How to Reduce Employee Turnover

Managing employee turnover is part of running any business, but excessive turnover or “churn” is incredibly harmful to companies.

Aside from the steep cost of turnover (on average 1.5 – 2x the annual salary of the departed employee), a company with turnover problems can experience constant disruptions to productivity, low morale and a “culture of turnover,” where nobody expects to or wants to be working at the company for very long.

Unfortunately, an organization experiencing the effects of high employee turnover can remain this way for extended periods of time, as constant turnover is generally disruptive and demoralizing to the lives of employees, causing more people to put in their notice.

Fortunately, there are plenty of ways to slow or even reverse a bad turnover trend, as outlined below.

What Causes High Employee Turnover?

To reduce employee turnover, it is essential to understand what causes employees to leave your organization.

To get better HR metrics on why your employees are leaving prematurely, you should gather exit data that explores the reasons your employees are leaving. By conducting exit processes, you can identify the biggest causes of turnover at your company and create policies that are aimed directly at rectifying the issues which are causing employees to quit.

Everyone has a different reason for quitting, but here are some of the most common reasons as to why people leave their jobs voluntarily:

  • They do not feel a fit with their team, their manager or your company.
  • The day-to-day responsibilities of their role is not what they expected.
  • They do not feel adequately trained or supported in their work to perform to the best of their abilities.
  • They do not feel like the company is thriving or going in a good direction.
  • They are unable to balance the job with their family or their life outside of work.
  • They do not feel recognized for their hard work or contributions.
  • They feel or know that they are being paid less than others in the area.
  • They feel like there aren’t any chances for them to advance in your company.
  • They feel like they have little job security.
  • They feel like there is a culture of favoritism, workaholism or other toxic work environments.

How To Reduce Employee Turnover

Excessive turnover can have many interrelated causes, but learning how to prevent employee turnover is simple and contains just three parts:

  1. Make Better-Fit Hires. Hire people who are a good fit for the job and the company.
  2. Provide an engaging work environment. Build a work environment that everyone can thrive in and enjoy.
  3. Collect and respond to data. Capture solid, actionable data to understand what is causing people to leave and address those issues systematically.

By reaching these three objectives with a series of policies and practices that address the exit interview feedback you receive, you will find the solution to your turnover problems.

Here is a breakdown of these three objectives, with 12 specific action items to improve employee retention and reduce employee turnover at your company.

Make Better-Fit Hires to Reduce Employee Turnover

1. Use automated reference checks to hire smarter.

One of the most effective ways to reduce employee turnover rates is to make better-fit hires to begin with.

It’s important that new hires are skilled enough to perform the work required of them, but even more importantly, new hires need to feel at home at your company. 89% of turnover is actually due to company culture misfit, not a lack of skill, and it is crucial for you to make hires who are both up to the job and will enjoy working for you.

Harver’s digital reference checks help to identify key fit factors in candidates, which will clearly indicate the likelihood that they will fit with your organization. By using our color-coded data visualization with reports showing individual scores vs all applicant averages, you can quickly determine a candidate’s competency in a way that’s scientifically backed.

Did you know? Using pre-hire assessments can increase quality of hire and reduce attrition by strengthening two-way matching with candidates. Learn more about positive business outcomes >

Provide an Engaging Work Environment to Reduce Employee Turnover

2. Recognize Employee Accomplishments and Effort

Recognizing the accomplishments and effort of employees is essential to the skill development of employees, maintaining staff morale and preventing employee turnover. If employees aren’t being recognized for their hard work, they will become discouraged and disengaged.

The frontline of employee recognition is the relationship between manager and employee, and managers need to understand the importance of their role in reducing turnover.

By making it a priority to recognize the efforts of each individual employee publicly and privately, managers help to create a culture where hard work is acknowledged and respected.

3. Offer Clear Career Paths in Your Company

Every employee needs to see the career paths at your company and understand how they can progress to a more advanced role. Feeling that you’re stuck in your current role for the foreseeable future is highly demotivating and causes many to start looking for another job.

During performance reviews, managers should be ensuring that all employees understand the career options they have at your company and what will be required to reach the next level. Whether through exceeding performance standards by a specific margin or receiving training/mentorship, all employees should know how they can reach the next level.

An important note: prioritize promoting or hiring from within, in lieu of making outside hires. If your employees do not see their high performing peers moving up the ladder, they will lose hope of getting promoted themselves.

4. Provide Better Training and Mentorship

Effective training and mentorship programs are essential to employee performance, job satisfaction and long term retention. If employees feel like they were not adequately trained for their role, they will become frustrated and leave your company.

