Just hearing the word “turnover” can strike panic into the heart of even the most experienced HR professional right now. 😬
With all the resignations, reshuffling, and high-speed hiring you’re probably experiencing, it can be hard to come up with an effective employee retention strategy.
But sorting out which turnover is a problem, and which is simply a natural and normal rhythm in the employee space, can help you keep a clear head and decide what actions to take. Here’s what you need to know to retain top talent.
Turnover isn’t always bad
Employee turnover is a natural part of any business. No matter how much they love your company, many of your employees will leave eventually, perhaps because they’re moving away for family reasons, retiring, switching professions, or simply looking for a new challenge.
These factors are out of your control, and frankly, they’re not something you need to worry about when looking at your turnover rate. Your retention strategy should focus only on the elements that are within your organization’s control, or it will prove frustrating and ineffective for everyone.
But when should you be worried? And how can you ensure that you’re doing everything you can to support a healthy retention rate? Here’s where you should start.
Employee turnover is costing you, but how much? Use our cost of employee turnover calculator to find out.
Understand the causes of turnover
Retention and turnover is the top workforce management challenge according to 47% of HR professionals. But what's really driving the increase in employee turnover right now?
A huge study published in MIT Sloan Management Review found some intriguing patterns in why employees are leaving organizations:
Workplace culture matters
The study found that there is significant variation between companies in their turnover rates, meaning that company culture is a big factor in employees leaving.
They determined that workplace culture is a much more reliable predictor of employee turnover and churn than pay—which might seem surprising. In fact, culture is ten times more important than compensation when it comes to employee retention. 🙀
People are leaving toxic workplace cultures en masse because they have options and they don’t want to stick around a place that doesn’t meet their expectations, treats them poorly, or burns them out.
Recognition vs. pay
Another important component of turnover the study found was that high performers who don’t feel recognized or appreciated are more likely to leave.
They’re not necessarily looking for higher wages, though stagnant pay certainly doesn’t help if their workloads have become heavier without an increase in compensation.
But if your company isn’t rewarding your top performers for their hard work and dedication, they’re probably looking for a job somewhere else that will.
Helping your employees grow
Employees are also looking for career growth so they can use their skills to their full potential, and maybe even pick up some new ones. That doesn’t mean you need to promote everyone right now—even lateral moves or the option for international assignments can do the trick.
People just want to feel that you’re providing them with room to grow. 68% of workers globally, both blue- and white-collar, are willing to retrain and learn new skills—so be sure to provide them with those opportunities.
Flexible work options
And of course, one of the biggest topics in the HR space right now is around the move to remote or hybrid work options—will employees expect them to stick around after the pandemic?
The answer is probably yes. In fact, 58% of knowledge workers are now working in hybrid arrangements—this shift has already happened for a lot of companies and industries.
If you’re not offering some sort of flexible work options to employees and your competitors are, you’re going to struggle to retain current employees and hire new ones as well.
What matters to your organization
While this study looked at broader trends and industries as a whole, these causes of turnover might not be all that relevant to your company. After all, your business, your HR policies, and your employees are all unique.
So how can you tell what’s causing your turnover, and if there’s anything you can do about it? Let’s look at what your next steps should be.
Dig into the data
Making informed, strategic decisions always begins with understanding your current situation—and this is where data is crucial. You will want to look at the scope of your turnover, and also the impact turnover is having on your organization.
First, calculate your turnover rate:
Number of separations per year ÷ average total number of employees = turnover rate
You also need to determine how many of these employee losses are from people resigning voluntarily compared to layoffs or firings to get an accurate view of your turnover rate.
Looking back at past data can help you figure out if your turnover rate has only recently become an issue, or if it’s actually pretty similar to what it was in previous years.
All the recent talk about The Great Resignation can convince you that this is a new trend—but your company might have a long-standing turnover issue or not a real issue at all. You won’t know until you look at the data. 🔎
Watch now: 5 smart ways to use people analytics data
Ask employees what they think
Data isn’t only important when you’re looking at turnover stats, though those are pretty handy. You should also be looking at the feedback and data you’re getting from employees through surveys, like your annual employee engagement survey.
This direct employee feedback is actually the best way to understand the why behind your turnover rate. Are employees happy and engaged, but simply moving or switching fields? Are they unhappy with some part of the employee experience at your company, like a lack of recognition? Is there more potential for advancement, higher pay, or career growth at other peer organizations?
You can also hold “stay interviews” with your current top performers to ask them what is making them stick around—and if there’s anything going on that has them considering a job somewhere else.
What’s in your control, and what’s not
Knowing how your employees feel about your workplace culture and employee experience, combined with an understanding of current workplace trends, can help you puzzle out what’s behind your retention rate right now.
And this deep dive into the trends and drivers of your workplace’s retention struggles (or successes) sets the stage for creating your retention strategy.
For example, did you find in your research that commuting times, public transit issues, or regional housing prices are driving employees to look for jobs in other locations? That’s not within your organization’s control if employees truly can’t work remotely part or all of the time. Those trends are independent of your workplace, and so there’s no need to panic over some increased turnover for those reasons.
However, if employees are citing those reasons for leaving and their work could often be performed remotely, but your leadership team is reluctant to approve a remote or hybrid option? That’s within your control—and so you should be looking at ways to reduce those retention killers.
Either you’ll need to offer flexible work options or you’ll need to make up for that lack in some way like going above and beyond in compensation, career development, or perks and benefits.
Creating a better workplace culture
One thing that’s completely within your control? Your organizational culture. That doesn’t mean it’s not difficult to change—just that it’s possible.
If you find that your voluntary turnover rate is high, and your employees are telling you that they’re dissatisfied or unhappy with some aspects of your culture, it’s time for a shift.
Root out toxic elements
Your surveys and feedback should have helped you to determine what the most toxic elements of your workplace are right now. Is it poorly trained managers, an “always-on” culture that’s creating burnout, too-heavy workloads on your top performers because their peers have left, or something else?
Figuring out what elements of your culture are proving toxic to your retention efforts can be challenging. It’s hard to look honestly at the negative parts of a company you love.
But you can only make improvements with a commitment to radical honesty and acting on employee feedback.
Support employees the right way
Speaking of employee feedback, what have employees told you they need from your company? Listen to them! Following trends and studies won’t always help you deliver what your employees need, but listening to them directly can.
Whether that’s something small, like a monthly team social gathering, or something big, like a clearer path to promotions and new assignments, showing your employees that you’ve heard them and acted on their feedback makes them feel valued and appreciated.
Focus on recognition
Increasing the quality and quantity of recognition is never a bad idea. Even if your workplace seems to be doing pretty well, you can always strive to do better. No employee has ever left a job thinking, “They just recognized my hard work too much!” 😊
Your employees have helped your company get through the tough pandemic years while dealing with things like lower staffing levels, uncertainty, reorganizations, and more. Saying thanks effectively and often is the least you can do.
Employee recognition is absolutely vital to retaining employees, and we know it can be challenging. Take a tour of Bonusly to see how we can support your team. 👀
Retention and turnover are going to continue to be hot topics in the HR world in 2022 and probably beyond. But before panicking the next time a teammate hands in their resignation, take stock of what’s in your control and what’s not.
By focusing on what you can control, you can create a workplace culture and policies that make employees want to stick around, even in a hot hiring market.
Want to strengthen your employee experience? Check out this ultimate resource: