19 Strategies to Reduce Employee Turnover
Employees can leave companies for a variety of reasons, including those relating to how the organization is run and for other personal reasons. To avoid excessive amounts of your time and budget going toward hiring, you want to retain employees for as long as possible.
This means that you want a low turnover rate. If you feel your employee retention rate is too low, you must look at ways to reduce employee turnover, therefore, increasing retention rate.
In this article, we’ll look at 19 strategies that will increase employee satisfaction and engagement, ultimately leading to a lower turnover rate.
What is Employee Turnover?
Employee turnover relates to the number of employees that leave a company over a period of time. The rate includes both employees you replaced and those you didn’t.
It also includes every employee that left the organization, including:
Employees that don’t go to another company, such as those that retire.
Employees that move to a similar role at another company.
Employees that change career paths.
Employees that you fire or lay off.
While some turnover is inevitable, you should aim for a turnover rate of under 10%, which equates to a retention rate of over 90%.
You ideally want an annual turnover rate of under 10%.
How to Reduce Employee Turnover
If your retention rate is below 90% and you’re wondering how to prevent employee turnover, these 19 strategies can help greatly in improving employee satisfaction and lowering your turnover rate.
1. Implement Successful Hiring Tactics
Retaining employees begins with selecting the right people in the first place! During the hiring process, consider culture fit and put as much weight on employee soft skills as hard skills. Be sure to ask a range of interview questions that give an in-depth look at how the employee functions in the workplace.
Additionally, discuss the candidate’s goals and ideal work environment to ensure you are a good match. Determining if their values align with the company values and mission is critical too.
Need some extra advice on what to ask during interviews? Take a look at our interview tips for interviewers.
2. Have a Strong Onboarding Strategy
Onboarding is another critical part of the hiring process that can help or harm employee retention levels. Some top ways to ensure your onboarding is a success include:
Training the employees who will be onboarding new staff.
Creating easy-to-access and understand guides on job processes.
Get and incorporate feedback on the process from those involved.
If you need some more suggestions, read our article on updating your onboarding process.
3. Make Use of Probation Periods
Most employers will give new employees a probation period, generally three to six months. During this period either of you can terminate the contract with minimal restrictions. While letting a newly hired employee go may seem counterintuitive to reducing turnover, it can be the best thing to do in the long term.
Of course, new employees will need some time to get up to speed with the way things are done and the company culture. However, you must assess culture fit, behavior, and performance from day one.
Get feedback from other employees on how they feel about the new hire too. If the rest of the team feels they aren't a good fit, those long-time employees could leave the company if you continue to employ the problem new candidate.
4. Provide Competitive Salaries
If you want to reduce employee turnover, you can’t ignore the effect salary has on retention rate. The starting salary you offer, plus raises throughout employment, affects turnover significantly. While you may like to think a great culture makes up for lower pay, the vast majority of employees look at their salary as a primary determinant of whether to stay with a company.
Salaries should be competitive and in line with what other companies in the industry are offering for the same type of position. Salaries must also keep up with inflation and cost of living increases.
5. Provide Competitive Benefits
Offering a good benefits package is important too. These benefits include a good health care plan and paid time off. Ideally, paid sick days will be offered to employees too.
Many companies are now also offering benefits such as in-office snacks, on-site gym memberships, paid time off for volunteering, or employee health and wellness budgets (a bonus that employees can spend on a fitness class, massage, or similar activity.) If you see other businesses in the industry offering these types of perks, it’s likely worth it that you do as well to both attract and retain top talent.
To reduce employee turnover, begin by implementing strong onboarding processes and offering competitive salaries.
6. Offer Employee Development Opportunities
Another must-do when looking at reducing employee turnover is providing employee development opportunities. Doing so involves helping employees grow their skills and experience, ideally to help them move up the career ladder.
Some of the best ways to improve employee development include:
Continuously helping employees achieve career goals.
Offering mentors and access to learning opportunities, like courses.
Allowing for cross-departmental collaboration.
