According to an article in The Wall Street Journal, employee turnover can cost a business more than double an employee’s yearly salary. Finding and training a replacement takes financial resources as well as management time and energy. Additionally, turnover often hurts morale.
Experts agree that the best way to deal with employee turnover is to prevent it. Here are three HR solutions to help you keep employees happy and reduce turnover in your small business.
- An Effective Hiring Strategy
No matter how hard you try to integrate a new employee to your business, the wrong fit is just the wrong fit. Creating and implementing a hiring strategy that addresses more than just the skills of job candidates is the best way to find the perfect match for your work environment. The most skilled worker may not always be the one you want to hire. The right candidate blends well with company culture, management, and coworkers. Also, you want to make sure that your business is a good fit for the future employee. Even if everything meshes well on paper, partnerships fail without proper chemistry.
- Compensation and Benefits Packages
Compensation is about more than money. While salary is certainly important, employees will often opt for a position that pays a little less but offers more benefits. Things like health insurance, paid vacation days, maternity leave, and paternity leave are crucial to individuals with families. People consider the entire package when making an employment decision, so you want to offer as many benefits as are feasible for your company.On a similar note, work with human resources experts to review your compensation and benefits package each year. This allows you to stay on top of industry trends and continue to maintain a competitive edge in your niche.
- Appreciation and Rewards
Employers often overlook the importance of showing appreciation to current employees. Many workers leave their jobs because they sense a lack of gratitude from management for all their hard work. Don’t let that happen to you. A simple thank-you email, bonus system, or recognition in the company newsletter are just a few examples of the ways you can show employees that they’re vital to your success. A little effort goes a long way, and any rewards you invest in will be well worth the resources spent in the long-run.
It’s no secret to small business owners that employee turnover is a costly, timely, and frustrating issue. It takes valuable resources to find and train new employees. The process often leaves staff shorthanded and away from their daily responsibilities—resulting in loss of productivity. And when productivity suffers, revenue suffers. So in the long-run, low employee retention rates have the power to hinder the success of a business.
While some turnover is to be expected, implementing the HR solutions mentioned here is a simple, effective way to reduce turnover before it becomes a problem. Additional resources can be found in a downloadable book, “Practical Tools to Manage Costly Employee Turnover”—forms and checklists can be found in the book along with strategies you can use immediately to reduce turnover. Talk to a human resources professional to get more tips on maintaining a positive, productive workplace.
My student organization back in college had a huge problem with retention. What help us the most was changing our perspective as “the organization trying to hold onto members” to “the organization people were excited to be in.” Granted, sometimes people are just not the right fit for your business, but echoing Margret’s words, we found that better benefits and increased appreciation made people excited to participate.