20 ways to improve employee turnover and engagement!

Employee Turnover and Engagement

If you take care of your employees, they will take care of your customers who will take care of your customers

A positive and motivated staff is an asset to your organization and its success. Employee turnover and retention are now one of the major concerns of the organizations now. Individuals have the tendency to leave organizations once trained and after spending certain time with the organizations for better opportunities. Even though it is no hidden fact that people tend to leave organizations sooner or later, yet organizations need to invest in improving employee turnover.

Need of an hour!

Hiring, training, and retaining employees is not an easy process. People are as an asset are appreciating in nature and not a depreciating asset. Any organization would want the employees to stay with them longer.

The image below indicates lifecycle of an employee in an organization.

Cost to value of an employee

Time being an important aspect, more the time is spent in an organization, it reaps greater benefits. More time an employee stays with an organization, they become more valuable. Loyal employees build high-performance companies. Employees are the first customers who need to be served well enough to the customers.

The cost the employee turnover includes costs of hiring, onboarding cost, learning curve, and cost of emotional attachment. The cost of finding and replacing a new employee with an old employee is very expensive. Numerous studies suggest it even to be around 200% of the annual salary. This includes direct and indirect costs. Direct costs include replacement and transition costs. Indirect costs include cost incurred due to loss of production, employee morale, and reduced performance levels. These costs also include the impact of turnover during hiring and training of a new employee.

Employee turnover is defined as the number of employees leaving an organization and are replaced by new employees. It is essential to measure it if you want to understand the reasons and cost associated with hiring processes. Employee turnover is of various kinds: voluntary, involuntary, functional, and dysfunctional. This can be understood by the following graph:

Employee Turnover and Retension

Why do employees leave?

Before really moving towards how to retain employee and improve the employee turnover, it is vital to understand the high staff turnover reasons.

Some of the reasons are related to the life event. For example, someone got married and shifted with the spouse or went back to study further. But, most of the reasons are under the control of the employer. Most of the employers do not stay in touch with what their employees are thinking. Some of the reasons why your employee has left or may leave in the future are following:

  • Relationship with the direct manager The old wisdom says “People do not leave companies, they leave managers”. This is, in fact, true to some extent. The relationship between a manager and subordinate is a vital link between the employee and company. Managers are an integral part of an employee’s daily life. A toxic relationship can definitely undermine the confidence, engagement, motivation, and commitment of an employee towards the company.
  • Unchallenged work The absence of motivational and positive work environment makes 60 to 70% of the employees disengaged. It is the responsibility of the manager to make the environment and work positive and challenging for the employees. The absence of the work that challenges the employees intellectually and creatively, the daily routine becomes monotonous. A human being tends to move away from the daily routine. When intelligent and deserving employees start doing the mundane and boring tasks, they tend to leave the organization.
  • Lack of positive work environment Most of the businesses neglect the need and importance of the positive work environment. After a certain time, employees do not look forward to going to the work. The hard and busy days and lack of positive environment make the daily tasks more grueling and difficult.
  • Opportunities to widen the skill set Each individual looks for opportunities to widen their skill set. In the absence of these opportunities, they feel stuck. As a human tendency, they start searching for new opportunities or jobs where not only their skill sets are utilized but where they would receive new opportunities to learn and grow.
  • Contribution to the larger business goals In most of the cases, employees are not able to see the direct link of their profile with the larger business goals. Aligning employee is a crucial part where majority managers fail. An employee which is not aligned with the larger goals is disengaged with the company.
  • Independence and Flexibility Flexibility means different to different people. Every human being needs a certain balance in their life. Employees are happy and perform well if they are able to balance work and other aspects of the life. Failing to do so adds stress and negative spillover.
  • Organization’s financial stability Stability of organizations is important for its employee. The stability of employees depends on the stability. If an organization has layoffs or is making losses, employees do tend to move out.
  • Performance-based rewards and recognition There is no hidden fact that employees need recognition for their performances. When not appreciated, recognized or rewarded on merit they do tend to leave organizations. Most of the organizations underestimate the power of recognition. If raises are inadequate and recognition is rare then employees do not put in extra efforts for the company when needed.

