Turnover at American companies is on the rise. According to a report by Compdata Survey & Consulting, employee turnover increased by 88% from 2010 to 2018.
The Gallup organization calculates that replacing an employee will generally cost a business anywhere from one half to twice the amount of that employee’s annual salary. This estimate factors in the costs of training and recruitment. However it doesn’t calculate the less tangible consequences that may result within a work environment. Things like coworkers feeling less secure and a disrupted social environment. And at least temporarily, increased workload to compensate for the gap left by the person who has departed.
It is a fundamental truism that happy employees generally don’t go searching for a different job. But in addition to simply maintaining “comfortable conditions,” employers can take proactive steps to ensure employee retention. For example, it’s great to “allow” employees to speak their minds, but take this farther. Businesses can create online platforms and forums for just this purpose. Use them to collect organizational feedback/dialogue, and community building within the company.
Similarly, while it is great (indeed, essential) to provide opportunities for career growth, many employees don’t want to wait. That is, they don't want to wait for their next promotion before they can begin contributing their skills and talents. They want to go beyond their circumscribed job descriptions. Therefore, innovative companies might build in avenues for employees to participate in projects outside their designated range of duties.
Of course, conditions where employees feel loved and valued is the first principle of employee retention. It's a culture where managers and employees show that they truly care and take a genuine interest in each other's lives and well-being. This goes a long way towards employees feeling “at home” and content while giving employees a sense of security too.
Individual feedback is one key to this, but periodic performance reviews are surprisingly not the ticket – at least not by themselves. Rather, managers and employers are more effective when they establish relationships of regular ongoing transparency with team members. Providing respectful and conversational feedback on a frequent, informal basis is the way to go. But not so much that it overwhelms an employee because no one wants to feel “evaluated” every moment of the day. Give constructive feedback so that employees are confident that their supervisors are not withholding critical judgments or perceptions. When managers and supervisors are transparent, employees get the message that “we are all in this together.” They don’t have to fear the inevitable, occasional failure, and they will perceive that their bosses have a certain loyalty to them.
Finally, departing employees are a gold mine of data about what a company might consider doing differently. Exit interviews often yield critical information. When an employee decides to leave, they may be doing so for personal reasons. These reasons may be completely out of the employer’s control – and/or they may have surprising perspectives to share.
The basic principles for retaining employees include valuing and seeing them as individuals with unique gifts and unique needs. No one wants to be a “cog in a machine.” The most vibrant businesses ensure their employees feel dignified by their jobs.