When you're in the early stages of <a target="_blank" href="https://www.entrepreneur.com/topic/business" class="auto-tagged ga-click ai-metadata" data-ga-category="autotag-linking" data-ga-label="ai-metadata" data-ga-action="/topic/business" rel="noopener">business</a>, it can be tempting to try to save money by <a target="_blank" href="https://www.entrepreneur.com/en-ae/starting-a-business/five-things-to-remember-when-hiring-your-startups-first/334660" rel="follow noopener">hiring as few employees as possible</a> and paying them less than they deserve in order to keep your overheads low. However, there are several reasons why taking this approach isn't ideal, and one of the biggest factors is the <a target="_blank" href="https://www.entrepreneur.com/living/heres-the-secret-to-reducing-employee-turnover-and-cutting/391624" rel="follow noopener">employee turnover rate</a>.
Perhaps you’re an experienced business owner and you’ve been running your company for quite a few years, but you still find employees leaving constantly. Either way, if your team has a high turnover rate, it’s time to re-evaluate the way you manage employees and pay them accordingly.
Related: Staff Turnover Is Draining Your CompanyCauses of high employee turnover
There are many reasons why employees may choose to leave their current position. Maybe they feel like they’re not being paid enough, or they don’t have enough opportunities for growth. Maybe the company culture is toxic, or they’re just not happy with their current situation.
I recently spoke with someone who found themselves working at a company that was constantly losing people — and bringing in new people. They told me that they noticed the CEO tended to give people more projects than they could manage. Eager to please during their first few days at a new job, people would say yes to anything the CEO asked, and the CEO would often ask for projects to be completed that were not included in people’s job descriptions. These new employees would do their best, hoping to impress their new boss, but what they did not realize is that they were setting a precedent where the CEO constantly asked for projects they were not paid for on top of their normal day-to-day duties.
The owner of this company would often express confusion at the high turnover rate. From the outside looking in, it is very easy to see the issue and diagnose it. The owner of this business is passionate and always excited for the future. It’s easy for them to get caught up in the potential of what could be and not what is happening currently around them — specifically with employees. That being said, if your company has a high turnover rate and you can’t figure out why, it’s time to ask for help. Ask your employees for honest feedback as to why they are leaving. Hire a business consultant. Get some help to take a step back and see the whole picture.
Why no one wins when there is constant employee turnover
Constant employee turnover is costly and time-consuming. Not only do you have to worry about the cost of hiring and training new employees, but you also have to deal with the negative impact it has on morale. Additionally, high turnover rates can be a sign that something is wrong with your company culture or that your employees are not being treated well. If you want your business to succeed in the long run, it’s important to address these issues head-on.
How to manage employee turnover and boost retention
If you’re struggling with high turnover, there are a few things you can do to try and mitigate the issue. Firstly, it’s important to consider your hiring process. Do you take the time to interview and select employees that are the best fit for your team? Secondly, think about how much responsibility each new hire is given when they start working for your company. Lastly, it’s imperative that you don’t take advantage of your employees by overworking them or not paying them enough. When done properly, these strategies should help reduce high employee turnover rates.
If you want to ensure higher employee retention in your company, there are a few key things you can do:
Don’t overwork your employees. Make sure they have a good work-life balance so they don’t feel taken advantage of.Be open to feedback and constructive criticism. This will show your employees that you’re invested in making the company a better place to work for everyone.Offer competitive salaries and benefits. This will help attract and retain top talent.Promote from within whenever possible. This shows your employees that there are opportunities for advancement within the company.Foster a positive and supportive work environment. Employees who feel like their contributions are valued will be more likely to stay with the company.Train new hires on what it means to be an integral part of the team and provide resources to support them through any struggles they may face at work (e.g. ensuring they have access to flexible scheduling).Be transparent about changes that could affect the workday or any other aspects of employment (e.g. layoffs).Treat each individual with respect, dignity and appreciation while giving them the opportunity to succeed in their job role as best as possible.
If you have a high employee turnover rate, then it’s time to revisit your inner business practices to determine why people are leaving so you can create a stable, healthy work environment that allows both your business and employees to flourish.