September 2018 Newsletter Articles
Employee Turnover Statistics and What it Costs Companies
by Danielle Pelose
Two of the most important metrics to consider when evaluating employee turnover statistics is the reasons why employees leave a company and the cost of high turnover. Although there are factors beyond a company’s control, companies directly impact numerous aspects that lead to turnover rates. For instance, Paychex reports that nearly 70 percent of employees indicate that they left their company due to low salary while 53 percent also admit that they felt employers didn’t care about them as an individual contributor.
Effects of Employee Turnover
Why is this so important to your company? Research shows that millennials are more inclined to accept a new offer if it promotes higher wages, flexible schedules and growth opportunities. In fact, Recruiting.com has reported that from 1983 to 2016, U.S. workers from ages 25-34 consistently show the shortest tenure with a high of 3.2 years in 2012 and a low of 2.6 in 2000. This means that in addition to new roles, HR departments are constantly worried about back-fill. Further, according to a study conducted by the Society for Human Resource Management, employers will often end up spending six to nine months of an employee’s salary to locate and train a replacement for them.
What does this all mean?
Turnover leads to production loss – which also equates to money loss. If a business is growing or in a high turnover industry, it must take recruitment seriously. If the business takes recruiting seriously, it must choose a vendor that takes recruiting seriously. The best way to maintain a healthy turnover ratio is to ensure that your company has the right tools to reduce turnover altogether.
How to Reduce Employee Turnover
Select the right people: The Harvard Business Review points out that as much as 80 percent of employee turnover is due to bad hiring decisions. If recruiters aren’t finding top talent, then hiring managers can’t select the best candidate for the role. This is a formula for disaster as it often leads to a lackluster employee who may not be committed to the company vision. Hence, they are less likely to commit to being a long-tenured employee.
How can you make sure your selecting the right people?
You can start by implementing assessments that align with your company’s vision and culture. Make sure you’re hiring a person with the right skills and the right attitude by employing someone who is passionate and driven about their everyday tasks as well as the “bigger picture”. It’s also important to reiterate these passions in weekly 1-on-1 meetings between staff and managers, quarterly company meetings, performance reviews, and career path discussions. If you hire a passionate, hardworking person, that’s great, but make sure they stay that way by checking-in and doing so often. Employees can easily become discouraged if they never hear from management about upward mobility or opportunities for personal growth – especially if they deserve it. Offer competitive wages and benefits: When it comes to money, every penny counts. With technology such as Glassdoor’s salary calculator, people have access to industry standards regarding fair wages and benefits for their particular role and can even pinpoint that number to their location. Having all this information allows candidates and current employees who are browsing open requisitions to find out if what they are earning is a fair market value. If an employee finds out that they are worth more than what they currently earn, they will quickly begin filling out those online applications to see if they can get a better offer somewhere else.
How can your company prevent this from happening?
Start by offering competitive wages and benefit programs. Ensure your HR department is not only offering fair wages and viable benefits, but that they are also creating growth plans and sharing pay grade information with the company. If an employee knows what his/her career trajectory is, they may feel more confident in growing within the company.
5 Reasons Why Your Employees are Quitting
by Ceren Cubukcu
by Ceren Cubukcu
Retaining talent is as important as attracting new talent because job-hopping can actually be very costly for the employer. Therefore, employers should always be in touch with their employees and understand why their employees stay and, for the quitters, why they quit. Below I have put together the most common reasons of why employees leave and how an employer can avoid this situation.
1. Low compensation
Everybody wants to get paid what they deserve, and when an employee finds out they are getting paid lower than the market value, this person feels undervalued and wants to leave. As an employer, if you want to keep an employee who is getting paid lower than the average, you either should have a great company culture or a well-known brand recognition. Otherwise, as soon as your employee finds another job with higher compensation, they will leave.
2. Lack of career advancement opportunity
Employees always look for new opportunities to advance their skills so that they can move up the career ladder. Especially employees from Generations Y and Z want their employers to provide them training options or rotational programs within work so that they can improve themselves. Therefore, if an employee feels that work has started to become routine or the managers don’t give importance to his/her progress, they will want to leave.
3. Relationships with co-workers and managers
Employees do not leave companies -- they leave their managers and co-workers. If an employee has problems with their manager, then it means that this employee will most likely leave soon. Also, if an employee doesn’t have any friends at work whom they chit-chat or go to lunch with, this employee is most probably not happy with their job and may soon leave the company.
4. Job security
Nobody wants to work in an environment in which the future of the company is unclear. Employers should demonstrate stability and growth to their employees. One way they can do this is by sharing financial reports with them quarterly or informing them via monthly newsletters. The important point is to be transparent to your employees so that they can feel secure in their jobs.
5. Pursue other opportunities
Sometimes your employees leave because they want to pursue other career opportunities. They may want to make a career change or go to graduate school to make an academic career, or they may want to found their own businesses. Therefore, no matter what you do, sometimes you cannot stop them because of their personal goals or life events.
1. Low compensation
Everybody wants to get paid what they deserve, and when an employee finds out they are getting paid lower than the market value, this person feels undervalued and wants to leave. As an employer, if you want to keep an employee who is getting paid lower than the average, you either should have a great company culture or a well-known brand recognition. Otherwise, as soon as your employee finds another job with higher compensation, they will leave.
2. Lack of career advancement opportunity
Employees always look for new opportunities to advance their skills so that they can move up the career ladder. Especially employees from Generations Y and Z want their employers to provide them training options or rotational programs within work so that they can improve themselves. Therefore, if an employee feels that work has started to become routine or the managers don’t give importance to his/her progress, they will want to leave.
3. Relationships with co-workers and managers
Employees do not leave companies -- they leave their managers and co-workers. If an employee has problems with their manager, then it means that this employee will most likely leave soon. Also, if an employee doesn’t have any friends at work whom they chit-chat or go to lunch with, this employee is most probably not happy with their job and may soon leave the company.
4. Job security
Nobody wants to work in an environment in which the future of the company is unclear. Employers should demonstrate stability and growth to their employees. One way they can do this is by sharing financial reports with them quarterly or informing them via monthly newsletters. The important point is to be transparent to your employees so that they can feel secure in their jobs.
5. Pursue other opportunities
Sometimes your employees leave because they want to pursue other career opportunities. They may want to make a career change or go to graduate school to make an academic career, or they may want to found their own businesses. Therefore, no matter what you do, sometimes you cannot stop them because of their personal goals or life events.
