BY CHRISTINA DAVIS
Turnover. The world itself can strike worry in the hearts of business owners, and the money and time involved in employee turnover make matters even worse. Consider the following:
• $11 billion is lost annually due to employee turnover (Bloomberg BNA)
• The industry with 2014’s highest turnover rate is hospitality at 20.2 percent (Compensation Force)
• Industries with the most disengaged employees include hospitality, government, and light manufacturing (Modern Survey)
• Each year, the average company loses 20 to 50 percent of its employee base (Bain & Company)
In order to put a dollar amount on turnover, we’ll use a hypothetical situation of a company with 100 employees and 15 percent turnover each year, which is lower than the average rate. Assume that training a new employee takes two weeks: If the new hire is being paid $12/hour and the trainer is being paid $25/hour, the company is spending $44,400 per year on the training process alone! And that figure doesn’t even cover the costs of recruiting, administration of onboarding new hires, and pre-departure and loss of productivity, not to mention the additional stress put on the remaining employees and a potential loss of customer service quality. All of this translates into diminished profit.
Here are a few ways to help lower your turnover rate:
Hire the right people. When you’re recruiting and interviewing candidates, be sure to look beyond their resume and pertinent experience, and take the time to really talk to them. Will they be a good fit for your culture? Will they understand and live out your vision and mission? Asking open-ended questions such as having them describe their favorite previous work environment or ideal manager are great ways to understand both the workplace and type of work best suited to the candidate. The last thing you want to do is hire someone who performs best in calm, reserved cultures if yours is one of elevated stress, competing priorities, and a high-energy staff.
Train both new hires and your current employees. According to a study conducted by BambooHR, 33 percent of 1,000 respondents had previously quit a job within the first six months of employment due to both a lack of guidelines regarding their responsibilities and an absence of training. Training and a clear career path promote job satisfaction for both new and seasoned employees. By investing more in your employees, they in turn become more engaged and involved, and start working toward the success of both themselves and your company.
Recognize and praise your employees. We’re human. We enjoy—and even flourish—when we’re recognized for our accomplishments. When an employee or group of employees accomplishes something significant, send a personal, individual email of praise or a company-wide recognition email. Written commendations not only show your team that you recognize their work, but also communicate to the entire company what your expectations are for growth. Recognition and praise are very cost-effective ways to help maintain a happy, productive workforce!
As much as possible, offer flexibility. A Boston College Center for Work & Family study found that 76 percent of managers and 80 percent of employees indicated that flexible work arrangements had positive effects on retention. More and more companies are offering workplace flexibility by implementing new plans, such as rotating weekend schedules that give all employees an opportunity to have a weekend off. Get creative and see what areas of your business you can be flexible in. Live your culture. Don’t just preach your mission and vision–live them! After all, if you don’t, why would your employees? A study from 2012 found that lack of respect in the workplace was a key factor in voluntary turnover. Creating the culture you want in your company starts with you, is carried out through management, and soon spreads to your entire team.
Reducing turnover will take time, planning, and training. Use your entire management team to discover what motivates your employees. You’d be surprised by how willing they will be to talk to you about what they like, don’t like, or would like to see not only in their positions but also in the company as a whole. Creating an open and positive working environment will only enhance your employees’ engagement—meaning they will work harder, be more efficient, and take pride in what they do—and ultimately foster a stronger sense of team. More productivity and happier employees mean fewer performance issues and higher profits. [CD0416]
Our friends at The LMC Group, the livery management consultants, will be exploring different monthly topics that are relevant to you, and we’d like to know what questions you’d like to see answered. Please email your questions for the HR Coach to info@liverymanagement.com, who will also provide additional guidance and information regarding this ongoing series.
Christina Davis is the HR Director for The LMC Group. She can be reached at christina@liverymanagement.com.