When an employee departs a small business, it can cause disruption and leave you scrambling to keep your company operating smoothly. Your first concern is most likely getting their workload covered immediately. Because, until then, you and other members of your small team will need to pick up the slack. Which could cause frustration, mediocre performance, and additional employee turnover.
When you add up the lost productivity and hiring expenses, it can cost you $4,129 on average, and it’s not just your bank account that takes a hit. When retention rates are low, your company’s morale can take a dive too.
Employee Turnover Can Cost You. A Lot.
Not only does employee turnover cut into productivity, but it can increase stress levels on the team and disrupt established workflows. Understandably, when your employees become overworked, then they can become overwhelmed. This scenario, with stressed and overworked employees, could further exacerbate high turnover at your company—now you’ve got a wave of workers heading for the doors.
Needing to fill positions as soon as possible means spending time, effort, and money on recruiting. The DIY method of placing a job posting on sites like Craigslist is an option, but most business owners understand that the best way to find qualified candidates is to pay for their job ad to be listed on professional pages such as LinkedIn® or Indeed®.
You will need to devote time to write a well-thought out job description, filter through applications, conduct phone screenings, and schedule in-person interviews. Chances are you’re already juggling a now-larger workload, which might inspire you to. Consider hiring a recruiter to expedite efforts to find your new employee. But, keep in mind that this will come with additional expenses that you’ll need to consider as well.
The main takeaway for small business owners is that the cost of employee turnover really adds up. All things considered, some studies, show that employee turnover can cost more than the salary of an employee.
No matter what job posting sites you find your next potential employee on, the best employees are the ones you screen before hiring. Using an online background screening service like ShareAble® for Hires gives you comprehensive insights into your applicant’s financial and criminal background, as well as verify their identity.
Tips on How to Reduce Employee Turnover
For small business owners, high employee turnover can hurt their bottom line in terms of additional costs, lost productivity, and impaired employee morale. If left unchecked, then a high employee turnover rate can pose a major threat to your company’s livelihood. Below are some tips that can help you retain your best employees.
Hire the Right Employees from the Start
If you suffer from unexplained employee turnover, then you might be hiring the wrong employees from the start.
Sure, a job candidate may look good on paper and could perform well throughout the interview process, but employees who are quick to jump ship without good reason probably could—and should—have been weeded out during the hiring process. While you can’t expect to make the right hire 100% of the time, you can tighten up your recruitment process to improve your chances of onboarding a productive person.
Craft more transparent job descriptions. If your job posting is too vague, then you might attract candidates who are unprepared or ill-suited to your business. Potential candidates should have a clear picture of their responsibilities before submitting their resume. . Otherwise, if they are hired, they might resign if the role, company, team, or culture failed to meet their expectations.
Expand your professional network. To hire the best employees in the market you need to reach the top talent. There are several strategies for casting a wider talent net. One way is to attend—or host—industry-related gatherings. You’ll bring people to you, make new connections, and raise your company’s profile in the community.
Use social media: According to Pew Research, younger generations in particular—86% of 18-29 year olds—use a form of social media. Posting your open position on a channel such as Facebook® can help promote your job ad and get a great deal of quick exposure.
Pro-Tip: Before you leverage social media to source new job applicants, be sure to tap into your own employees for referrals. Additionally, incentivizing your own employees to refer new talent from their professional networks in the form of cash bonuses or other non-monetary rewards could increase your volume of quality applicants.
Refine the interview process. If you currently only conduct one-on-one interviews, then consider implementing panel interviews. Panel interviews allow multiple members of your team to ask a variety of questions and evaluate your potential job candidate’s skill set from different angles. Doing so could help to reduce employee turnover by ensuring that your team has asked the questions they want to ask, and that all internal stakeholders have a clear picture of the candidate’s background, experience, and potential fit at your company.
Use thorough pre-employment screening. Enlisting the help of a legitimate pre-employment screening service like ShareAble for Hires can help provide insight on your job candidate’s background, which enables you to gather important information such as credit history and prior criminal convictions.
By performing a thorough background and credit check on a new hire, you’ll gain the information you need to make a more informed and confident hiring decision.
Offer Competitive Compensation and Benefits Packages
Another tactic to help reduce employee turnover is to make yourself an attractive employer to work for in terms of total compensation and benefits offered.
Provide standard benefits. If your small business is still in its infancy, then you might not be able to afford big salaries. In this case, offering standard benefits—such as medical, dental, vision insurance—is all the more important.
Do market research. A little bit of investigating on sites such as GlassDoor® can shed some light on what your competitors are paying their employees on average. Even if your employee is happy at your company, they could become a flight risk if they can make significantly more money at a similar company by performing the same work. Try to match your competition as closely as possible.
