Please Don't Go: 5 Ways to Reduce Employee Turnover

July 14, 2015 Heather Hurst

How much is employee turnover costing your organization? Way too much.

The costs quickly add up when you take into account the hours of lost productivity before an employee leaves, the time spent filling the vacant position, potential overtime from managers and coworkers to compensate for the missing position, time spent on admin and hiring tasks, and the hours of lost productivity while training a replacement.


"Expert estimates on turnover costs vary largely because there are numerous factors (industry, location, skill set, years of experience, salary, etc.) that can be considered," says Chris Thomas, president of the Intrepid Agency in Salt Lake City, Utah, "but it's always an expensive proposition."

Try 50% to 200% of an employee's annual salary, multiplied by however many employees jump ship in a given year. Imagine the difference it would make to your departmental budget if you could reduce employee turnover even by 25%.

The costs of employee attrition aren't all financial in nature, however. Team cohesiveness, collaboration and communication take a hit too. "Strong teams, divisions and even companies are built on good chemistry developed over several months and even years of collaboration," Thomas says. "This is difficult if not impossible to accomplish when there are higher levels of regular turnover."

Luckily, there are a few things managers can do to reduce the number of going away parties and new-employee orientations they have to endure from year to year.

1. Recruit Right

Chris Thomas, President of Intrepid Agency Pictured: Chris Thomas, President, Intrepid Agency

"Be as thorough as possible in recruiting and hiring the right people and then creating an environment where no one wants to leave," says Thomas. "This may seem idealistic, but at the same time the value of strong teams cannot be overstated."

In a popular article, Workfront CEO Eric Morgan outlined three mistakes executives make when hiring for leadership positions. The same mistakes are often made by hiring managers at all levels of the organization:

  • Valuing a seemingly prestigious background over behaviors like strategic thinking, strong achievement drive and the "figure it out" factor
  • Prizing related industry experience over innate ability, especially in sales and related fields
  • Being drawn in by a prestigious resume and hiring a "little fish from a big pond" whose achievements could easily be credited to others

Further, if your internal HR department has recruiting tools available, use them. All too often, when an employee doesn't work out, the problem can be traced back to missing steps in the interviewing and recruiting process. References weren't checked. Not enough candidates were interviewed. Managers decided to "go with their gut" rather than appropriately weighting the talents, skills and knowledge needed for the position, and then searching for those specific attributes.

2. Manage Like a Boss


The Society for Human Resource Management (SHRM) has found that the following consistently rank among the top five aspects of job satisfaction, alongside compensation, benefits, and job security:

  • Opportunities to use skills and abilities
  • Relationship with immediate supervisor
  • The work itself

In fact, an employee's relationship with his or her direct manager often has the biggest impact on job satisfaction. "A poor relationship with an employee's direct supervisor is one of, if not the biggest, reason that good people leave," Thomas says. "Others include an employee's perception that there is little or no room for growth or inconsistency in organizational policies and communication."

Managers who do the hard work of actually managing—removing roadblocks, being genuinely concerned about employee satisfaction and success, providing opportunities for professional growth, offering regular feedback both formally and informally, recognizing and rewarding achievement—are far more likely to be able to attract and retain top talent over the long term.

3. Measure Employee Morale


Don't rely on gut feel, anecdotal evidence or an informal count of the number of smiling faces you encounter as you navigate the cubicle maze to your office. It's important to regularly monitor, measure and address employee morale.

The Gallup Q12 Employee Engagement Survey is an excellent measuring stick that's been used by businesses worldwide for more than 15 years to gauge workplace satisfaction and, as a result, reduce employee turnover. The 12 simple questions range from "Do I know what is expected of me at work?" to "This last year, have I had opportunities at work to learn and grow?"

When managers ask these questions face-to-face with genuine concern, listen to the answers and act upon what they've learned, employees will feel valued, invested in the team and empowered to succeed.

"Taking a genuine interest in each team member personally and professionally makes a significant difference. It is human nature to want to associate, connect with and be loyal to people who genuinely care," Thomas says.

Related article: "You're Missing the Boat on Measuring Employee Morale: 4 Things You Can Do About It."

4. Recognize and Reward


Reward programs are great, as long as they are built upon an objective, data-driven foundation. It's demotivating to everyone when individuals are over-recognized for average performance or under-recognized for outstanding work.

Cloud-based work-management solutions, like Workfront, can give you the visibility and real-time insights you need in order to know who is performing well and who is falling behind. Through the built-in collaboration and communication features, many of these solutions even enable in-the-moment recognition via social-media-style tagging, "like" buttons and more.

"We have especially learned in recent years that employees want to be recognized. This has led to a more concerted effort to acknowledge and communicate good work, innovation and above-and-beyond efforts," Thomas says.

No matter how you go about it, recognition should be as specific as possible and the rewards should be both immediate and commensurate with the level of achievement.

Related article: "6 Ways Managers Can Be Better at Recognizing Team Accomplishments."

5. Step Up the Perks


In a CareerBuilder survey from 2013, a strong majority of workers (70%) reported that increasing salaries is the best way to reduce employee turnover. This is not news to anyone. Still, salary increases aren't the only way to go, especially for Millennials, who tend to be less driven by income and more driven by the pursuit of work-life balance, in comparison to their older counterparts. (Read more about these findings in Workfront's "Work-Life Imbalance Report.") As far as what kinds of perks to consider, respondents to the CareerBuilder survey also cited the following:

  • better benefits (58%)
  • a more flexible schedule (51%)
  • increased employee recognition (50%)
  • special perks like half-day Fridays and on-site fitness centers (26%)

Companies like Workfront and the Intrepid Agency understand the importance of retention, so they aim to create environments that no one would ever want to leave. A few of the perks dreamed up by one or both companies include:

  • unlimited PTO for all Workfront employees
  • twice-yearly paid service days at Workfront
  • monthly profit sharing for all Intrepid employees, regardless of title, experience or tenure
  • an annual, daylong trip to a surprise destination that's not revealed until Intrepid employees show up at the airport
  • quarterly MVP awards and peer-to-peer recognition program at Workfront
  • monthly wellness match or reimbursements for gym memberships or other activities (yoga, tennis lessons, life coaching, massage) that enhance health or reduce stress
  • on-site perks like cola machines, a game room, nerf guns and more
  • sabbatical program ranging from a bonus week of PTO at the 4-year anniversary to a 6-week sabbatical earned after 14 years of service at Intrepid
  • birthday and work anniversary observances that include cash and/or public recognition

Keeping Your Employees Employed

Good-byes are never easy. Especially when you have to bid farewell to yet another high performer who has been snatched away by the competition.

While there's no magic formula for creating a vibrant, positive and productive workplace that can attract high performers and keep them engaged long term, there are a few simple secrets that can help reduce employee turnover. Start by recruiting the right talent in the first place, then forge genuine relationships with your employees, paying special attention to morale, recognition and rewards. And don't forget to throw in a few perks. Half-day Fridays may make a bigger difference than you think.

About the Author

Heather Hurst

Heather has enjoyed playing the game of marketing for the past 15 years, at the agency and corporate level, in both B2C and B2B companies. She's run PR campaigns that took her from the MTV Beach House to NASDAQ and many media outlets and content channels in between. She is currently the Corporate Marketing Director at Workfront.

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