Employee Turnover
Employee turnover refers to the percentage of
employees who leave your company within a specific time
frame, typically calculated annually, although some
businesses may need to examine this on a monthly basis.
Business owners often believe that employees leave for one
of two reasons: either for a better-paying job or a job with
better opportunities. However, when employees are asked
why they left, the top two reasons they give are feeling
overwhelmed and underappreciated.
Perspective is Everything
From the outset, we can observe a difference in
perspective. The viewpoint of the business owner or
employer is quite distinct from that of the employee. The
employer believes that wages are the primary motivating
factor for their employees, and it is indeed true that
employees will not show up for work if they are not paid.
However, what many employers fail to recognize is that most
people will switch jobs for the same pay if they feel better
about the work environment. Employers seek talented,
productive, and happy employees who will represent their
business well. They require employees who are honest and
reliable. On the other hand, employees want to be treated
with respect and consideration. They desire proper training
to be productive and confident in their assigned tasks. Every
employee in the workforce is working to meet their financial
needs and, hopefully, some of their wants. They want to feel
successful in what they do. When a business owner decides to
hire employees, they acknowledge that they require
assistance. Their business is expanding, and as such, they
hire employees to broaden their capacity. This can be a
mutually beneficial relationship where the employer
provides work and the employee provides labor. Sam needs a
job, and Chris needs help, it all appears fantastic on paper.
Expectations and Agreements
When both parties fulfill their agreed-upon
responsibilities, everything runs smoothly. However, if
performance goals are not met, expectations are
misunderstood, or someone has a bad day, it can negatively
impact their performance and relationships. Conflicts may
arise due to a lack of clear instructions or
misunderstandings, causing what was once a harmonious
relationship to become strained. To avoid potential
problems, it is crucial to establish clear expectations and
agreements between employers and employees. For instance,
an employer can agree to treat their employees the way they
want their customers treated. This agreement provides a
framework for addressing conflicts, as it allows individuals
to view their interactions through the lens of this agreement.
In the event that the employer snaps at an employee, they
can ask themselves whether they would want their
employees to speak to their customers in that manner. If the
answer is no, the employer knows they need to apologize to
their employee.
Although this is a simple agreement, it holds significant
power. Losing a fully trained employee comes at a high cost.
A vacant position leads to lost productivity and missed
opportunities until a suitable replacement is found.
Advertising and interviewing for a new employee is both
time-consuming and expensive. Onboarding a new employee
requires valuable resources that could be used elsewhere.
Training a new hire can take weeks or even months,
depending on the position. The combined losses add up and
cost the business anywhere between 20-40% of the base
salary for that position. It’s almost impossible to quantify
the total losses attributed to employee turnover.
Furthermore, employee turnover has a negative impact on
the overall morale of your team, which ultimately affects
performance. If employees witness a revolving door, they
may not feel secure in their jobs and may proactively begin
looking for another place to work.
Here are five things you can do to decrease employee
turnover:
- Hire the right people.
- Be competitive with compensation.
- Encourage a healthy work-life balance.
- Create a positive company culture.
- Recognize and reward a job well done.
If you need help implementing these strategies, reach out to
Coach Kelli for one-on-one guidance and implementation.
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