Home Digital Transformation and Digital Adoption Combating High Employee Turnover
Digital Transformation and Digital Adoption

Combating High Employee Turnover

Combating High Employee Turnover

You’ve invested time, budget and resources into hiring and training an employee and then they decide to terminate their contract.

What now?

Staff turnover not only affects business, but also shifts the tone of the entire office, usually resulting in an unsettling atmosphere for the remaining employees for a unknown period of time.

This type of company shakeup is costly, uncomfortable, and usually causes the business to reconsider their approach to their internal training programs.

When employees leave, some of the challenges for HR and Talent Management lie not only in employee offboarding but also in maintaining the entire employee experience.

While some attrition is natural in any business, an increase in departures will certainly raise eyebrows both internally and externally.

In this article, I will cover the main reasons for high employee turnover and what you can do to improve your employee retention rate.

But before we discuss the necessities for improving the employee experience, let’s quickly talk about costs.

two men reviewing a project plan

Employee Turnover Costs for the Employer

In Talent Management, probably the most important metric to measure would be the average cost per hire.

The average cost per hire is necessary to properly gauge the budget for recruitment. With this calculation, it becomes much easier to understand how to apply the rest of the funds.

According to Glassdoor, the average Cost-Per-Hire is around $4,000 for US employers.

This means that each new hire was able to begin thanks to the join effort of  internal and external hiring resources.

Cost can be found by using the formula:

cost per hire formula

Some of the costs that impact employee hiring are:

  • job sourcing
  • background checks
  • cost of onboarding and training
  • cost of learning and development
  • cost of time with unfilled role

Managing these costs upfront and comparing them with your industry benchmark gives you the ability to potentially save your company more money in the long run, as well as strategically hire future top talent.

Two women working on their laptops at a coffee shop

Employee Turnover Costs for the Employees

Losing one or many employees over a short period of time does have a lasting effect on the remaining employees, whether it is vocally expressed in the office or not.

An employee’s departure due to unforeseen issues forces the remaining staff members to take a hard look at their own situation with the current employer, which in itself can cause a decrease in overall performance.

In a study by Salesforce (using data from the American Psychological Association), turnover by one standard deviation contributed to a 15% decrease in performance.

The performance rate has a direct correlation with turnover rate, thereby showing a higher turnover rate resulting in a lower performance rate.  

A disruption of this nature causes emotional stress regarding continuing employment at the company, as well as stress from maintaining positive performance.

Overall, the efficiency of the affected team is at risk because they will need time to adjust to the changes and to find new ways to account for the sudden change in their internal network.

Not only do they need to account for short-term coverage, but also for long-term success.

What is usually causing employee turnover? What can be done to prevent it?

Business meeting at a restaurant

Top Reasons for Employee Turnover

Feeling Undervalued

The lack of recognition in the workplace has lasting effects on employees. According to Forbes, 66% of employees claimed they would leave their current employment due to just this fact alone.

For millennials, this number is even higher. 76% of this tech-savvy generation says that they would leave a job if they felt they were underappreciated at work.

But is this even surprising at all?

Contrary to popular belief, appreciation doesn’t always translate to a monetary form of recognition.

Feeling undervalued develops into a lack of motivation. The lack of motivation turns into a lack of purpose.

Without a sense of purpose, these dissatisfied employees eventually look for more meaningful work elsewhere.

It’s in our DNA, after all…

According to Dr. Steven Tyler from Psychology Today, “human beings crave purpose, and suffer serious psychological difficulties when we don’t have it. Purpose is a fundamental component of a fulfilling life.”

This is why more people are no settling for any job that comes around. People want meaningful careers, they want to feel appreciated and motivated for each day they spend in the office.

In order to retain top talent, employers need to realize this and to make the effort to implement more effective management training into their employee retention strategies.

man and woman working together in conference room

Stagnated Professional Growth

Another reason for employee turnover is plain boredom. When employees are feeling bored with their job, they wonder if the carpet is greener at another company.

Tackling this issue head-on can and should be a priority for most managers and HR in general.

In fact, according to Gallup research, “75% of the reasons for costly voluntary turnover come down to things that managers can influence.”

These things that managers can influence  included career advancement and development opportunities.

A professional development plan is one way to proactively counteract this sense of boredom with a job because it provides more commitment from management, signaling value and trust to the employee.

A professional development plan is also a good KPI measure to review during performance reviews to keep professional goals aligned.

Without any sort of plan, employees feel underutilized, as if they were just filling the status quo without any hope of new opportunities in sight.

Work-Life Balance

The term “work-life balance” might sound like an ambiguous, overused, indefinable ideal used to describe the right way work life and personal life live in harmony, but by now it is also something that people expect to have, or strive to have.

