According to the Society for Human Resource Management, the average company experiences turnover at an annual rate of 19%, which can cost each company 20-40% of an employee’s salary in pursuit and training of their replacement. That’s a costly hit. So how can companies diminish employee turnover to increase efficiency, cost-effectiveness, and general office morale? It may help to model other successful organizations. Here are 5 tools that successful, elite, retention-focused companies put into play:
Hiring Wisely
The work you put into keeping your employees on staff starts before they even cash their first paycheck. Hiring managers, of course, have to find the right fit for the job description as well as for the culture. Work isn’t just about productivity; it’s about relationships, collaboration, and real-time problem-solving. If your new hire doesn’t mesh well with other team members or the company’s overall vision and values, their departure or termination is almost inevitable.
Take a Cue from Zappos
In 2016, Zappos’ highly targeted recruitment methods brought the company to its lowest turnover rate since its creation nearly 20 years prior. Zappos has begun using modern technology to ramp up its recruitment efforts. Using their website and social media platforms to engage potential employees and share information about their company culture, Zappos is able to prequalify candidates as potential fits into the company. Online, they offer employee testimonial videos, a Culture Blog, and photo galleries demonstrating their achievements and culture in action. Plus, their presence on Pinterest, Instagram, and YouTube is clearly targeting particular hires, indicating the highly specific nature of their recruitment efforts.
Compensating Competitively
Hiring managers can also help solve high employee turnover by offering unique benefits and competitive pay. With culture and engagement at the top of employers’ minds these days, businesses can no longer get away with underwhelming salaries or perks. Job-seekers have options and they’ll rightfully expect their skills, talents, and dedication to be met with proper reward.
Get to know what your top competitors are offering, do your market research on fair wages and incentives, and offer benefits that your employees actually want. Better yet, offer benefits that will help them maintain a well-balanced life so they not only stay productive but also happy and engaged at work.
Take a Cue from NuStar Energy
NuStar Energy is among the largest independent pipeline operators in the United States and they maintain that status by offering their employees stellar benefits. Making it as high as 19 on Fortune’s Best Companies to Work For list according to Timeinc.net, NuStar offers its employees 100% healthcare coverage, company-wide bonuses (not just reserved for executives), and rich retirement benefits. The company also holds recognition parties for exemplary employees, who are given gifts and praise for a job well done. With premium benefits and a clear reward system, it’s clear NuStar cares about its human capital.
Connecting and Empathizing
Managers who put in one-on-one face time with their employees can significantly reduce turnover if they take the right approach. These one-on-one meetings aren’t meant for progress reports or to overwhelm your staff with more work. Instead, managers should take the approach of listening empathetically to their employees to find out what their goals are, what they’re struggling with, and how upper management can help. Leading people involves understanding the complexities of individuals, including their emotions, stresses, and overall needs. Connection and empathizing can be especially important when employees are experiencing workplace conflicts. Without such a system of support, you’ll see negative impacts on productivity, morale, and your bottom line.
Take a Cue from EY & CollegeWise
EY (formerly Ernst & Young) understands the importance of employee mental health, which is one of the biggest benefits of connecting and empathizing with your team. The firm launched its “r u ok?” program which helps employees with addiction and other mental health issues, demonstrating EY’s culture of caring. This also emphasizes EY’s overall understanding that the emotional well-being of its team members is paramount. Such practices have helped EY make the “Best Places to Work” Top 25 list for the last several years, according to EY.com’s Facts and Figures.
CollegeWise, a global college admissions agency, reports a near 0% turnover rate for the past 4 years. They attribute this to their leader-coach management style, in which all managers are positioned to be coaches for their direct reports. Managers meet regularly with individuals to have private listening sessions, where managers are encouraged to simply listen and empathize. They call it the “empathize and learn” model. As a result, the company scores in the 99th percentile of Gallup’s engagement surveys.
Avoiding Urges to Micromanage
From weekly schedules to daily tasks and everything in between, if we’ve learned anything through management and leadership research, it’s that employees want to be trusted and given autonomy. Don’t measure your employee’s effectiveness by how neatly they punch in a clock but rather how much they’re actually contributing, regardless of their style. Show your employees that you trust their ability to be innovative and take ownership of their responsibilities without constant oversight.
Take a Cue from Ramsey Solutions
Ramsey Solutions is a financial company with more than 800 employees and boasts one of the lowest turnover rates of any company its size. The company has also been ranked among the Best Places to Work in Nashville 10 times, according to Inc.com. The company, run by Dave Ramsey, encourages the development of each individual on their team. This doesn’t just include development related to job performance but also includes growth opportunities that will make their employees more whole and well-rounded. They place a large emphasis on supporting individuals’ growth toward goals they autonomously set. There’s no time or need for micromanaging, and employees are encouraged to foster a sense of independence.
Fostering Career Development
Over time, even if they’re the perfect fit, many employees may still depart for greener pastures if they feel they’ve reached a dead end at the company. Becoming static in one job for too long will send anyone to Indeed for a late-night browse to see what else is out there. Make sure you’re letting your employees know where they’re valued skills can take them within the company. And don’t forget to actually foster their growth. A clear path toward advancement, whether by title, duty, or compensation, will help attract and retain better talent.
Take a Cue from Hyatt
Tinypulse.com reports that a Hyatt housekeeping employee stays with the company, on average, for more than 12 years. One of the reasons for this is that Hyatt promotes from within, identifying and supporting the employees who demonstrate leadership potential. The company offers training opportunities to help employees hone their leadership skills, which includes encouraging and incentivizing them to be creative problem-solvers. According to Fortune’s 2019 list of 100 Best Companies to Work for, Hyatt’s strategies are working, placing the company at a rank of 32.
While maintaining 100% retention rates at all times will be impossible, there are many investments of time, energy, and money a company can make that can help lower the costly impacts of high employee turnover and keep your business moving consistently in the right direction. Model the tools and techniques of companies with low turnover and high engagement, such as those listed above, and you’ll be on the right track.
BIO
Jeremy Pollack, founder of Pollack Peacebuilding, is an anthropologist and conflict resolution consultant in Silicon Valley, San Francisco, and Los Angeles. He is also a research fellow at the Stanford Center for International Conflict & Negotiation.
