The 7 Keys to Reduce Employee Turnover According to 7 Famous Leaders
Retention. Attrition. Turnover. These words ring loud in the ears of business leaders. While all turnover may not be preventable, there are strategies that management can use to reduce the number and frequency of workers who join the ‘dearly departed’.
Let’s take a look at the words of seven leaders legendary for their ability to create strong, loyal and cohesive teams, and consider what their words really mean. On the face of it, what these people say may seem like fancy platitudes, but we can learn a lot if we really think about it. And there’s a lot of research that backs up what may seem like simple conventional wisdom: Employee retention is key to a more productive, dynamic workplace and in the end, it saves you money.
1. Hire the right cultural fit
“Get the right people on the bus and the wrong people off the bus”
⏤ Jim Collins
According to Mark Murphy, an author and expert on hiring, almost half of new employees fail within 18 months of being hired, and 86 percent of those who leave do so because they are not a good cultural fit for the company. Conversely, a 2005 study by the University of Iowa revealed that employees who fit well with a company and its people have greater job satisfaction, higher job performance, and are more likely to stick around. Hiring individuals who are a cultural match for your company means that everyone from hiring managers and interviewers to coworkers need to understand, exemplify and have the ability to articulate the characteristics that make up the culture of your organization. This is a proven strategy for reducing turnover.
2. Offer competitive benefits and compensation
“I don’t pay good wages because I have a lot of money; I have a lot of money because I pay good wages.”
⏤ Robert Bosch
The one thing that most profoundly affects a worker’s life is a fair and generous employee benefits package. CBS News reported that 80 percent of employees at Accenture, the renowned professional services firm, say the ability to manage work-life balance deeply influences their career choices and desire to stay with the company. There are many ways to provide a competitive benefits package, including medical insurance, flexible spending accounts (FSAs), 401(k) and retirement savings plans, vacation time and additional paid time off such as sabbaticals, maternity and paternity leave, telecommuting and job sharing. But the most important factor is to ensure that pay is commensurate with prevailing wages in your industry and geographic location.
3. Foster a supportive workplace
“A good manager is a man who isn’t worried about his own career but rather the careers of those who work for him.”
⏤ H.S.M. Burns
A Gallup survey on reducing employee turnover found that a supportive work environment where managers take a personal interest in employee satisfaction is a critical factor in lowering churn. When employees experience work overload, insufficient rewards relative to demand, and conflicting values, these are major causes for a breakdown in the sense of support and community in an organization. Policies are too often handed down from the top with very little discussion, and action is taken that belies the stated values of a company. No company or organization is perfect, but an open and honest effort to solicit opinions of employees, respect their ideas, and act upon their concerns when possible is a powerful way to fire up enthusiasm and retain people.
4. Recognize and reward
“The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.”
⏤ Theodore Roosevelt
In too many companies recognition and financial reward are synonymous. For example, when a worker does something well, they receive a gift card or paid day off. The truth is, while these types of recognition and rewards are laudable, when overdone they can easily be counterproductive because they tell an employee that their worth can be measured in dollars. While money is an appropriate part of the mix, managers need to remember that employees crave positive feedback, acknowledgment from colleagues that they’ve done a job well. Workers should be recognized for results and behaviors that exemplify the core values of the company, and this type of recognition is best when implemented peer to peer as top-down rewards and reinforcement efforts are often viewed as politically motivated.
5. Improve employee engagement
“If you can hire people whose passion intersects with the job, they won’t require any supervision at all. They will manage themselves better than anyone could ever manage them. Their fire comes from within, not from without. Their motivation is internal, not external.”
⏤ Stephen Covey
A 2014 Human Capital Trends survey by Deloitte showed that 55 percent of firms list retaining and engaging employees as the second biggest challenge they face, just behind leadership development. Employees who are engaged are more productive, happier and more apt to be loyal to the company. But what do we mean by employee engagement? An employee who is engaged is one who is enthusiastic about the work they do, and cares about the future success of the company. There is widespread agreement that engagement results in workers who are cognitively and emotionally connected to their workplace, which is most easily achieved when management conveys clear goals and and provides ways for people to contribute and be recognized for their contributions.
6. Develop employee skills and potential
“Development can help great people be even better–but if I had a dollar to spend, I’d spend 70 cents getting the right person in the door.”
⏤ Paul Russell
According to a report by BlessingWhite published in HR magazine, employees these days increasingly struggle to find opportunities for personal development at work, not just classic career advancement options. Workers who believe their company encourages career and personal development feel more confidence about their long-term prospects both in terms of their job prospects and their personal satisfaction. Unfortunately, companies do not always have the right tools and skills to promote employee development. This can be avoided through structured career and work-life mapping, leadership development, succession planning that preps existing employees for higher-level jobs, and other learning programs that emphasize both professional and personal enrichment.
7. Evaluate and measure results
“Executives owe it to the organization and to their fellow workers not to tolerate nonperforming individuals in important jobs.”
⏤ Peter Drucker
This is a big deal. Performance management and evaluation should be a dialog that starts with a clear and concise set of goals and objectives for each employee. While employee appraisals need not be painful, it must be understood what is expected in order for a worker to remain a part of an organization. This is often reflective of the values of a company, as well, since employees perceive that colleagues who are allowed to remain despite poor performance are indicative of political favoritism or a desire on the part of management to push extra work onto the shoulders of performers. Identify and convey your key performance indicators (KPIs), which serve as the drivers for both profit and retention, and ensure that they are consistently applied across your organization.