Working for a living allows us the freedom to live a life that is more comfortable and financially secure.  

But spending 40+ hours a week with certain people from various backgrounds can often clash together.

Especially if there has been certain precedence already established by the company.

Take Uber for example.  

While they boasted an “always be hustling” attitude, the reality was a dark, aggressive, and unethical company culture nightmare.

When Susan Fowler, ex Uber employee, decided to publish her experience in the workplace, some were surprised to hear that such workplace harassment could exist at such a successful Silicon Valley establishment.

But for those who have experienced this type of behavior first-hand were not surprised in the least.

The “get ahead at any cost” mentality quickly translated into overstepping management and peers, leaving women at Uber feeling hopeless and abandoned seeing that their reports of harassment were openly trivialized by upper management.

It’s true that company culture is often neglected as a priority by fast growing businesses.

But failing to take into account what the effects of the culture on employees is can quickly decrease your chance of employee retention.

Think to yourself, do the values of the company match the values of the employees?

What kind of outcomes are a result of the daily communication?

If these answers do not match your company values, take it from Uber –

It is time to sit down and realign.

conference meeting with five individuals

Employee Retention Strategies to Reduce Employee Turnover

Increase Employee Engagement

According to a Gallup poll, 91% of employees say that the last time they switched jobs they did so because they wanted to find more engaging work.

Keeping employees engaged with their work boosts morale and encourages further development.

Consequently, this can be done immediately and without much change to the current structure of your organization.

Boosting engagement is using different employee training techniques and one example of a modern employee training technique is the use of gamification.

Gamification is proven to improve the attention span and motivate individuals to finish what they started, triggering the reward system in our minds.

Whether it is through AI, quizzes, or another winning actual prizes, gamification makes the learning process fun and engaging.

Another great option is to offer a mentorship program. Mentorship programs are concrete methods to show that the employees are valued at a high level.

These programs enable employees to put their superpowers to good use through active knowledge transfer.

This speaks volumes on the level of value a company can offer, and goes beyond the typical feedback received in a performance review.

Facilitate Tomo

What’s ‘tomo’, you say?

This term “tomo” or total motivation is term often used by leadership expert Lindsay Mcgregor.  

In an interview with Slack, she states,

An employee’s total motivation (tomo) is defined by three direct motives: the play that people feel in their work, the purpose they find in it, and the potential they see for outcomes like career advancement.

So how do you set up your organization to act in the best interest of your employees?

Open communication is the first step towards driving tomo at the workplace; without this your efforts will go unnoticed.

With the tomo method, you understand what motivates your employees to come to work everyday, what drives them to do better, to work harder.

Getting to know employees on a more personal level helps management improve their efforts on  developing customized career building methods and to create more personalized employee training programs built to adapt to the volatile times in the digitization era.

Boost Employee Productivity Through Employee Empowerment

Put the ball back in the employee’s court by providing them with the tools and support they need to form their career in the way they see fit.

Empowering your employees by supporting their career development (and not personally directing it) gives them a certain degree of autonomy to choose the next big decisions in their careers.

This kind of autonomy is the polar opposite of micromanagement, and is one of the quickest ways to establish trust in an organization.

Employee empowerment also gives way to leadership development.

With the established trust, employees feel more motivated to fulfill their position to the best of their ability.

Employee empowerment doesn’t mean lack of supervision, but rather knowing when the supervision is necessary for supporting success.  

Business presentation on whiteboard

The Best Thing to Address Employee Turnover? Listening  

Overall, the best thing you can do to address employee turnover and training issues is to listen to your employees.

Offering a supporting ear shows your commitment to the employee but also gives you the feedback you need to hear to understand where there are potential gaps in the process.

Sometimes the best way to get the full picture of your organization is to hear it from someone else.

But don’t just take our word for it.

See what 39 companies consisting of Adidas, SAP and Microsoft say when it comes to retaining top talent in Time Doctor’s Employee Retention Strategies recent blog article.

No matter what you do, you’ll always have to face the problems connected to employees who need to be replaced. And while the healthiest thing you can do is strategically addressing the issue, you’ll still need to cope with a certain degree of employee turnover.

Learn how employees can learn how to use software without any conventional training by downloading our ebook.

By reading our ebook you’ll discover how you can:

  • Create a much better employee experience by getting rid of boring seminars, dusty handbooks, and lengthy tutorials
  • Drastically reduce staff training costs (to curb the damage of employee turnover, for instance)
  • Increase productivity from day one
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About the author:
The Userlane team brings you digital adoption insights, product updates, and plenty of onboarding and engagement advice for user-centric businesses.