The 2017 Retention Report analyzed over 240,000 exit interviews to pinpoint exactly how preventable employee turnover is. Their study revealed that over 75% of the reasons employees left their jobs in 2016 were preventable.
The long answer is that employee turnover isn’t preventable if you don’t understand why your employees are leaving. Can you pinpoint the red flags leading up to turnover?
Understand employee turnover to prevent it
The average cost-per-hire to fill a position at $4,129. If you could reduce even a fraction of your attrition, what would that mean for your bottom line? (Seriously, have you ever calculated turnover costs at your organization?)
If you typically see 20 of your 1,000 employees leave, annually, you could be spending around $82,580 on attrition. Now imagine reducing that figure to 10 employees. Cutting this figure in half saves you $41,290 each year.
To minimize this expense, you’ll need to get to learn why it’s happening in the first place. The first step is to have meaningful conversations.
Exit interviews as a solution
Exit interviews are typically reserved for voluntary separations. In an ideal world, employees will tell you the truth about why they are leaving your organization. To make an exit interview effective, it’s crucial to ask the right questions. Some great examples are:
- How is/was your relationship with your manager?
- Were the job functions in line with your pre-hire expectations?
- Did this job align with your personal goals?
- Did we provide the tools you needed for success?
Additional Reading: WHAT IS EMPLOYEE RETENTION AND WHAT FACTORS CONTRIBUTE TO IT?
Implement the feedback you’ve learned
The information you receive from exit interviews is incredibly valuable. Smart businesses will use the feedback to improve recruiting, training and strategic planning.
Effective implementation of exit interview feedback has been shown to lower employee turnover by 15% in the first year.
Learn about attrition in your industry
You’re not the only business who experiences turnover. In fact, some industries get hit more often than others. Compare notes with other businesses in your industry for a comprehensive look at turnover patterns.
In general, the reasons why most people quit are similar. According to a study by Bamboo HR, your employees are leaving for surprising reasons. Spoiler: It’s not always about the money.
- The first reason why turnover occurs is due to lack of professional advancement.
- The second reason is inadequate work/life balance.
Inflexibility from a workplace is a major issue, and one growing even faster in a young work environment. The same study finds that beginning at age 45, employees accept they might need to work after hours, weekends, or on vacations per pressure from an employer.
The problem is that the majority of those in the workforce are millennials – ages under 45. In 2015, Millennials officially surpassed Gen Xers as the largest generation in U.S. labor force.
Extra effort – without employer reciprocation – doesn’t always jive with your employees’ hopes for a strong work/life balance.
Check your place in the market
The United States is currently experiencing a tight labor market. Job openings in the U.S. are growing year-over-year, but the number of employed persons remains the same. That means there are more jobs than workers.
Or in direct terms, your top employees are currently being recruited away from you.
As an employer, it’s time to start looking at your employees differently. Focusing on the well-being of your workforce can play a major role in preventing employee turnover. It’s also an opportunity to adhere to the growing workforce needs for flexibility. By offering your employees unique benefits or perks you can differentiate yourself from your competitors and inevitably protect your bottom line.
Reiterating the true cost of turnover
At the end of the day, employee turnover is expensive. A business will lose money in many different ways:
- Valuable time is spent interviewing, training, and retaining new hires.
- Valuable Customer Relationships: Long-term employees have the ability to build even stronger relationships. Worse yet, they might take their loyal client with them.
- Productivity: Those employees had to be doing something, right?
- Overworked Staff: The already-busy remaining employees pick up the slack until a replacement can fill the exits’ shoes.
- Expert Knowledge: Sure, the new employee will learn how to do the job. But it takes time to be the best.
This lost revenue is preventable. Learn how DailyPay can help solve your employee turnover problems.