High employee turnover is, as ever, a pressing concern for HR executives globally. When an employee decides to leave, the department is forced to readjust. A replacement needs to be hired and trained and there is an inevitable loss of productivity as the employee gets up to speed.
On top of this, rehiring places a significant financial strain on a company that is best avoided. In Canada, it has been estimated that these costs can add up to around 40% of the employee’s salary, with an average cost of $18,000. In America, a study carried out by the Center for American Progress concluded that recruitment costs can range from anywhere between 16% for unsalaried employees to a staggering 213% for a highly trained position. In the UK, an Oxford Economics study shows that the cost of rehiring is, on average, £30,614 per employee.
If your company is experiencing less than desirable levels of turnover, you need to begin to ask yourself some pertinent questions. What is it about your organization, and the way it is being run, that is putting off talented employees? How can you select and hire the employees that best suit your company? How can you keep your employees content and engaged so as to avoid the laborious and exhausting recruitment process?
Check out the list below to see if you are inadvertently the cause of your own problems and how they can be avoided.
You’ve developed a reputation for not offering career advancement
If your recruitment team has done their job properly, they will have selected eager, ambitious and hard-working employees. These determined types require mental stimulation, challenges, and the potential of advancement. If your organization is not adequately providing scope for growth and development, it is highly unlikely that such a promising candidate will remain with you for long; they will grow bored and pursue opportunities elsewhere, and you might even be losing out to a competitor.
According to a Harvard Business Review study, the number one reason for high-performing employees leaving their position was a lack of career development. A growing number of millennials are job hopping, with the average worker remaining with their company for 4.4 years. If they don’t find what they’re looking for with your company, they will have no trouble looking elsewhere.
Make advancement and progression a top priority for your organization. Collaborate with your employees and create Personal Development Plans (PDPs). This will give you an indication of where the employee believes his or her strengths lie and how weaknesses could be improved. This ultimately means that you have an asset in the form of a highly skilled and motivated employee, and the employee is confident with the fact that you are taking their future with your company seriously. These PDPs can be efficiently tracked and monitored using performance management software, so staff in the HR department are kept up to date.
You are giving ineffective (or no) feedback
Nothing turns away promising employees quicker than a bad boss who is incapable of giving valuable feedback. Performance management systems have been seeing an overhaul in recent years, and there is a growing trend and acceptance of a concept known as ‘continuous performance management’. Huge players including Adobe, Cargill, Deloitte and IBM have made the switch after concluding that the adherence to solitary once-a-year reviews was not helping performance or productivity.
Instead, more regular meetings are required, where managers and employees can exchange useful information and feedback. This demonstrates to the employee that the company is invested in their performance and that you are available to help should the employee require assistance. Let your employees know that they can schedule meetings whenever they need.
You don’t prioritize flexibility
Don’t underestimate the value of flexibility to your employees. Developing a reputation as a flexible business that values a good work/life balance will not only help towards minimizing turnover, but it will also lead to a great reputation that will facilitate recruitment in the long term.
Don’t strictly adhere to rigid work hours at all costs. Be open to each individual’s needs. If they have children, they might need to be called away on an emergency, or want to attend a performance or recital. One employee might want to work earlier or later, so flexitime might be warranted. Alternatively, if an employee poses the possibility of telecommuting, consider the realities and benefits of the situation instead of just disregarding the idea immediately. It has been noted that employees actually prefer flexible working to an increase in pay, so seriously question whether your insistence on an old-fashioned work structure is worth the cost of a good employee.
You don’t appreciate your employees’ hard work
No employee works for money alone, and monetary compensation is not enough of a reward. In fact, 43% of employees, according to one source, would feel more motivated by being treated well than they would by a pay rise. This really isn’t much to ask, and when it comes to reward and recognition, a little can go a long way. Get to know your employees to find out what they would appreciate. It might come in the form of a dinner voucher, a bouquet of flowers, or even a heartfelt “thank you”. Let your employees know that they are appreciated, or they will likely go where their talents will be.
You don’t collaborate and communicate clear SMART goals
Your employees can’t be engaged with their workforce if they don’t know what the true purpose of their role is or what their immediate and long-term goals are. They need a sense of purpose and to feel like a part of something greater than themselves — Brian Tracy describes this as the “dependency need”. In this respect, employees need to know not only their own goals, but how their goals align with overall company objectives.
Goal setting is a process that you and your employees should collaborate on. If they have a say in their objectives, then they feel like they have more control and autonomy, which can be a great motivator. Make sure your goals are SMART (Specific, Measurable, Attainable, Relevant and Time-bound), and keep on top of these goals using performance management tools, which offer a high degree of visibility for everyone involved. If you don’t prioritize this area, your employees will lose faith in the direction of the company, and it is highly likely that they will pursue other options.
About the Author:
Stuart Hearn heads up Clear Review, a company that designs innovative performance management software. He has been working in the HR sector for over 20 years, previously working for Sony Music Publishing and co-founding PlusHR.
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