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Employees are the backbone of any successful company. Replacing an employee can be a painful experience, especially for small businesses and entrepreneurs with small teams. Employee turnover can lead to the loss of valuable knowledge and expertise, damage customer relationships and cost thousands of dollars to find and train a replacement. The cost of hiring and training a single mid-level manager is nearly $30,000. Every year, employee turnover costs American companies about $1 trillion. Here are some ways companies can reduce employee turnover and improve employee retention.
1. Start with fees and benefits
Employees expect to be paid well for the work they do. Companies that cannot remain competitive will struggle to retain their top talent. While wages and bonuses are important factors in compensation, companies should also explore ways to improve other forms of compensation, such as health insurance, life insurance, vacation policies and 401,000 contributions. Even non-monetary benefits, such as having an on-site gym or free time for volunteer activities, can increase employee satisfaction and retention.
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2. Employee recognition and praise
Employees want to be recognized for their contributions. Entrepreneurs should take the time to reward and recognize the members of their team who are doing their best. Different forms of recognition are effective, from sending a personal note thanking them for their work on a special project or giving them a gift certificate for helping out another department. Public praise can also be effective, such as presenting awards at a company meeting.
3. Provide career development opportunities
Career advancement is a critical part of employee retention. Employees who consistently feel challenged are more likely to stay with a company. Find ways to give your top performers stretches and promotions. Training such as educational courses and mentorship programs can provide an opportunity to enhance your existing workforce and prepare them for their next opportunity.
Related: Here’s How You Can Boost Employee Retention With Lifelong Learning
4. Provide the right resources and tools
Employers are responsible for ensuring that their employees have everything they need to be successful in their jobs. Cutting back on these resources can leave employees feeling undervalued, burnt out, and frustrated. Resources come in many forms, from hiring the right number of employees to support work to updating technology and improving processes.
5. Promote a healthy work-life balance
Work-life balance is extremely important to most employees and can affect turnover. According to the Pew Research Center, 45% of employees left their jobs because of insufficient flexibility in their work schedule, and 39% left because they worked too many hours. Providing employees with the ability to balance work and private life reduces stress and allows them to solve personal problems that would otherwise distract them from their work.
Companies can help support a healthier work-life balance by allowing employees to work remotely (full-time or part-time), create flexible work schedules, and have more time available for sick or personal time.
Related article: How to restore work-life balance
6. Hire the right people the first time
While this may seem logical, this is easier said than done. Rapid changes in the economy and workforce can leave companies desperate to fill open positions. It can be tempting to just hire a half-qualified candidate. Unfortunately, this can increase sales for both new and existing employees. New employees can leave quickly if they can’t keep up with the demands of the job. Existing employees can also get burnt out from training new employees over and over again.
Instead, try to find the best possible candidate for your open position. Being clear about expectations up front can also reduce the number of employees who accept the position only to quit soon after because the job wasn’t what they expected it to be.
Related article: How entrepreneurs can find great talent despite a labor shortage
7. Get feedback from your team
Employees leave companies for a variety of reasons. One of the best ways to reduce turnover is to get feedback directly from employees about how they feel about working for the company. Too many companies collect this kind of information in exit interviews. Unfortunately, this does not help because the employee has already chosen to leave. Instead, conduct residency interviews with top performers to find out what keeps them from seeking new opportunities outside the company. Anonymous employee satisfaction surveys can also provide a wealth of information to help business owners make retention decisions.