7. Give Employees Flexibility
Employee flexibility, such as choosing where to work and hours to work, has become a popular topic over the last few years. With the pandemic showing that employees can work remotely and employees enjoying the benefits of doing so, providing workplace flexibility has become a significant factor in retaining employees.
When looking at where to offer flexibility, talk with your staff. Would the majority prefer to work in-office, from home, or a mix? Are they happy with the standard hours you set, for example, 9 to 5? Or would they rather have some flexibility to start their workday earlier or later?
Take the responses and then offer the desired flexibility where possible. Allowing for workplace flexibility will make you a more attractive employer when hiring too.
8. Hire Internally
A primary reason for employees leaving a company is because they are ready to move into a higher position but it’s not possible to do so at the organization they’re in. Therefore, when discussing how to reduce employee turnover rate, emphasizing internal hiring is critical.
Whenever you have an opening, always look at your current team first to see if anyone is a candidate for the position. Also, make it clear that a position is coming available and ask any employees interested to apply.
Employee development plays into this a lot as well. By knowing each employee’s goals, you can identify what roles in the organization they may be ready to move into in the future and train them in advance.
Need some advice on hiring internally? Check out these top tips on improving internal hiring methods.
9. Offer Feedback and Advice to Employees
While you may think that performance reviews intimidate employees or are a generally negative thing, the opposite is true. Not knowing if they’re performing well can cause stress to employees and even burnout. Performance reviews also allow you to understand what goals employees have and are a significant part of employee development initiatives.
Along with performing more in-depth reviews (once a month, once a quarter, etc.), offer feedback as you feel needed, without micromanaging. This feedback can be positive or constructive suggestions. If you offer negative feedback, always offer advice to help the employee improve. In implementing this tactic, employees will feel like they are an important part of the business and can learn and grow, all of which help with staff retention.
10. Request Feedback from Employees Frequently
The review process must go both ways to keep employees satisfied and working for you. There are various ways to request employee feedback about management and how the business is operating.
Some of these methods include asking for feedback during employee performance reviews, having a way for staff to leave anonymous feedback, and making it clear that you have an open-door policy and are open to suggestions.
If employees come to you with suggestions or concerns, make sure you address these issues. Hearing feedback and ignoring it is always worse than not asking for suggestions at all! If a problem can’t be resolved in the way an employee would like, always explain the reasoning behind this.
Offering feedback and requesting feedback from employees can help reduce conflict or job satisfaction issues.
11. Analyze Employee Turnover History
Some turnover is inevitable and has nothing to do with the company itself, for example, when employees retire, leave due to moving cities, or have to prioritize family commitments. But looking at reasons that do relate to the company is crucial in reducing your turnover rate.
You should have information about those that have left the company and a reason for doing so. When doing this, you’ll especially want to look at those that move to a similar role in a similar industry. This action suggests that the employee enjoys what they do, but something about your company made them make a move.
You’ll likely find similarities in employees leaving. For example, you may notice that they move to companies offering better salaries or benefits or more flexibility to employees, such as allowing them to work remotely. Keep these reasons in mind when managing your business and coming up with solutions for reducing turnover.
12. Include Employees in Decision Making
Being transparent and including employees in decisions that affect them is another way to reduce employee turnover. When discussing something relating to an employee's job and the tasks they perform, get their opinion always.
While you can start the conversation with higher-ups, discuss with all the employees that will be affected before making a decision. Suddenly being told that something about their job is getting changed and effectively having no say will isolate employees, cause resentment, and can ultimately result in them leaving the organization.
13. Initiate Team Building Activities
The tasks employees complete are just one part of the workplace experience. Who they work with and the relationships in that group are another significant part of the equation. In fact, many employees that love the tasks they work on will look for a new place of employment if they don’t get on with those they work with or don’t feel part of the group.
To avoid these team relationship issues occurring, team-building activities are a must. Team building activities can include:
Team lunches or happy hours
Quiz sessions
Volunteering events
Corporate retreats or day trips
Even if your team works from home, there are many remote team-building activities that you can incorporate. Promoting departmental and cross-departmental collaboration is another great way to boost employee relationships as well.
