Let’s face it. Employee turnover is real and businesses should pay attention to their employees just as they do to their clients and customers. It is a no-brainer that retaining a loyal customer is easier than acquiring a new one. And hence, every business, irrespective of the industries they operate in, attempts to be as customer-focused as possible to keep its customers happy and engaged. Businesses go the extra mile when it comes to retaining their old customers. This scenario holds true for employees too. Companies shouldn’t be focusing only on attracting and hiring the best talents. They should also invest in their learning and development to retain them and turn them into loyal employees to get the maximum benefit out of their recruitment efforts.
So, what is employee turnover?
Put across in simple words, it’s the number or percentage of employees who leave a company and are replaced by new employees. Employee turnover can be voluntary or involuntary. No matter what type of turnover it is, as an HR person you would agree that it takes a toll on the company when an employee leaves an organization. From loss of revenue to loss of productivity… it hits hard from all directions.
Employee turnover matrices you should be concerned about
- Retention rate
- Overall turnover rate
- Voluntary turnover
- Involuntary turnover
- The retention rate of star performers
- The retention rate of low performers
- Manager’s satisfaction with a retention rate
- Turnover costs
Controlling employee turnover
The cost of employee turnover is exorbitant, with some recent estimates putting the price at $45,000 to $150,000 to replace an employee (This number, of course, would be different for India). Given this cost, it is evident that for the HR department, one of the critical roles is to not just attract talent, but retain them too.
“TO CONTINUE INCREASING ENGAGEMENT LEVELS AMONG THEIR EMPLOYEES, ORGANIZATIONS NEED TO INVEST IN AND DELIVER A STRONG EMPLOYEE VALUE PROPOSITION (EVP),” SAYS BRIAN KROPP, GROUP VICE PRESIDENT FOR HUMAN RESOURCES AT GARTNER.
Measures to control employee turnover
There are several measures that one can take to control one’s employee turnover. To begin with, you need to analyse and find out the top reasons for employee turnover and then take measures to fix them. Some of the industry best practices to control employee turnover are:
- Cash is the king. So, pay more to keep your employees happy. However, this might not be feasible always from the point of view of your company’s bottomline
- Recognition helps an employee feel valued. A pat on the back or monetary rewards, whatever works for you… but rewarding for exemplary performance helps in the long run.
- Job rotation helps an employee to overcome the monotony from his/her work routine. Also, ensure the workload for all employees is equally balanced.
- Foster a friendly work environment.
- Trust them with responsibility. Micromanagement doesn’t increase productivity. Instead, an employee works harder when he/she feels his contribution matters to the company.
- Be open to feedback. Conduct exit interviews when an employee leaves, learn what made them unhappy and take necessary corrective actions.
Is Apprenticeships an answer to employee turnover?
CIO SAYS ONE OF THE MAIN REASONS FOR EMPLOYEE TURNOVER IS THAT THERE IS NO ROOM TO GROW. “IT DOESN’T MATTER IF THEY LIKE WHAT THEY’RE WORKING ON, WHO THEY’RE WORKING WITH AND ARE COMPENSATED FAIRLY OR MORE THAN FAIRLY. THEY HAVE TO FEEL THERE’S SOMETHING IN IT FOR THEM,”David Foote, Chief Analyst, and Research Officer at Foote Partners
Otherwise, they will be tempted to search for employment elsewhere or be susceptible to recruiters. To sort out this issue, nurturing an apprenticeship program in the organization is an effective way out. Making career advancement opportunities available through fostering apprenticeship programs is a must for organizations that want to curb employee turnover especially if they are moving out for better career opportunities. For technology companies, you must always stay on the top with cutting edge technologies and keep your employees updated with the relevant technical knowledge. When you do so, employees will always have something to learn and upskill themselves at work and might not consider leaving you for better career progression.