How To Manage Employee Turnover: 7 Strategies for Success

Employee turnover can be costly. According to Gallup, replacing technical professionals can cost up to 80% of their salary, and leaders or managers can cost up to 200% of the position’s salary. So, it’s in your best interest to keep your employees engaged and satisfied—especially when 42% of employee turnover is preventable.

Below, we’ll explore reasons for employee turnover, what you can do to prevent it, and how to create a thriving company culture that attracts (and retains) talent.

Why Do Employees Leave?

Too often, people walk away from their jobs not because a great new opportunity has appeared, but because they are unhappy where they are. If they aren’t consistently given the attention and resources they need to thrive in their role, they may become frustrated, give up, and leave. That failure isn’t what you want, and it’s certainly not what they want.

One in two US employees are open to leaving their jobs. The top reasons employees leave include insufficient or unsatisfactory salary, poor culture fit, and a lack of recognition (among others).

It’s essential for managers to have the right conversations, early and often, to help prevent unnecessary turnover. During your regular checks-ins, don’t forget to create space for employees to talk about their job satisfaction, future, and performance‌.

What Is Turnover?

Turnover measures the number of employees who leave your company during a set time. It includes employees who leave voluntarily, as well as those involved in layoffs or whose positions have been terminated.

Is Turnover Bad?

Too much employee turnover can be detrimental to your business. Not only can it be very expensive to replace your staff, but it can also lower morale. It’s important to have contingency plans in place to help improve employee retention and retain good talent in your company.

The Costs of Managing Turnover

The costs of employee turnover are high. Some costs can be measured in dollars, such as the price of recruiting and onboarding. Other cash costs of turnover may include lost clients and revenue, as well as overtime expenses for other employees who do extra work until a replacement can be found.

Successfully managing turnover and improving employee retention can save you lots of money. But when you tally the expenses of turnover, it’s not only about cold, hard cash. Whenever someone leaves, there are many other indirect costs that could be painful for you and your organization.

• Lower employee morale
• Reduced engagement
• Increased workload
• The permanent loss of institutional knowledge when a key person leaves
• Increased absenteeism and burnout
• Months or years of decreased productivity while the replacement learns to do the job as well as the person who left

Fortunately, managing turnover effectively and reducing employee retention problems can be simpler than you may think.

How To Calculate Turnover Rate

Labor turnover rates can be used to work out what proportion of employees have left your business. You can look over your turnover data for any period of time, but companies often analyze on a monthly or annual basis.

Here’s two calculations you need to know:

Monthly labor turnover rate = Employees who left during the month / average number of employees for the month x 100

Annual labor turnover rate = Employees who left during the year/ average number of employees for the year x 100

Once you know your average turnover rate, you can research your industry and see how your company fares against competitors. It can also help you to keep track and monitor any improvements or dips.

7 Strategies to Manage Employee Turnover

Great news: the same strategies that benefit you and your business are also good for your employees. Everybody wins!

A well-rounded game plan for successfully managing turnover can help everyone in your organization, from new hires to seasoned pros. As engagement and job satisfaction grow, productivity and employee retention improve—and issues like absenteeism and burnout diminish.

Here are some of the top turnover tips to help set your company and people up for greater success. If you’re already doing some of them, that’s terrific—but don’t dismiss them. Think carefully about whether they are working as well as you’d like and what you can do to improve them.

1. Find the Right Fit

If your company makes widgets, don’t rush to hire the first applicant who walks in the door with widget-making experience. Having the needed job skills is essential, of course—but it’s only part of what makes someone a good fit for your firm.

• Look for compatibility. Finding the right fit means matching a candidate’s values, desires, and goals with your company’s goals, needs, and culture. For example, you may want someone who will speak up with helpful suggestions. An alert, outgoing person will be an excellent candidate.
• Prioritize alignment. Mutual success and satisfaction follow naturally when an individual’s abilities and interests align with their position and the company’s overall needs. Chances are, such people will be more engaged, more productive, and less likely to look for another job.
• Be adaptable. Just as your company continues to evolve, your people do too. Sometimes a position that used to be a great fit for an employee no longer is. Watch for this situation and do something about it before you lose a valued worker. Could their responsibilities be changed? Is there a better place for them within your company?

It may take a little longer to find a candidate who’s a good fit, but it’s one of the most important things you can do for both their long-term satisfaction and your own.

2. Practice Smart Onboarding

Getting your new employees off to a good start helps them ‌go the distance. Thoughtfully planned onboarding helps a new person have a great experience with your company from day one.

