How to reduce employee turnover in an age of workplace exodus is a question that many HR managers and business leaders are asking right now. Turnover rates are soaring, and companies across most industries are scrambling to find a way to stop the bleed.
According to Gallup’s latest findings, the cost of replacing an individual employee is anywhere from one-half to two times their annual salary. Considering the high cost of hiring, there’s high value in retention.
In this article, we’ll explore the root causes of turnover exodus and how we can take action to stop this trend. We’ll also discuss what makes a productive workplace and how to build it from ground zero.
Let’s do this!
Why Are People Leaving Their Jobs?
Some teams face struggles keeping their structure intact.
If your company is struggling to retain its employees, an HR manager's top priority should be to identify why this is happening—and taking the temp on the work culture is a good place to start.
Are people generally happy and satisfied, or aren’t they? Are there sources of toxic workplace dynamics? What’s causing them? Perhaps the company values need to be reinforced in the culture with different initiatives.
As you can see, there’s a lot of recon work involved in getting to the bone of the issue. But where there’s a will, there’s a way!
The most effective way to identify the causes of poor retention is to conduct interviews with staff that’s about to exit the company. At the same time, it can also be tremendously valuable to do regular surveys that gauge employee satisfaction.
These combined efforts will give you a comprehensive approach to understanding the distinct nature of turnover at your organization.
Common Factors
Every company has its own unique challenges, but there are some factors that are common to stumble upon:
Lack of career opportunities
Undervalued employees
Underpaid employees
Lack of work-life balance
Lack of a strong work culture
Lack of flexibility
The Price of Turnover
The latest indicators from Gallup show that 50% of employees in the US alone are open to leaving their jobs. One of the main reasons is a lack of engagement and workplace culture (41%), followed by a lack of wellbeing and work-life balance (28%). These two areas of dissatisfaction make up 69% of why employees chose to leave their jobs in 2023.
In other words, it’s not all about the paycheck. In fact, it has very little to do with it, if you look at the data, and much more to do with the quality of work and the environment we work in.
When it comes to the numbers, the Society for Human Resource Management has calculated that companies will have to pay an average of $4,700 per new replacement hire. In a company with 10.000+ employees and high annual turnover. And that’s a lot.
But don’t worry – help is on the way!
There are ways to reduce employee turnover by decoding retention. Let’s talk about that for a moment!
Decoding Retention
Building a solid workforce is a skill – perhaps even an art. And retention starts with successful hiring.
Turnover is inevitable, but you can significantly reduce the risk of a worker leaving by hiring the right people for the right roles. It’s like a puzzle – every piece needs to be exactly where it belongs.
Does your company use retention strategies? Do they work? To know if they do, you need to look at how high the turnover rate is – and what it’s doing to the team’s time and productivity. If you’re stuck in a constant cycle of training and rehiring, it might be time to tweak that strategy.
Focusing on Engagement
According to Forbes, the most successful retention strategies rely on building employee engagement. Disengaged workers have low morale that is contagious, and they’re often less productive. Gallup has data to back this up. Their studies have found that feeling cared for is an essential driver for engagement – and when employees feel engaged, they’re ready to give their best to the organization!
To retain talent, we need to focus on engagement as the main catalyzer for our strategy in reducing employee turnover.
4 Strategies to Reduce Employee Turnover
Multiple factors cause employees to drift from their companies, from a lack of growth opportunities to absenteeism, burnout, and other workplace issues. Tackling the challenge of turnover requires strategies that target the root causes head-on.
Here are some excellent strategies to reduce employee absenteeism and enhance retention in 2024.
1. Professional Growth Opportunities
Just like any other organism on the planet, we need fuel to grow. And we’re not just talking about food here. Or maybe we are, but a different kind: food for the mind and spirit.
If the company can’t offer professional development, then your employees aren’t likely to stay very long. So make sure to invest in learning within the organization, whether through workshops, online courses, or other avenues for skill development.
2. A Great Recognition Program
According to a new study by Gallup and Workhuman, employee recognition can help reduce millions of dollars in lost productivity caused by turnover. Create a corporate culture that elevates individual and collective success!
Celebrate exceptional team members with bonuses, extra vacation days, flexible hours, or a gift card at the next staff meeting.
Want to learn more? Access a 6-step blueprint to crafting an employee recognition program as unique as your team.
3. Flexible Work
To build a workforce for the future, managers need to take a more human-centered approach to work. According to Upwork’s “Future of Workforce Pulse Report,” more than 36 million Americans will be hybrid workers in 2025 – an increase of almost 90% since before the pandemic.
More companies are moving towards a hybrid work model. With modern tech, it’s now possible to work from home in a productive way. It also contributes to a positive work-life balance.
4. Open Communication
One major reason for employees quitting their jobs is simple: employers just never saw it coming.
According to Gallup's data, 52% of quitters reported that their managers could have done something to prevent them from quitting. And only a third said they’d had a talk with management about wanting to leave before they actually did.
This means there’s a window in which managers can act fast to prevent turnover. By establishing open channels for candid feedback, and having frequent talks with the team, you can deal with disengagement before it’s too late.
The Bottom Line
Employee retention is important for the success of any business.
Cultivating a workplace culture grounded in support and recognition makes employees feel valued and appreciated. This fosters a stronger commitment to the organization and contributes to overall success.
Let’s strive to create a culture where everyone can thrive!
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