14. Keep on Top of Problem Employees
As mentioned, working with people that cause conflict among employees can result in turnover occurring. Therefore, keeping on top of problem employees is crucial to minimize turnover rates, even if it ends up meaning that the problem employee needs to be replaced.
“Problem employees” can include employees that aren’t performing as they should and those that cause conflicts due to their behavior. For the former, it can be easy to identify these employees based on work not being completed on time, work not being completed to an appropriate standard, or not meeting goals and KPIs.
The latter can be identified based on employee feedback. If there is an employee that other staff members mention to management or HR frequently, that individual's behavior must be addressed.
15. Monitor Employee Engagement and Signs of Burnout
Decreasing rates of employee engagement and burnout can often result in staff leaving a company. Therefore, picking up on signs of these issues in employees and remedying them is necessary.
Feedback sessions and analyzing employee productivity, performance, and overall morale can help pick up on employee motivation issues. As with asking for feedback, make it clear that if employees feel stressed, overwhelmed, or otherwise unsatisfied, they can talk to management about it, and a solution will be developed.
If you have remote teams, it’s crucial to implement strategies that reduce employee burnout when working from home, as it can be more challenging to pick up on cues of dissatisfaction when staff aren’t in the office.
Keeping an eye on problem employees and those at risk of burnout is crucial in reducing turnover.
16. Ensure Employees have Access to All Necessary Resources
If employees don’t have everything they need to do their job to the best of their ability, they can become frustrated, and performance may be affected. Over time, if requests for certain tools get declined without reason or an alternative tool provided, employees will stop enjoying their work and will move to other companies.
Therefore, a simple way to increase employee retention rates is to ensure you provide tools that will help make your staff’s jobs easier and more efficient.
17. Fix Understaffing Issues
Understaffing is a problem at many companies, especially at small businesses. It refers to not having enough employees to complete all the required work.
In this case, the additional workload often gets placed on current employees to a point where they can’t do their original job or can’t do it to the best of their ability. In companies with understaffing issues, employees can become resentful of management and suffer from burnout.
To reduce employee turnover, always look at the total workload in the organization and assess if you really have enough team members. Talking to staff can help determine if you need some new hires too. If you are understaffed, invest in additional employees, or you’ll likely see your current team leave and have consistently high turnover rates.
18. Reward and Recognize Hard Work
A common problem with high achieving employees, especially in smaller businesses, is that they often get “rewarded” with more work instead of recognition. Therefore, you must reward those that meet and exceed targets. These rewards can include bonuses and or a raise. Promotions should also be considered for those that consistently meet or exceed targets, especially if other employees aren’t doing so.
Favoritism without reason is never a good thing. But exceptional performance should always be rewarded. In addition, seeing others that don't perform as well getting paid the same and/or not getting feedback for their lower productivity will cause high achievers to become demotivated. In this situation, you'll likely lose your best staff to a company that values and appropriately compensates their expertise.
19. Emphasize the Importance of Work-Life Balance
Companies that put the needs of the business in front of employee well-being are still prevalent, but this mindset is changing quickly, and employees are no longer putting up with it. Prioritizing employees taking time for themselves, ending their workday when they should, and not doing work in their time off is a must to reduce burnout and turnover rates.
A great starting point is making it clear that any emails sent to them during time off are to be dealt with once back on the clock, minimizing overtime requests, and not getting in touch with employees during any time off, whether during or after regular business hours.
Companies leading the way in prioritizing employee well-being are even offering incentives for employees to do hobbies or activities they enjoy in their free time. An example of this is by allowing them to leave early once a week or month to have extra free time or offering a bonus for pursuing a hobby.
To discover even more methods for ensuring your staff is productive and satisfied, check out these 21 ways to keep employees motivated and engaged!
In Conclusion
After reading this article, you should have a better understanding of how to reduce employee turnover. With just a few simple changes to how your organization is run, you can effectively increase employee retention rate, therefore, cutting your turnover rate drastically.