Employee turnover is costly. Learn how to stop and prevent it at your company with these important employee retention strategies.
People are quitting their jobs in record numbers this year. In April 2021, the United States Bureau of Labor Statistics recorded the highest level and rate of people quitting since the agency began tracking this figure in 2000. That month, 4 million people voluntarily left their jobs, bringing the quit rate to 2.7 percent.
These numbers did come down a bit in May — to 3.6 million and 2.5% — but they are still very high.
Employee turnover is expensive, and employers are being left with the bill. According to a Zenefits survey of more than 600 U.S.-based small businesses, 81% of business owners agree that employee turnover is a costly problem. Some costs they identified were:
- Delays in customer projects and services
- Loss of productivity
- Cost of hiring and onboarding a replacement employee
- The stress the resignation creates on the rest of the team
- Legal or HR issues associated with the departure
If you’re experiencing high turnover right now, or want to prevent it from happening at your company, here are some strategies.
Why do top talents leave their job?
We see it time and time again. Leaders of companies with high turnover like to blame their employees’ attitudes for their high quit rates. You might hear these managers complaining of “the millennial syndrome” and insist that their young workers have unreasonable expectations and there’s nothing the manager can do about it. They assume that employee attrition is out of their control.
The problem with this attitude is that it deflects responsibility away from the person whose job it is to run the company. It’s also incorrect.
Research from Gallup shows that the primary reasons workers give for quitting their jobs are things that the manager can control. Here are the most common answers given by survey respondents.
- Career advancement or promotional opportunities (32%)
- Pay/benefits (22%)
- Lack of fit to job (20%)
- Management or the general work environment (17%)
- Flexibility/scheduling (8%)
- Job security (2%)
Still think there’s nothing you can do about these things? Think again. More than half of Gallup’s respondents said that their manager had a chance to stop them from leaving.
In fact, Gallup found that the number one predictor of employee turnover is a poor relationship with the immediate manager. If workers say that their supervisor’s expectations are unclear, they have no opportunities for advancement, or their supervisor creates a “toxic” work environment, that’s a big sign that resignations are coming.
How do you retain top employees?
Now that we know what is causing high employee turnover, let’s look at what we can do about it. Here are some strategies you can try today.
Employee retention strategies for 2021
1. Ask for and respond to employee feedback
If your employees are unhappy at work, they definitely have their reasons. And the easiest way for you to find out those reasons is by asking.
Most disengaged employees believe that nothing will change at work, regardless of what they propose. And when employers don’t respond to feedback, the employees assume that the organization has no interest in improving.
The good news is that employers can make their staff feel more engaged simply by asking for and acting on feedback. So ask your employees what they think about important projects, developments in your industry, and high-level executive decisions. Then let them know you were listening by taking action. You’ll create a culture where employees feel valued, and that’s not a place people want to leave.
Ask your employees what they think about important projects, developments in your industry, and high-level executive decisions. Then let them know you were listening by taking action.
2. Foster respect in the workplace
More than ever, people are looking for employers who treat them with respect. But what does that mean?
HR experts identify2 types of respect: owed respect and earned respect.
Owed respect refers to the basic civility that all people should expect, simply by virtue of the fact that they are part of your organization. If your organization has a lot of micromanagement, discrimination, rudeness, or abuse of power, you are probably low on owed respect.
Earned respect is the recognition that certain employees have special talents or qualities that distinguish them from their peers. When employees go above and beyond or demonstrate unique strengths, they deserve to be recognized for it. If your managers ever steal credit or fail to recognize employee achievements, that’s a sign that you need to boost your demonstrations of earned respect.
You can foster a culture of respect by paying attention to both owed and earned respect. Do not tolerate rudeness, discrimination, or incivility. Include all members of your team in important activities. And give credit where credit is due.
3. Hold employees accountable
When people perceive that their coworkers are not committed to doing quality work, their engagement is low. When they perceive that management is letting their coworkers get away with substandard work, employee engagement plummets even further.
You may think that you’re being “nice” by looking the other way when 1 or 2 of your staffers does substandard work. But what kind of message are you sending to the rest of your people? They are likely to think that their hard work doesn’t matter if their underperforming coworkers can skate by.
It’s important to address these issues when they come up. That’s your job as a manager. If you don’t, your top talent may decide they want to go somewhere where hard work is appreciated.
4. Practice what you preach
Take a look at your organization’s core values. Do you follow them? If not, it’s time to start now.
Your employees are more likely to feel engaged when you lead by example. Let them see you doing your job according to the values your company espouses, and they will feel more connected to your mission and the company as a whole.
5. Provide opportunities to grow
According to the Gallup survey cited above, nearly a third of people who quit their jobs identified career advancement and promotional opportunities as their reason. That means that if you want to keep your best people, you have to provide them with opportunities to grow their careers at your company.
If you want to keep your best people, you have to provide them with opportunities to grow their careers at your company.
Look for opportunities to promote from within. Offer continuing education and training in new skills. Connect younger employees with more seasoned mentors. Employees stay in companies where they can see a future for themselves.
6. Pay them what they’re worth
In 2014, Forbes raised eyebrows when they reported that workers who stay in their jobs for longer than 2 years will earn 50% less over their lifetimes than workers who change jobs frequently. This was due to the fact that employers were typically offering 1-3% annual pay raises to existing employees. But companies were offering much bigger boosts in pay to new hires.
In other words, employee turnover might be bad for companies, but it’s great for employees.
This has held true in more recent years as well. New research by Payscale shows that only 64% of U.S. employers gave pay increases in 2020, down from 82% in 2019. Many employers are not planning to give raises in 2021 either. And for those employers who are giving pay increases, most are maxing out at 3%.
This might not be all that surprising, given the hit businesses took from the pandemic. But consider this. Employee turnover comes with a much higher cost than a pay increase. So if you’re planning to freeze employee salaries this year, take another look at your budget. Can you really afford to not offer raises to your top talent this year?
The bottom line
Employee turnover is at an all time high, and it’s costing employers billions of dollars. But there are strategies you can use to turn this problem around. Try some of these ideas today!