10 Causes of Employee Turnover and How To Correct Them
Employee turnover. Every employer’s nightmare, amiright? If you think turnover rates are improving, I hate to break it to you, but you’re wrong. According to the Bureau of Labor Statistics, total turnover rates in 2018 were 44.3%. Yes, you read that right. But that’s an average of all the industries. Total turnover for the hospitality industry was 76.7% in 2018. If you’re internally crying right now from those statistics, don’t worry. Let me wipe those tears and fears away by explaining 10 common, but fixable, company turnover mistakes.
Firstly, why is turnover even important? Well, for one thing, you can’t have a business without the people. Employees are a necessity to function, and GOOD employees are a necessity to profit. Turnover affects both your profits and workplace culture.
Every time a business replaces a salaried employee, it costs the business 6 to 9 months’ worth of that person's salary, according to the Society of Human Resources & Management. Don’t have salary employees? You’re not off the hook (sorry). On average, replacing an hourly employee costs around $3,328 once you factor in recruiting, interviewing, and training time.
On the other side of things, high turnover also negatively impacts employee morale, loyalty, and productivity. It should be clear by now that a smart goal is to reduce turnover. It's a sneaky little devil that will destroy your success if left unattended.
Causes of Turnover and How to Fix it
When employees become bored and uninterested in their jobs, they’re on the path to leaving.
Turnover Tip: invest in your employees' professional development. Challenge them, let them have a say in decisions. Always find room for them to grow and flourish. Work on improving your employees' overall satisfaction with their job! The more you can involve your employees in your business, the longer they’ll stay.
2. High-demand employees
Skilled employees have more potential to leave for better pay, benefits, or title.
Turnover Tip: Keep your most talented employees by ensuring open communication on their career development. Be honest with them, acknowledge their value, show the impact they have on the company. Evaluate their performance, always give tips on improvement and offer more cross-training opportunities to keep them engaged and constantly growing. Investing in your employees shows your value and respect for them.
3. Job requisite mismatch
Over- or under-qualified employees will realize the skill level mismatch and move on to a more fitting position elsewhere.
Turnover Tip: While recruiting and interviewing, make sure the candidate knows exactly what the position entails. From day-to-day expectations and schedules, to how they will contribute to the company. Being on the same page will prevent this mismatch mistake in hiring.
4. Workplace culture
Similar to job requisite mismatch, some people just aren’t fit for certain work cultures. If the cultural fit isn’t there, the employee will feel disengaged and left out. Even worse, this could affect current employees as well.
Turnover Tip: When hiring, discuss company values and your mission statement. Make sure the candidate’s values and goals align with the company’s. Also think about how a candidate will fit in with other employees. The goal is to create a team so strong that company culture is never questioned or hindered. You want all your employees to thrive working together. A unified team means increased employee productivity too!
5. Poor working conditions
Employees don’t often stick around when their workplace environment has health violations, safety hazards, or bad behavior from co-workers and upper management. Poor working conditions results in low workplace productivity and unhappy employees.
Turnover Tip: Make sure you deal with any “toxic employees” that could be wreaking havoc on team morale. It’s a common fact that employees quit due to bad managers, supervisors, or even fellow employees. I know sometimes this employee could be valuable, but is he worth your entire team? Nope. Of course, also always ensure your business is up to par on health codes and safety procedures to ensure a safe work environment as well.
Lack of acknowledgment creates dissatisfied or even angry employees.
Turnover Tip: Make sure your employees consistently feel appreciated. To do this, integrate recognition into your weekly activities. Bring achievements up in morning meetings. A little recognition can go a long way when it comes to employee morale. Even if you aren't spending money on training, encouragement and acknowledgment are a way of investing in your employees' well-being. Your employees are helping your business, so make sure they know it!
7. Being overworked
When an employee is continually working back to back or longer shifts, frequent overtime, or has trouble when asking off - they will not stay around.
Turnover Tip: Don’t schedule your employees more than they can handle. Be considerate and respectful of their desired hours and availability. And remember, they have lives outside of work. So be flexible when your employees request time off.
Happy employees = productive employees = profitable business.
8. Inadequate training
Training is key for improving employee turnover. A lack of training can cause new employees to be confused and then continually fall behind in their level of performance.
Turnover Tip: Employees need proper guidance and clear direction from the start in order to thrive. Be clear on what you want them to do from day to day. Show them how to do it. Give them time to ask questions and learn at a comfortable pace. Assign them to a more experienced co-worker to follow along and learn from. Again, invest the time and effort to ensure they're confident and comfortable working every shift.
9. Poor pay
Low or unequal pay will drive employees to leave.
Turnover Tip: Minimum wage isn’t going to cut it in most scenarios anymore. Make sure you're offering competitive wages to be fair to your employees. Reevaluate at least once a year for raises (most employees will begin looking for new jobs if they aren’t consistently receiving raises annually). Don't fret if there isn't enough money to go around. There’s also other ways to compensate outside of paychecks - such as more flexible work options or extra paid time off. You can get creative to make your employees lives better!
10. Lack of modern technology
Companies not up to date in today’s technology deter employees - especially younger ones. Everyone knows technology makes lives easier.
Turnover Tip: Invest in cloud-based employee tools and technology that fosters collaboration and efficiency. Online scheduling and communication softwares can save you and your employees’ time. Employee scheduling can be a turning point for turnover. Good scheduling means reduced turnover! Times are a changin' and companies need to follow suit in order to reduce turnover, increase employee productivity, and have a growing business.
Want to calculate your own employee turnover? This article from Qlicket will show you how!