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Employees are the backbone of any successful business. Replacing an employee can be a painful experience, especially for small businesses and entrepreneurs with small teams. Staff turnover can result in the loss of valuable knowledge and expertise, damage customer relationships and cost thousands of dollars to find and train a replacement. The cost of hiring and training just one mid-level manager is close to $30,000. Every year, employee turnover costs American businesses an estimated $1 trillion. Here are some ways companies can reduce turnover rates and improve employee retention.
1. Start with compensation and benefits
Employees expect to be well compensated for the work they do. Companies that fail to stay competitive will struggle to retain their top talent. Although salaries and bonuses are important drivers of compensation, companies should also explore opportunities to improve other forms of compensation such as health insurance, life insurance, vacation policies and contributions. 401k. Even non-monetary perks like having an on-site gym or time off for volunteer activities can increase employee satisfaction and retention.
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2. Employee recognition and praise
Employees want to be recognized for their contributions. Business owners need to take the time to reward and recognize their team members who do their best. Different forms of recognition are effective, ranging from sending a personalized note thanking them for their work on a special project or giving a gift card to help another department. Public praise can also be effective, such as presenting awards at a company meeting.
3. Provide career development opportunities
Career development is an essential part of employee retention. Employees who feel constantly challenged will be more likely to stay with a company. Find ways to give your top performers extended assignments and promotions. Training such as educational courses and mentorship programs can be an opportunity to enhance your current staff while preparing them for their next opportunity.
Related: Here’s How to Boost Employee Retention with Lifelong Learning
4. Provide the right resources and tools
Employers have a responsibility to ensure that their employees have everything they need to be successful in their jobs. Skimping on these resources can leave employees feeling underappreciated, burnt out and frustrated. Resources come in many forms, from hiring the right number of staff to support the work, to updating technology and improving processes.
5. Promote a healthy work-life balance
Work-life balance is extremely important to most employees and can impact employee turnover. According to the Pew Research Center, 45% of employees left their jobs because they didn’t have enough flexibility in their work schedule and 39% because they worked too many hours. Giving employees the opportunity to balance work and private life reduces stress and allows them to deal with personal issues that would otherwise distract them from their work.
Companies can help foster a healthier work-life balance by allowing employees to work remotely (full-time or part-time), create flexible work hours, and have more sick or personal time.
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6. Hire the right people the first time
While this may sound like common sense, it’s easier said than done. Rapid changes in the economy and workforce can leave businesses desperate to fill vacancies. It might be tempting to only hire a half-qualified candidate. Unfortunately, this can increase turnover of new and existing employees. New employees can leave quickly when they are unable to meet job requirements. Existing employees can also burn out from constantly training new recruits.
Instead, try to retain the best possible candidate for your vacancy. Additionally, being clear about expectations upfront can help reduce the number of employees who take the job only to quit soon after because the job wasn’t what they expected.
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7. Get feedback from your team
Employees leave companies for a wide variety of reasons. One of the best ways to reduce turnover is to get feedback directly from employees about how they feel about working for the company. Too many companies collect this type of information during exit interviews. Unfortunately, that doesn’t help because the employee has already chosen to leave. Instead, conduct live interviews with top performers to find out what would stop them from seeking new opportunities outside the company. Anonymous employee satisfaction surveys can also provide a wealth of information to help business owners make retention decisions.