But helping them succeed requires more than just making a good first impression. It calls for a personalized onboarding process that’s tailored to the individual’s needs, role, and performance goals. In a nutshell, it’s important that you help them to grow during their first weeks and months in your company.

Here are our four top tips for improving your onboarding practices:

• Review and update. You must review your processes and tools regularly to ensure your onboarding process is as effective as possible—and improve where needed.
• Be flexible. Remember that every new member of staff is different, so standardized approaches don’t always work. You need to be ready to evolve and adapt to the needs of your new hires.
• Use metrics to track success. KPIs will come in handy to measure how successful your onboarding process is—consider using feedback scores or employee retention rates.
• Respond to feedback. Introduce surveys so you can learn about your employee’s opinion of their onboarding experience. Actively seek feedback and foster an environment of open communication. Be receptive to constructive criticism and take suggestions on board.

3. Use Employee Recognition Strategies
It’s human nature: we like to be rewarded. And who doesn’t enjoy being appreciated? Rewards and recognition show your people exactly what your company values about their behavior and help guide them to success—fostering job satisfaction and loyalty.

Here are a few pointers for recognizing and rewarding your people in meaningful ways:

• Keep your eyes open.  Always look for people who always do a great job as well as those who go above and beyond when an exceptional challenge appears.
• Be consistent and frequent.  Some companies have a narrow view of where and how to use employee recognition strategies, perhaps giving annual bonuses to the sales department’s top performers. But wise companies know regularly rewarding and recognizing employee achievements throughout the organization can ignite engagement, motivation, satisfaction, and performance. Once a year isn’t often enough to recognize all the different people in your firm who are doing great things. Monthly or quarterly company meetings might be more like it. And don’t wait for a meeting when someone deserves immediate recognition.
• Be sincere.  Don’t diminish the value of employee recognition by giving praise and rewards that aren’t fully deserved. For example, you don’t have to name an “outstanding employee of the week” every week. Employees will soon realize that this kind of recognition doesn’t mean much.
• Think outside the cash box.  Money may be a favorite reward of employees, but it’s not the only worthwhile reward. Simply being recognized and praised can boost an employee’s self-esteem and enthusiasm, especially when it happens in front of their colleagues. Other ideas that cost little or nothing include an award certificate, recognition in your company newsletter, time off from work, and a personal note of appreciation from a supervisor. Use your imagination and use more than one reward whenever you can.

Happy, appreciated employees are more likely to stay with you for the long haul. That’s why smart employee recognition strategies should be a high priority in your overall strategies to manage turnover.

4. Create a Positive Work Culture

Cultivating a positive work environment goes a long way in keeping employee retention rates up. You can do this through forming strong bonds with your staff through regular feedback, affirmation, and team building activities.

It’s also essential to build a safe, secure and welcoming atmosphere at work, that prioritizes diversity, equity, and inclusion. Providing your staff with flexibility, like flexible working hours, remote work opportunities, and paid time off may also help to reduce employee turnover and boost a healthy company culture.

5. Offer Competitive Compensation

Pay isn't the be-all and end-all, but let's face it: it's pretty high up there. Employees who feel financially stable are happier and more productive. In fact, 36% of employees see a clear link between their pay and their mental health.

Offering competitive compensation can help to attract and retain top talent, so it’s important to be aware of what your competitors are offering. Conduct regular salary audits, research compensation trends, and provide performance-based perks or bonuses.

A comprehensive compensation package, with paid time off (PTO), competitive health insurance, and wellness programs or other perks can help to meet your employees’ expectations and lead to a lower turnover rate.

6. Provide Opportunities for Growth

Organizations that make an effort to invest in employee development are twice as likely to retain their employees. In fact, career growth opportunity is a top reason people give for changing jobs.

Invest in your employee’s development by empowering them to upskill. Having a clear understanding of the professional development tracks within your company can help to keep your staff motivated. Not only will this improve their work output, but it can also help retain talent.

7. Conduct Exit Interviews

Exit interviews are a golden opportunity to ask your staff about what prompted them to search for another role. Whether it’s company culture, salary expectations or that they’re no longer inspired, it’s important to know what’s gone wrong—so you can prevent it being a reason next time.

During an exit interview, you can gather feedback and identify areas of improvement, so you can make changes to address any issues and concerns. In time, this will help to create a more positive and supportive work environment.

More Help Managing Turnover

You’ve seen how finding the right fit, smart onboarding, and employee recognition strategies can help you establish a more stable, satisfied, and engaged workforce. Ready to learn more? Focus on your people with BambooHR.