It's no secret that turnover is costly for employers, but it's also an unavoidable fact of life in business. Organizations need to prepare for the future and also understand that some of their best employees could leave in the coming years. But many companies fail to do this. They may push employees to leave or mistreat them during their exit interviews. If this happens, employees-- both current and prospective-- can take their experiences home with them.
And it is no secret that HR professionals are under the pressure. We are now seeing a global trend of high attrition rates. So the question on every leader’s mind: is how do you evolve your employee experience – quickly and efficiently – to limit unwanted attrition?
Reasons for Turnover
Studies show that employees don't leave because they hate their jobs; instead, they leave because of a wide variety of reasons, ranging from a challenging environment to lack of communication with their managers to poor career advancement opportunities.
In fact, one recent survey found that nearly 60 percent of people would consider quitting their jobs to become independent consultants. And that's all the more reason to make sure your company's culture is an enticing one and your employees are aware of the opportunities available to them within your organization.
There are several reasons why employees could leave their jobs. One common reason is dissatisfaction with the quality of their work. While most organizations try to hire the right kind of talent, some organizations may be more focused on the "right people" in the right jobs. However, other employees may simply want a change in pace or in the type of work they do. Another reason employees could leave their jobs is that they feel less valued than their coworkers. In some organizations, employees feel that they are being compensated and treated unfairly, while others feel like they're being held to unrealistic standards and expectations. A turnover rate of up to 30% is not uncommon in large, companies with multiple departments.
The Cost of Turnover
According to research conducted by MIT Sloan Management Review, turnover costs companies $3,400 per employee when they're looking to hire and retain top talent. Since that study, we've seen several studies that indicate turnover rates are much higher than this, sometimes in the hundreds of dollars per employee, per year. The key is to identify why employees are leaving and how to prevent this from happening in the future.
A company should be proactive to ensure that their employees feel valued and appreciated and that they're progressing towards a long-term, positive and productive experience with the organization. Otherwise, turnover will continue to be costly.
The Employee Experience
It's hard to avoid the occasional unhappy employee, but, when it comes to HR, it's important to keep in mind that people want to work for an organization that provides value, not just one that doesn't. They want to feel confident in their work and a sense of in their organization. It's important for HR professionals to understand what motivates employees and design an experience that encourages retention.
Ways to Limit Unwanted Attrition
The areas that businesses can focus on to reduce the risk of are:
- Support Company Culture: A huge amount of turnover occurs because employees experience a change in the culture or the organization's values. There are numerous ways to support the mission and values of the company, from conducting employee surveys to providing opportunities for input to having special events for employees.
- HR professionals are advised to assess the specific needs of their workforce to meet the changing needs of employees. HR professionals should also look at company culture and assess what’s working well, which can help HR professionals identify areas for improvement through initiatives such as anonymous feedback programs.
For example, Lumen Technologies has introduced new employee-led panels that allow all employees across each business unit an opportunity to speak directly with HR and senior leaders.
- Employers must also consider the best way to offer competitive benefits packages, as well as how they can use technology – such as social platforms - to communicate initiatives effectively.
- A Clear Purpose and Mission First, employees need to have a clear mission and purpose for their work, one that aligns with company culture and values. When employees feel like they're of themselves to something larger than themselves, they're more likely to stick around for longer.
- Generate employee referrals: Recruiting is an effective way to generate referrals from friends, family, and colleagues, as these people know the person best. Often, they may know the person better than you do. Also, employees are motivated by money. So, it's important to offer incentives for referrals. For example, a referral program can pay up to $500 for the referral of a qualified, high-performing applicant.
- Foster, a sense of belonging: Create a sense of connection and belonging within the organization and reward employees who make a positive impact with special recognition.
Humans are creatures of habit. We get used to our routines and find comfort in the familiar - that's why it can be difficult for HR professionals to introduce new initiatives into the workplace. HR managers need to take bolder steps towards shaping a more dynamic environment for employees.