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The average employee turnover rate in the U.S. hovers around 22% during most years. The 2021 report from the Bureau of Labor Statistics showed that the total separation rate in 2020 was 57.3%. But the number of people voluntarily leaving their jobs in 2020 actually dipped significantly as employees were hesitant to add more uncertainty on top of an already chaotic year. Now, as organizations begin eying a return to normalcy, many organizations are bracing for massive churn and what the Society for Human Resources Management (SHRM) dubs a, “turnover tsunami” after the slowing of turnover during the pandemic.
Although you can’t control every reason that drives employees to leave voluntarily or involuntarily, there are steps you can take to make your organization one that makes its employees want to stay and prevent you from spending the thousands of dollars and hours of lost productivity it costs for each new hire. SHRM estimates that the average cost for hiring a single new employee is $4,129 and it takes more than 40 days on average to fill an open position.
And that’s just the average. Experts predict that up to 20% of employees at the executive level may leave their jobs in 2021. Imagine the additional time and money needed to replace high-level employees.
Lots of experts will tell you to start by making sure you’re offering healthy, competitive wages and benefits. There’s so much more to reducing turnover and retaining employees than that. You might not be able to hold on to everyone. But these five tips can help boost retention, slowing the revolving door and strengthening your company.
Start at the Beginning: Hire the Right People
Sounds obvious, right? The 2021 Talent Trends Report from Randstad Sourceright reveals that 40% of leaders are struggling to find the talent they need, even with millions of people looking to get back into the workforce. A few months later, a March survey from the National Federation of Independent Business revealed that 42% of businesses had jobs they couldn't fill, with 91% of those businesses finding few-to-no qualified applicants for the open positions.
Lack of skills and a struggle to find qualified candidates can leave business leaders scrambling. But even if there’s a flood of applications coming in, waiting to choose the right candidate is essential, especially if you’re looking to reduce turnover. When you hire well, your employees will grow with your business. They’ll be invested in good outcomes and motivated to keep things moving in a positive direction. Make sure you’re clear about what the job entails and ask strategic questions to get a good feel for who the person is and how their skills will mesh with the rest of the team before making a job offer.
Set New Hires Up for Success
Set the tone right out of the gate with an onboarding and training process that provides a window through which new hires can see exactly how they can thrive at their new company. Go through the process to ensure that it teaches new hires about their jobs as well as the culture of the organization. Have a robust coaching or mentorship program in place to help guide them through the beginning steps, providing support as needed. Leaving a positive impression and providing the tools for success from the start creates an environment that nurtures employees and makes them want to stay.
Create a Dynamic Culture
Some experts contend that culture is the defining feature that can create a workplace that’s irresistible. That keeps everyone feeling happy, satisfied, fulfilled and content to stay put. In fact, if you ask those devoted to reducing turnover, you'll likely hear that culture is one of the top factors in worker retention. In a place that's amazing to work, employees will be more engaged. And engaged employees are 59% less likely to be shopping for a new job within the next year.
Prioritize the employee experience. Build every part of that from leadership to environment to operations with the goal of empowering employees and aligning the business's practices with its core values. Make sure you communicate the organization’s vision and create an inclusive atmosphere that fosters loyalty.
Provide Opportunities for Learning and Advancement
Employees need to feel like they're valued. That they play an important role in contributing to the success of the organization. When you promote from within and provide opportunities for development and continuing education, it reinforces how your company views its employees. In turn, it also empowers employees and makes them feel more invested in the company.
Stay Flexible
Today’s employees demand flexibility, particularly in the aftermath of the pandemic. As employers start bringing people back to the office, most workers want to keep working remotely for at least part of the time. A recent survey showed that one in three people who work from home right now will look for another job if they have to go back to the office on a full-time basis. But when you include flexibility into your culture, it's easier to meet those types of needs. It's also easier to support your employees in maintaining a healthy, happy work-life balance.