High employee turnover hurts a company’s bottom line. Reports indicate that it costs close to twice an employee’s salary to find and train a replacement. And because of the damage it causes to morale among remaining employees, the costs just add up from there.
Hiring the right people from the start is of course the single best way to reduce employee turnover. Behavioral interviewing and evaluating candidates carefully to assess for not only hard and soft skills but also that they fit well with the company culture is crucial. A surge in turnover following large-scale change, a merger, or acquisition, although expected is difficult and costly for an organization. However, what happens when the wheels are turning as usual and no evident change has surfaced, yet employees are exiting left and right.
How to Reduce Employee Turnover?
Employee turnover is inevitable. From time to time, no matter how happy you keep your employees, some will relocate, some will retire, or change their job based on their own personal circumstances. There is however a healthy range. 15% or less turnover is considered healthy. But it is amazing how often we see rates much higher be justified as normal or worse, disregarded as the fault of the employee. Rising costs, increased competition and time necessary to hire and train new talent make retention of your top performers imperative to growing your bottom line.
Clear goal planning, skill development and a building a true pay-for-performance culture are some of the talent management practices that Center for Work Life utilizes for our successful clients to use to demonstrate their employees are valued.
While nearly all companies have turnover, certain industries have generally higher or lower rates than others. We keep an eye on these rates to ensure that they stay within a healthy range. Measuring your company’s turnover against averages for your industry can help you pinpoint areas you need to address, or potential opportunities.
Turnover Rates by Industry
In examining the 2012 turnover rates in the United States by industry, covering construction, manufacturing, trade, transportation and utilities; information, financial activities, professional and business services; education and health; leisure and hospitality; government. The average rates were 17.2, 10.7, 21.0, 15.2, 13.0, 25.9, 14.9, 35.5 and 6.3 percent, respectively.
Employee Selection Program Works Wonders for Customer Service Firm by Solving Turnover Problem…
A customer service company was continually fighting an uphill battle with employee retention. It was typical for this company to experience a 60% turnover rate with new employees during their first 60 days on the job.
They chose to focus on hiring the right people for the job versus attempting to keep the wrong people “on the bus”. This customer service company discovered the power of the Success Profiling System.
The result: no turnover for the last 60 days. The reduction in turnover is not the only benefit; because new employees are well fit for their job position, they are happier, as are those around them.
I have had the extreme pleasure of working with and referring clients to Farnaz. She is an eminently educated, meticulous, insightful and innovative professional. I have successfully referred clients to her who have been extremely satisfied with their results.
Financial Advisor at Ameriprise Financial