Employment trends reveal the turnover rate in the U.S. job market is spiking. According to research, 41% of employees are looking at a job change in 2024. Turnover is costly, in fact, the annual cost of voluntary turnover is $1.61 million for every 1,000 employees. From training to productivity loss, turnover recovery deeply impacts the bottom line.
Many businesses are responding to this challenge by investing in a better hiring plan. The logic is reasonable: if we hire the right people, retention will increase. Companies that adopt this approach are hiring consultants to manage talent acquisition. These consultants advise on how to be more cost-efficient and effective at hiring. But the truth is, this investment only deepens the loss when employees inevitably leave.
Companies are wasting even more money by hiring additional recruiters and talent acquisition experts if they fail to simultaneously address the real reason for turnover: employee engagement. Here are 4 ways to understand your team’s needs, and actually reduce turnover.
Reduce Turnover with a Benefits Analysis
At the end of the year, conduct a benefits analysis. Ask your employees what benefits they are using, and what they might prefer instead. Redesigning your benefits package to meet the needs of your team is a very effective way to reduce turnover. Not only do your people feel heard and valued, but they are meaningfully compensated, which impacts retention.
Conduct a Stays Interview
At an employee’s work anniversary, conduct a Stays Interview. During this interview, ask individuals to share what it would take for them to leave the company. Conversely, ask what keeps them there. Inviting your employees to share what they love about the company is very revealing and helps leadership make impactful changes to improve employee engagement.
Develop Your Leaders
Poor leadership directly impacts turnover rates. If you are looking to increase employee retention, invest in your leaders. Offer professional development opportunities that improve their communication and conflict management skills. Navigating conflict productively, and communicating in a way that makes employees feel valued improves employment engagement and satisfaction.
Clarify Your Company’s Key Accountabilities and Success Factors
Key accountabilities provide a higher level of clarity around expectations than job descriptions, and it’s much easier to be successful when you fully understand what is expected. Key accountabilities focus on outcomes instead of providing a laundry list of tasks. They require the organization to clearly articulate which accountability is the highest priority and how much time it should take to successfully complete each area of accountability. Finally, key accountability matrices include success factors that describe expected outcomes. Providing employees with this clarity sets them up for success, which ultimately improves engagement.
Effective turnover reduction will require leaders to take a people-first approach. Understanding what keeps your people engaged, and what threatens their loyalty, is the most cost-effective way to reduce turnover and improve retention.
People First, by Amy Lafko