One metric often used to assess the health and attractive power of an organization is its turnover rate. Measured as the percentage of employees in a workforce who leave during a set period of time, turnover rate reflects employee engagement at a certain company. Turnover rate is a top concern for all HR professionals and organizational leaders. The question is, what can be done to sustain or improve the rate? What are the secrets of low turnover companies?
First, leadership needs to understand the reality of turnover. The average company loses 20-50% of its employees each year, and at any given time it should be assumed that 55% of an organization’s employees are searching for other opportunities.
To curb this trend, employee engagement is key. Companies with highly-engaged employees have turnover rates 31% lower than those with employees who are less engaged. Highly engaged employees are great for business too. In addition to being two times more likely to remain with the company, these employees are two times more likely to help a coworker without being asked, and three times as likely to go beyond expectations to do something positive for the company. Dedicated employee engagement programs have been shown to increase annual organizational profits by $2,400 per employee.
So how do companies nurture employee engagement? One tactic is to communicate openly with employees about their career paths. Empowering employees to set their own goals is more effective than top-down goal-setting. Also, work to build loyalty in the office. Remind employees their work is less about individual accomplishments and more about what the team can achieve as a whole. Loyalty is easily overlooked in modern workplaces–a surprising 80% of executives say promoting loyalty in their companies has never been a priority.
Engaging existing employees is one thing, but what about addressing the issue of turnover before another employee arrives or as the next employee departs?
Believe it or not, there are occasions when high turnover can be a blessing. Sometimes organizations outgrow their existing crop of employees and it makes sense to bring in a bunch of new people with new energy and new ideas. Just be sure to keep those people engaged once they arrive!
To learn more about employee engagement and retention, click here.