How to deal with employee turnover: Ways to reduce employee turnover

  1. Right opportunity to right people Selecting a right person for the right job and opportunity is a vital part of the management activity. A wrong choice can be a heavy mistake not for an organization but for the employee as well. The success of a company is hugely based on giving the right job to the right people.
    Each company needs its A-Team. Each best team has different people with different capabilities When each of them is given the job as per their passion, they outperform. Having right people at the right seat is important for companies to succeed.
  2. Hire right people Hiring the right people is the basic requirement of any organization. It reduces employee turnover drastically. Numerous interviews and discussions should be carried to understand the candidates. They not only should have required skill sets but also fit in company’s culture and value systems.
  3. Competitive and comprehensive packages The current economic conditions make it volatile for organizations to retain the talent. In order to keep the workforce competitive and successful, the competitive and comprehensive compensation packages are important. It also helps differentiate the organization from the competitors hence, helping in reducing the employee turnover.
  4. Knowledge gaining and sharing opportunities Most of the organizations believe in training and development activities for employees. The crux is where the management needs to focus. It is important to know if the training and development activities done for knowledge gaining and sharing are making any impact on the employees.
    Employees can also undergo on the job training as well. Altering their roles and responsibilities can help them sharpen their skills. BY providing more information to the employees and letting them head or lead teams, they feel more part of the organization.
  5. Respect employees A survey conducted by Harvard Business in the year of 2014, more than 50% of the respondents said that they do not feel respected by their managers and top leaders. Much has not changed in last 3 years in this aspect. This lack of respect has the tremendous amount of impact on the employees. The employees who feel respected have the positive approach towards a company and its goals. It is vital for their overall well-being. The feeling of trust and safety enables employees to stick with the company for a longer duration.
  6. Recognition Every human being yearns for recognition and appreciation. Recognition doesn’t only mean timely promotions. It also means an untimely, formal or informal acknowledgment of an employee’s efforts. This encourages others to give their hundred percent. Praise and appreciation differentiate your organization from the rest. It helps in making a positive work environment.
    Employees who are recognized, appreciated and praised are more engaged. It helps your business to stay on the track. Motivated employees offer outstanding results as they see their efforts in alignment with the larger business goals.
  7. Engage employees An employee is truly engaged when he or she works with all heart and mind for the company. These employees are productive and efficient in nature. Managers play a vital role in engaging employees. As discussed above, a strong relationship with the manager engages them and boosts their confidence. An environment which is honest and full of integrity makes employee comfortable. If they need to explain their position on the daily basis, they would definitely disengage with the company in order to protect themselves.
  8. Involve them in decision making By now, it is evident that for organizations to reduce employee turnover, employees need to feel appreciated and being part of the system. Involving them in decision making is one more crucial aspect of the employee turnover. How much an employee is involved in the overall decision making in their team or department influences their overall motivations, morale, and satisfaction. This leads to higher level of commitment from the employees. Not only the employees feel valued and a part of the team, they are even able to make better day to day decisions. It makes them independent easily. This even makes them a problem solver instead of playing the blame game.
  9. Celebrate employee milestones It is easy for management to ignore or forget the workplace milestones of an employee. It is an essential strategy for reducing employee turnover. Like discussed above, recognition and appreciation play a vital role. As a part of the recognition, celebrating employee milestones is important. Appreciating smallest details can drive employees to stretch themselves for organizations. It gives a sense of purpose to employees and they can reach their potential.
    A study done by PwC found that many employees having key roles in organizations also prefer appreciation, recognition, and having a sense of purpose more than just having good compensations and packages. This by anyway doesn’t mean that good compensations and packages are not important. But, a good balance of both is required.
  10. Regular celebrations A lot of managers feel celebrations at the workplace is the waste of time and money. But, these celebrations are critical for your overall workplace environment. Celebrating festivals and important events create energy and boost the employee engagement. Regular celebrations at the company bring the team closer and strengthen it. Better communication between the team members can help the company in the longer run. An empowered employee is a happy employee.
  11. Cross training and career progression Most of the employees are interested in learning and understanding the profiles outside of their roles and responsibilities. Cross training helps employees to improve their proficiency but also make them empathetic towards other departments. Moreover, it gives employees an opportunity to expand their knowledge. It can also help the company to leverage their current talent pool instead of finding a new talent.
  12. Continuous feedback A feedback system is an essential part of the workplace culture. Continuous feedback helps in setting the right tone and rhythm of the work. Feedback lets employee be on the right track and in sync with the company’s goals. It should be a helping hand not a way to demean the employees. The feedback has to be delivered in a positive manner and should give solutions to the issues raised. Increasing the efficiency and effectiveness of the job done by an employee, it also trains and grooms them.
  13. Encourage generosity and gratitude An organization should encourage a culture of generosity and gratitude. An attitude of gratitude is the need of the hour, especially in today’s high-pressure work environment. Managers need to show gratitude and generosity to their team and subordinates. In the absence of this, the team may feel their work is not valued enough even if they receive appreciation and recognition. By saying a small thank you or communicating effectively, organizations can build a positive work environment for their employees.
  14. Flexibility Offering flexible work policies may not be easy for all the businesses. But it should be considered and applied to whatever extent possible. Flexibility offers a boost to teamwork and makes the workforce more productive. Happier and satisfied employees create happier and satisfied customers. Empowering employees by offering flexibility, they are more engaged and stick with the company for longer durations.
  15. Prioritize employee happiness Numerous companies do not focus on the happiness and well-being of employees. Putting employee’s happiness in a back burner can help businesses reach short term goals but in the longer run, it attracts burnout and employee turnover. Encourage your team to take vacations and leaves whenever required. Help them create a support system around them for addressing their personal problems and issues. Make their health a priority and give them time off to have fun and laugh more.
  16. Provide an inclusive vision Most of the time employees are disengaged and feel out of place in a team. This also happens because they feel they are not contributing to the larger business goals. When employees feel their work is not valued enough they become interested in the work. That is why it is important for them to understand the vision and goals of an organization and how their work contribute towards it. By tying team and individual goals to the larger goals, the chance of their staying and performing well increases.
  17. Encourage employee relationships Better employee relationships provide greater understanding between the team members. A team with good relationships and communication is more efficient. This can be achieved by being little more considerate. For example, you can keep emails short, plan your meeting well in advance, make meeting short and crisp, ask for input, honor their job and let them know you care.
  18. Outline challenging and clear career path Employees are more engaged if they feel their managers care about their career growth. By understanding their career goals, managers can reduce employee turnover drastically. A clear career path helps employees to undergo a mechanism which would enhance their skill sets. This helps employees to achieve greater heights and increases their morale and satisfaction.
  19. Culture of innovation The mindset for the innovation has to be built from the top and penetrate to the bottom. Creative thinking and collaborations have to be encouraged and rewarded equally. One may never know how a small idea can change the direction of the company. It starts with the beliefs, expectations, and purpose of the top management. Listen and stay open to the suggestions of your employees because ideas do not always come from the experts.
  20. Show your commitment In the end, everything boils down to the commitment. If management is committed to bringing out the change, employee turnover can be reduced greatly.

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