Employees leave companies for a variety of reasons outside of your control — including retirement, relocation, and changes in life circumstances. However, your employees may also quit due to factors you can control, like poor management, lack of career development options, lack of appreciation, and motivation unwelcoming company culture.
- Low morale
- How many employees volunteer for additional work or company activities? If the number is low, this is a good indicator of low morale.
- Owners that make unnecessary improvements or hires without bonusing existing staff
- Is management replacing furniture or working computers with newer technology, adding vending machines or hiring unnecessary staff? Employees pay attention to management purchases and wonder why funds weren’t spent rewarding existing staff instead of making the sitting room look nicer. If you are a business owner, re-think that new couch and instead bonus your hardworking and loyal staff, it will go a long way when better opportunities come their way…
- Lack of leadership
- Is there a leader. As a seasoned business consultant, it amazes me how many small businesses lack leadership and let their employees/contractors run the show without any accountability or management training. How many of your staff spend more time focused on their social media accounts than they do their jobs? Don’t blame the employees, blame the lack of leadership. It’s amazing what employees will do when there is a lack of management and they are bored.
- Lack of management accountability
- Not much to say here… ask yourself if your management staff takes accountability for their mistakes and takes the steps to remedy their errors? As a consultant, this is the number one complaint I hear when doing business assessments. “My manager puts the blame on everyone but himself/herself.”
- Lack of pay increases or industry-standard increases
- The number one reason you will lose top employees is money. Don’t expect your employee to do the research to determine if they are paid appropriately.. if you are a business owner, this is your job. A manager/owner that doesn’t understand what their employee is worth is to blame for the costs associated with turnover. Pay your employee by their worth to the company-not by their job title. Period.
- Employees that feel valued for their work and loyalty and are rewarded are more likely to stay with a company during downturns, turn-over, and less than ideal working conditions.
- Do not promise what you can not provide. Offering bonuses for company performance that is outside the direct control of the employee is not only destructive to morale but viewed as very poor management. Do not set target goals only based on company performance. Example, offering a bonus if the company brings in “x” new clients a month but not giving the employees access to advertising or marketing funds is setting up your employees to fail. Instead, offer incentives based on individual roles and make sure you follow through. If one of your incentives is to pay commission, it is your job as the owner/manager to have a solid tracking method in place, not your employee.
- Are your employees putting in extra hours without compensation? Pay attention to your top performers and reward them accordingly.
In order to reduce staff turnover, you should first calculate the turnover rate. Top reasons why it’s important to calculate your employee turnover rate:
- Provides a clear understanding of the time and money you spend looking for, interviewing, hiring, and training new employees.
- Assists in pinpointing where your company may be lacking in terms of employee satisfaction and engagement.
- Brings awareness to employee separation costs such as unemployment compensation-either paid out as unemployment claims or severance packages.
- Allows you to assess and revise your talent acquisition strategy and determine its effectiveness.
- Start by calculating the average number of employees for the time period. To do this, add: (# of employees at the beginning of the time period) + (# of employees at the end of the time period) and divide by two.
- Divide: (# of employees who separated from the company during that time period) by (average # of employees)
- Multiply: (# calculated in step 2) x 100 = turnover percentage
- Loss of clients/customers
- Many repeat customers come back to a business because of an established trust with an employee. Keep that in mind when compensating your top performers.
- Loss of revenue-losing an employee, even a poorly performing one, will cost money to replace.
- Public Perception. People talk. Social media can be brutal to a business that is struggling or one that mistreats its employees. Keep in mind just how easy and fast it for people to share their perception of your business, true or not.
Take Care of Those Who Take Care of You.