High turnover is every business owners' nightmare. The cost of a bad hire can be upwards of $12,000, and if you're regularly churning through employees, you're at serious risk of business failure. When you see a higher than usual turnover rate in your business, use these four tips to address the underlying reason for your turnover rate and become an employer of choice in your field.
Conduct a Wage and Job Evaluation
While employee loyalty may have been the norm thirty years ago, employees today recognize that the best way to get a raise in today's marketplace is to switch to another company. If you offer lower wages than your competition, you may not be losing employees to company culture but to better compensation. To start ebbing the flow of exiting employees, start by conducting a wage and job evaluation. Find out how much your competitors are paying, what job duties their positions entail, and what benefits they offer. Taking a 360-degree look at the competition can help you pinpoint where your own company is falling short. Then, apply your findings to your current employees and new hires. By readjusting your compensation package, you can attract better employees and retain the best.
Clarify Your Corporate Ladder
Another common cause of a high turnover rate is employees leaving to take a higher position in another company. In many workplaces, the upper levels of management are filled by employees who have been working for years and newer employees find they need to change companies to work their way up the corporate ladder. If you're experiencing high turnover because employees don't feel they have the opportunity to grow, you need to build in a way for those employees to feel challenged and valued, even if that doesn't result in a promotion. Create a stronger corporate ladder that builds in training for management and additional education to take on new job duties. By valuing the education and advancement of your employees, you can increase employee engagement and reduce turnover.
Ask Your Employees
If you're not conducting an effective exit interview with employees, you are missing out on gathering valuable information. When you're experiencing high turnover, it's not just the employees who are leaving that know what's wrong, the current employees know too. Once you've done a wage and job assessment and restructured your corporate ladder, it's time to talk to your employees about what part of the company culture can be improved. A confidential survey or discrete interviews that focus on improvements can help get an idea of where your management team is failing to engage current employees and start to fix the problems.
Analyze Your Hiring Process
The right employees start with the right hire and if your hiring process isn't finding the employees that fit your workplace culture, it's contributing to a high turnover rate. If employees are leaving before their first year of employment, you are probably experiencing poor hires or an unsatisfactory onboarding process. Compare both processes with your exit interviews to discover where you're missing the mark. Often, businesses become so obsessed with filling a position, they don't look at whether the person they're hiring actually fits the company culture. Or they expect that employee to perform out of the gate and instead, they become overwhelmed and disillusioned. Take a good hard look at how you're hiring and how you're training to discover whether you're contributing to your high turnover rate.