HR Data Solutions

Top 9 Reasons for High Employee Turnover and How to Fix It

The U.S. unemployment rates have been hitting some unexpected lows, putting pressure on employers to smarten up their retention policies. Unemployment fell to 3.6% in April 2019. That’s the lowest rate since December 1969. If you’ve got a high employee turnover rate you need to act.

Read on to learn 9 reasons for your high turnover rate and what to do about it.

Combatting Your High Turnover Rate

You know employee turnover costs you money. The recruitment costs alone are enough reason to act now to reduce turnover. Add to that the cost of training, poor performance, resolving recruitment mistakes and the reputational damage.

You’re looking for low turnover rates but your ambition should be “freakishly low” employee turnover. That’s the benchmark set by Patagonia. The holy grail as they see it is employee engagement.

Part of their strategy is to get continuous feedback from employees about how they feel and to do something about it when the mood drops. That’s a good place to start but they’ve got to be doing more. Take a good long hard look at your organization and ask if you are making these mistakes.

1. Lack of Career Opportunities

Employees who want a career are not likely to stay with you if they don’t see those opportunities with you. That much is obvious but what are the implications of this statement?

First of all, if you do have opportunities but you’re not letting people know about them. There are lots of good reasons why internal promotion is good for you. Don’t miss the opportunity to recruit from within.

You already know more about an internal recruit than you will ever know about an external one. For this reason, they can be less risky appointments. Internal recruits are also likely to know you better than external recruits so they have already engaged with you.

Second, if you don’t have career opportunities, you have to ask why you are recruiting people with ambitions to progress. There are plenty of people who are not looking to have a career and who are happy to stay with you for a steady job.

It’s important to recognize that you can have excellent, committed people who like their jobs. Don’t think you have to have hungry go-getting people in every job.

2. Burn Out Culture

Some organizations have cultures that are conducive to high employee turnover. If the culture of the organization values people doing long hours then it may not recognize that people need a work-life balance. Sometimes known as presenteeism, this is a culture where being present at work seems to be more respected than actual results.

Burning people out is going to result in high turnover. It’s not a sustainable strategy. Better to focus on job results or performance and encourage people to take breaks and have time off for family life and to return to work refreshed. Learn how we map your culture:

3. Relationship with Manager

Most people don’t leave the company. People leave their manager. In fact, 50% of employees say that the reason they left was their manager.

You can put a huge effort into the rewards package, engagement strategy and corporate fun days and all the while somebody is working to undermine you. Poor management can send your people home each day wishing that they didn’t have to face another day at work. One day they get another job.

Make sure your selection of managers prioritizes people skills. Train your managers and measure their performance as people managers. No matter how technically good they are if they have people responsibilities they have to be good people managers.

4. Poor Rewards

People leave you because the total reward package is wrong. Salary is part of this but it may not be the whole story. Sometimes the rewards that retain people are surprising.

Find out what motivates people to stay. If it’s a reward, what do people want? It may be that time is more valuable to some employees than money.

Some younger employees may value time off to travel with the reassurance that there will be a job waiting for them when they return. Some older employees who have fewer expenses may be earning a lot but be willing to exchange some of that for more vacation time.

Flexible working can be the main reason for staying with employers during certain life stages such as when childcare or eldercare is a priority. The relationship this establishes between employee and employer can be mutually positive. These employees can be some of the most committed you’ll ever have.

5. Low Confidence in Top Management

If the pilot of your airplane doesn’t inspire confidence it doesn’t matter how good the pretzels are. Top leaders in an organization have a responsibility to lead and be seen to lead effectively.

Top leaders must ensure communication from them reaches all employees in the organization. They need to communicate both what the organization is seeking to achieve and how it seeks to do it. Part of the “how” is what values they espouse.

It’s not enough to state the corporate values. Almost every corporation has a set of these worthy values but not all of them live up to them. Top management should be seen to live these values as well as recite them.

6. The Job Isn’t as Described

Interviewing prospective employees can sometimes feel like a sales activity. It’s tempting to sell the benefits without much attempt to balance them with a reality check. New employees then start work to discover that they’ve been under an illusion.

Be realistic about the duties and obligations. If the work is high pressured, say so. If customers can be difficult, say so and ask people if they are prepared to keep smiling through it all.

Better to lower expectations than to raise them falsely. Don’t promise rewards or opportunities that are unrealistic.

7. Poor Development Opportunities

Employees can leave employers because their reasonable expectations for training are not met. Even the most enthusiastic, committed people need training and support to do a new job well.

New employees can get disillusioned quickly if they are not given clear instructions and training. Some simple on the job training may be all that is needed.

8. You Higher Poor Performers

If you have poor recruitment policies and skills it’s likely that you will recruit the wrong people. Recruiting the wrong people either means they leave or you have to exit them. Either way, this is an unnecessary waste of effort and expense.

Apply some simple principles when recruiting. Firstly, recruit people with the right attitude. You can train people in the knowledge and skills they need more easily than instilling the right attitude.

Secondly, previous performance is the best indication you have of their likely future performance. Don’t be deceived by good interview technique or promises of results. Look for a track record of achievement.

9. Poor Cultural Fit

Some people just don’t fit into your organization. We call this cultural fit. If your organizational values are inconsistent with your new employees then they are unlikely to stay.

Be clear what your organization’s values are. That’s not what is written on the noticeboard but what they really are. Check people’s value at the recruitment stage and if they are not consistent then avoid them.

Get Help

If your employee turnover is concerning you perhaps you need help. A high turnover rate is not inevitable. Take advice and improve your employee retention.

Find out how to hire employees that fit.

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