The current unemployment rate in the US is at a historic 3.6%. While the booming economy is better for the country, it has made it easier for employees to quit their jobs and look for better opportunities.
High employee turnover has become a problem for employers; the Department of Labor has found that employee tenure has decreased, causing companies to lose thousands of dollars every month. Research shows that every time a company has to replace an employee, it costs them 6 to 9 months of salary to recruit and train their replacement.
In a competitive business environment, it’s that much more important for companies to retain their employees. Companies with high employee turnover should look into why staff members are choosing to leave instead of continuing their jobs.
Here are 5 reasons your retention rate could be low:
Personal Issues Are Preventing Them Continuing Their Jobs
A LinkedIn survey revealed that 25% of employees were leaving their jobs due to personal reasons. These reasons include dependent care (like taking care of a sick parent, kids, etc.), differences with coworkers/supervisors and other family matters (like going through a divorce).
While it may look like many of these problems aren’t in your hand, there are things you can do to support your employees.
Implementing employee assistance programs (EAP) and training supervisors to be more empathetic can assure your employees that you have their best interests in mind and you consider them a valuable asset to the company.
They Don’t See the Point
Yes, that’s right, some employees quit their jobs just because they simply don’t see any benefits to it. They may have other sources of income or a financial cushion that allows them to leave their jobs without having another one lined up.
Many employees—especially millennials, aren’t motivated by just a salary. Contrary to what many employers think, salary isn’t a top motivating factor for employees. Research by the Analytics in HR found that the salary is the lowest factor for employee turnover; only 1% of employees leave their jobs due to dissatisfaction with their salaries.
Salaries may not be a motivational factor, but employees will stay at a job because of the benefits they offer such as health insurance and flexible working hours.
Everyone’s heard of the saying “people don’t leave jobs, they leave managers”.
A manager that may prove to be profitable for the company, could be awful to their subordinates which, in turn, can hike up the turnover rate.
If you have a department in the company that sees people come and go all the time, ask your HR staff to look into how the manager treats their subordinates. Keep in mind that every resignation is costing your company heavily; if the expenses exceed the benefits of keeping a manager, then consider training them or replacing them.
Toxic Work Environment
As an HR executive or a manager if you notice that your company has an unusually high turnover rate, then consider speaking to employees in confidence and ask them about the issues they’re facing.
Issues like long-working hours, harsh treatment of employees, excess amount of work, lack of growth, etc. should be addressed.
Other red flags of a toxic environment include lawsuits, incidents of sexual harassment, evident discrimination, wrongful termination claims and negative feedback in interviews. When employees claim they’re leaving due to toxic culture, do something about it.
It may not be the top reason but low wages still force employees to quit jobs and look elsewhere. Employers that offer salaries that are below average then you should expect a high turnover unless your company can boast a positive organizational culture.
The IT industry specifically has an extremely high turnover which costs business hundreds of thousands of dollars every year.
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