS can also be used to upskill your employees, reducing future skills gaps.
- Advise managers to offer regular performance reviews with employees, including providing 360-degree feedback from others at the company, including co-workers and even the CEO, to eliminate any potential biases that may exist between the employee and the manager. Regular reviews help foster communication and the exchange of ideas, strengthening the relationship between manager and employee.
- Conduct exit interviews. Exit interviews give HR valuable insight into why employees leave. They provide an opportunity to track employee turnover and highlight any problems or issues the company might not be aware of, including when it comes to managers. Format questions to understand the employee’s level of job satisfaction, how they felt their efforts were recognized, relationships with co-workers and managers, development opportunities and company culture. Once you hear the feedback, look for trends, share the information with leadership and determine the next step.
To see a helpful summary of the data shared in this article, you’ll enjoy the infographic Calling it Quits.
These interpersonal techniques are important, but technology can also help mitigate turnover. Employees are happier when they can use technology to not only do their job better but gain new skills as well. Now is the time to invest in HR tools that help you source and cultivate talent quickly and efficiently. A cloud-based applicant tracking system, performance management system and learning management system can give employers an edge for successfully stemming turnover. Want to learn how? Schedule a demo.