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When you’re in the early stages of business, it can be tempting to try to save money by hiring as few employees as possible and paying them less than they’re worth in order to keep your overheads low. However, there are several reasons why adopting this approach is not ideal, and one of the biggest factors is the employee turnover rate.
Maybe you’re a seasoned business owner and have been running your company for several years, but you still find employees leaving all the time. Either way, if your team has a high turnover rate, it’s time to reevaluate how you manage employees and pay them accordingly.
Related: Staff turnover is draining your company
Reasons for high employee turnover
There are many reasons why employees may choose to leave their current position. Perhaps they feel they are not paid enough or don’t have enough opportunities for growth. Maybe the company culture is toxic or they’re just not happy with their current situation.
I recently spoke with someone who found himself working at a company that was constantly losing people — and bringing in new people. They told me that they noticed that the CEO had a tendency to give people more projects than they could handle. Eager to please in the first few days at a new job, people would say yes to anything the CEO asked, and the CEO would often ask for projects to be completed that weren’t in people’s job descriptions. These new employees would do their best, hoping to impress their new boss, but what they didn’t realize is that they were setting a precedent where the CEO was constantly asking for unpaid projects beyond their normal day-to-day . duties.
The owner of this company often expressed confusion with the high turnover rate. From the outside looking in, it’s very easy to see the problem and diagnose it. The owner of this business is passionate and always excited about the future. It’s easy for them to get caught up in the possibility of what could be rather than what is currently happening around them — especially with employees. That said, if your company has a high turnover rate and you can’t figure out why, it’s time to get help. Ask your employees for honest feedback about why they are leaving. Hire a business consultant. Get help to step back and see the whole picture.
Related: 12 Business Tips That Will Increase Company Retention
Because nobody wins when there is constant employee turnover
Constant employee turnover is costly and time-consuming. Not only do you have to worry about the cost of hiring and training new employees, but you also have to deal with the negative impact it has on morale. Additionally, high turnover rates can be a sign that something is wrong with your company culture or that your employees are not being treated well. If you want your business to succeed in the long term, it’s important to address these issues head-on.
How to manage employee turnover and boost retention
If you’re experiencing high turnover, there are a few things you can do to try to mitigate the problem. First, it’s important to consider the hiring process. Are you taking the time to interview and select employees who are the best fit for your team? Second, consider how much responsibility each new hire has when they start working for your company. Finally, it is imperative that you do not take advantage of your employees by overworking them or underpaying them. When done right, these strategies will help reduce high employee turnover rates.
If you want to ensure higher employee retention in your company, there are a few key things you can do:
- Don’t overwork your employees. Make sure they have a good work-life balance so they don’t feel taken advantage of.
- Be open to feedback and constructive criticism. This will show your employees that you are invested in making the company a better place to work for everyone.
- Offer competitive wages and benefits. This will help attract and retain top talent.
- Promote from within whenever possible. This shows your employees that there are opportunities for advancement within the company.
- Create a positive and supportive work environment. Employees who feel their contributions are valued will be more likely to stay with the company.
- Train new hires about what it means to be an integral part of the team and provide resources to support them with any struggles they may face at work (eg ensuring access to flexible scheduling).
- Be transparent about changes that could affect the working day or any other aspect of employment (eg redundancies).
- Treat every person with respect, dignity and appreciation while giving them the opportunity to achieve as well as possible in their work role.
If you have a high employee turnover rate, then it’s time to review your internal business practices to determine why people are leaving so you can create a stable, healthy work environment that allows both your business and your employees to flourish.