Always ensure that new hires are sufficiently trained when they join your company and ensure that training is provided ongoing so employees can perform to the best of their abilities.

Training is also key in preparing employees for more advanced work in your company, and you can easily develop your next generation of managers through a larger investment in training.

5. Give Employees More Flexibility

Giving employees the flexibility to manage all of the details in their busy lives shows them that your company has their back and cares about their wellbeing. If your company cannot provide the flexibility that your employees need, then they will find a company that can.

Some roles require more “face time” than others, making working from home ineffective, but everyone should be provided with flex options to maintain a healthy work/life balance.

Letting employees to take a half day when they have to drop their kids off at soccer practice or allowing them to work from home here and there will help your company retain more employees for longer periods.

6. Give Employees More Autonomy

Providing more autonomy to employees in how they get their work done promotes more creativity, engagement, critical thinking and innovation at your company. Employees who feel like they have no control at work will become demotivated and find a job with greater levels of autonomy.

Some jobs will be constrained by procedures that are essential to the role, but any increase in autonomy (time devoted to independent research, providing more choices in your learning/training program, etc.) will be noticed and appreciated by employees.

By giving employees more control over how and when they complete their work, you give them the freedom that they need to excel in their duties.

7. Keep Compensation Competitive

Providing compensation that is at or above industry averages shows your employees how much your value their hard work. Compensation needs to keep pace with your competitors, or else you will continue to lose your top performers to the competition.

Always keep track of the current levels of compensation and benefits packages offered in your area, by your competitors and in your industry as a whole.

While you may not be able to match every competitor, you need to remain in the average compensation range or else continue to feel the impact of employee turnover.

8. Recognize The Success of Individuals with the Success of the Company

By recognizing the link between the success of your company with the performance of departments, teams and individuals, you help employees to see the effects of their hard work. Nobody wants to feel like their job has no real world impact, so always show your employees how their hard work is benefiting the company, your industry and the world.

Employees should be kept up to date on company initiatives and be given their share of the praise and the prize when your company performs well.

Offering stock options and other company performance-based benefits will help employees to feel your company’s success in their wallets as well as their hearts and minds.

9. Foster an Inclusive and Collaborative Company Culture

An inclusive and collaborative culture will help all of your employees to respect one another, help one another and enjoy work a whole lot more. Company cultures that are not inclusive or collaborative are alienating and will cause many employees to get less out of their jobs and quit your company.

To ensure that your employees are inclusive and collaborative, these values need to be central to your company’s mission and preached at every level of your company.

Further than just talking about these values, they need to be backed by policies that increase diversity at your company and support the effective collaboration of employees.

10. Monitor and Drive Engagement

Engagement is a key HR turnover metric to monitor. Engagement is improved by providing a work environment where everyone feels supported, challenged (but not impossibly so) and appreciated for their efforts. Disengagement is one of the biggest drivers of turnover, and can stem from any number or organizational problems, from punishing performance standards to a toxic company culture.

Your managers are some of the biggest factors in how engaged your employees are, and one of their KPIs should be employee engagement.

By monitoring engagement levels, you can also see how effective your new retention-focused policies are as you instate them, allowing you to make adjustments to or drop ineffective initiatives.

11. Provide Effective Feedback More Often

Providing effective feedback helps employees have an accurate understanding of their performance: where they are excelling and where they need to work harder. Employees who don’t receive enough feedback can feel unsure about their performance and unsure about their future at your company.

To ensure employees are confident in their performance and learning from their missteps, effective feedback needs to be provided more often, especially for employees who have recently learned new programs or who are showing signs of disengagement.

An important note: feedback always has to be constructive and accurate. If you’re telling someone they’re doing a great job and they aren’t, then you aren’t helping anyone.

Capture Solid, Actionable Data to Reduce Employee Turnover

12. Uncover the Real Reasons for Turnover

Do you know why you’re currently losing employees? The best way to prevent future turnover is to find out what is causing employees to leave today (particular key contributor employees), and fix those underlying issues.

Traditional exit interview methods often do not extrapolate the critical data around employee turnover. Seeking to maintain a good relationship and keep strong references, exiting employees usually offer canned, polite responses to exit interview questions by HR. In addition, usually that information is not recorded a practical manner to make it useful in the future.

The Solution to Reduce Employee Turnover

Harver’s Digital Reference Check gives you unparalleled candidate fit data from an average of 6 references, allowing you to choose people who will feel more at home while working for you.

Better reference feedback is directly linked to smarter hiring decisions and longer retention periods for these hires. You also need to be mindful that backfilling constant unwanted attrition can burnout your recruiters. Learn how to prevent recruiter burnout and turnover >

Harver Team

Harver Team

Updated on:
July 26, 2023

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