As a side note, be sure to educate your employees about your total compensation package – vacation days, bonuses, charity matching, and other monetary contributions such as 401k matching or discretionary bonuses. This way your employees can accurately compare your company with others.
Promote company-specific perks. Maybe a retirement or health plan isn’t within your means, but you can still reduce employee turnover by offering unique perks that make your business an attractive place to work.
You might be surprised by the importance that employees place on having a dog-friendly office or remote work opportunities. Get creative with your offerings while making sure to appeal to your employees’ preferences and staying within your budget.
Recognize and Celebrate Employee Success
You may be less likely to experience employee turnover if you team members feel appreciated and valued. Here are a few ways you to help accomplish this:
Set quarterly goals. Having goals and accountability can help encourage your employees to be more motivated and driven. Review these goals on a routine basis and use them as a way to encourage your employees to reach benchmarks. If you help your employees achieve a sense of accomplishment, then you may further enhance their satisfaction with the job.
Recognize solid performance. Congratulate your staff when they do exemplary work and let them know that their dedication does not go unnoticed. Be sure to recognize achievement when it is truly noteworthy, otherwise your genuine accolades could lose importance when given out arbitrarily.
Create incentives. Motivate your team by giving them something to look forward to if they achieve their goals. Your employees may find they get work done more efficiently if they know rewards are in sight. This could be in the form of a catered lunch, team outing, ballgame tickets for the family, or anything else you think would be of value to your employees.
Create a positive environment. Do your best to foster a healthy, positive atmosphere for your employees. Encourage their efforts, promote teamwork, and encourage collaboration. Good attitudes can go a long way for retaining good employees.
Employ Herzberg’s theory. Psychologist Fredrick Herzberg theorizes that certain characteristics—such as achievement and responsibility—are consistently related to job satisfaction, while other factors—like status and supervision—are related to dissatisfaction.
Consider applying Herzberg’s motivation-hygiene theory to your workplace. You may be surprised at the rate in which your employees’ happiness (and tenure) dramatically improve.
Provide Opportunity for Career Growth
Another factor that could be contributing to your employee turnover is the lack of upward mobility. Retain your staff longer by showing and helping them on a path to promotion.
Keep employees engaged. If your employees are passionate about their work and enjoy their work challenges, then they are more likely to experience higher job satisfaction and stay for the long haul.
Consider these different employee engagement strategies:
- Get to know them and their interests outside of work
- Give them the tools to succeed
- Update them frequently with company news and progress Encourage collaboration with team projects
- Support the authority you have granted them
- Continue to encourage personal growth
Not only are engaged employees likely to stay longer, but they’re more likely to increase revenue every year. Here are few ways you can help your employees feel more engaged:
Provide training opportunities. Allow and encourage your employees to attend conferences, workshops, and networking events that are relevant to their role. An interest in growing their skill set is something you’ll both benefit from, so be sure to sponsor applicable opportunities whenever possible.
Fund seminars and webinars. If sending your employees to conferences and trainings challenges your budget, then consider paying for seminar or webinar courses—it could be more affordable and well-worth your investment. Don’t forget, it’s important to keep your employees up to date on market trends.
Overall, participating in seminars and learning from leaders in your industry, or being able to learn specialized niches from home, is a prospect that could excite your employees all while improving their performance.
Pro-tip: After an employee attends a seminar, training or webinar, schedule time to chat with them about what they learned. Ask about what new information and knowledge was gleaned that can be leveraged in the workplace.
Emphasize career opportunity growth. According to The Society for Human Resource Management, 63% of professionals would rather get a promotion with no pay increase than a pay bump without a promotion. Be sure to show your employees how they can climb the ladder of success. Be transparent about what they need to do to get to the next level so they’re encouraged to stay and progress in their career—at your With a promotion, employees should expect to have more responsibilities, more freedom and ultimately, more future opportunities.
Retain the Best by Hiring the Best
No matter what you do, you have to expect some degree of employee turnover. People relocate, make career changes, and take time away from their career for personal reasons. But, as we demonstrated above, there are a wealth of strategies and tactics that you can employ to reduce turnover to a manageable level.
While these things can help you retain your best workers, one of the most crucial steps towards reducing employee turnover starts by making a good hire from the start. Background screening with TransUnion ShareAble® for Hires provides you with critical information that can help small business make more informed hiring decisions. ShareAble for Hires offers background checks and criminal reports all online, on demand. Reports are delivered to your inbox in a matter of minutes which enables you to choose a great candidate with more confidence today.
Sign up now, receive reports now, and make smarter hiring decisions now.