8 tips to reduce employee turnover: Why it’s so important

8 tips to reduce employee turnover: Why it’s so important

Reducing employee turnover should be a priority for any business. According to experts, it can cost twice an employee’s salary to recruit, hire and train a replacement. Turnover can also damage morale among your remaining employees, decrease productivity and make it harder to acquire new talent.

According to Work Institute, one in four employees (42 million U.S. workers) left their jobs in 2018 to go work for another organization. But companies with a culture that strongly values learning and team comradery have 30-50% higher employee engagement and retention rates than those that don’t.

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77% of those employees who leave could be retained if companies implement a few proven strategies to reduce turnover.

The annual cost of employee churn is expected to reach $680 billion by 2020. Organizations must have a vested interest in increasing employee retention rates—for a variety of reasons.

In this article, we offer eight tips to reduce employee turnover and reveal why it’s important for your organization to make employee satisfaction a priority.

What is employee satisfaction?

Employee satisfaction rates evaluate how happy or content your employees are with their current jobs and work environment.

High employee satisfaction rates result in high employee retention, morale, engagement, and productivity—all of which significantly contribute to an organization’s financial performance.

Employee satisfaction and employee engagement

Although I’ve just touted the benefits of employee satisfaction, there are also a few potential pitfalls. Let’s play devil’s advocate for a moment. What if your employees are happy or content with their jobs because they get paid to do the bare minimum, which means they’re not actually adding value to the company?

These employees may be unlikely to leave because they are “very satisfied” with simply going through the motions every day and making a good living doing it. Your company is also unlikely to let them go because they are just good enough to meet baseline expectations. Unfortunately, a lack of employee engagement stifles the growth of your company.

Engaged employees, on the other hand, energize your organization with new ideas. They push the limits, think outside the box and drive growth and innovation. Therefore, it’s essential to not only focus on employee satisfaction but also employee engagement as a strategy to retain only the best and brightest within your organization. Employee recognition programs give businesses the ability to recognize star employees in front of the rest of the
organization and reward them for their work. Plus, maintaining satisfied employees does wonders for your brand reputation management efforts as they will often promote your company to others.

The impact of high employee turnover

Not all turnover is bad. In any organization, there are some employees who are not adding value or simply aren’t a good fit for the company. When people like this leave, it’s a good thing.

However, when a company loses employees at a high rate or is losing high-value employees, turnover becomes an issue. Below are a few ways turnover can impact your company.

Lost revenue

Losing client-facing employees – such as salespeople and account managers – can put your company at risk of losing clients as well. If your employee had a close working relationship with the client, they might choose to follow the employee to their next company, leaving you in the lurch. Or, that relationship might be cut off, with no one picking up the slack, leaving the customer hanging and significantly damaging the customer experience.

Decreased morale

Turnover can also harm the morale among the employees who stay. Often, workers lose trust in the company’s management team if several employees leave in a short amount of time. Also, when an employee leaves, it may be necessary to ask their team members to cover the responsibilities of the departing employee. An increased workload may result in stress and further reduce employee morale.

Difficulty recruiting

Your HR team may have a more difficult time recruiting new talent if word gets out that your company has a high turnover rate. Losing all-star talent to other companies in your industry may also meaning losing your competitive advantage. Your company is only as good as the people who run it.

Decreased production

Whenever a veteran employee leaves your company, you’ll experience an unavoidable disruption in productivity. As noted, other employees may be pulled away from their regular responsibilities to fill in. Additionally, when you do find a replacement, he or she will likely need weeks, if not months of training before they begin the produce at the same level as the former employee. This costs the company additional resources, which start to pile up and amount to huge losses.

The loss of an experienced employee also comes with a loss of knowledge about how your company operates. Any new employee brought in to replace someone will likely make more mistakes in the beginning and therefore cost your organization more than the departing employee.

Top reasons for turnover

According to Work Institute’s 2018 Retention Report, 21% of employees leave due to a lack of career development opportunities. An additional 13% are unsatisfied with their work-life balance, and 11% of churn is caused by employee dissatisfaction with management’s behavior.

Other reasons experts claim employees leave their jobs include insufficient pay, lack of challenging work, and lack of recognition.

Tips to reduce employee turnover

Be clear in the job description

Believe it or not, reducing turnover starts way before an employee’s first day on the job. Many organizations aren’t great at clearly setting pay and benefit expectations within their job postings; most don’t include a pay rate at all.

Yet, 37% of hiring decision makers believe retention rates would improve if new hires were more informed during the hiring process. Don’t be afraid to state upfront what the salary range is as well as the benefits offered with the position.

Hire top talent

Hiring the right people from the start goes a long way to reducing employee turnover. Vet candidates carefully through interviews, background checks, references, and skill assessments.

Consider not only their education and experience but also their soft skills. Do they play well with others? Are they fast learners? Do they have a positive attitude? Ensure that they will fit in with your company’s culture and mesh well with their co-workers and management team.

Invest in a better onboarding experience

Once someone accepts your job offer, the hard work isn’t over. Investing your resources into properly onboarding every new employee is vital. According to Gallup, only 12% of U.S. employees strongly agree that their company does a good job of this. That’s a problem.

Don’t bring a new face in and just let them fend for themselves. Show them around the place, make sure they’re set up on payroll and that they receive all of their benefits.

Ensure they understand all established processes around their role. Also, set clear expectations of what you expect from them for their first week, month or quarter and provide them with the tools they need to be succeed.

First impressions are incredibly important—they set the tone for the entire relationship between the company and the employee. So, make them count.

Pay appropriately

The number one reason people work is to make money—everyone needs a livelihood to survive. And while money is not always the top or only motivator for your employees, no one can argue its significance.

Employees who feel they are underpaid are far more likely to leave than those who think they are compensated fairly for their work. With that stated, if your budget is tight, you may have to get creative with your benefits package to make up for it.

You can also counterbalance lower pay with providing an encouraging work environment that focuses on positive reinforcement and motivation so that your employees feel inspired and have a desire to move the company forward.

Increased flexibility

Over 75% of workers would be more loyal to their organization if it offered flexible work options. Moreover, 77% of employees said they were more likely to accept a new job offer if they could telecommute at least some of the time.

To reduce turnover, consider the personal needs of your employees, offering more flexibility where it’s feasible and appropriate. Options include telecommuting, flexible schedules, job sharing, and on-site daycare.

Cultivate employee engagement

Above, we touched on the importance of employee engagement. Ways to increase workplace engagement include creating a rewarding work environment, treating employees with respect, providing opportunities for advancement and offering education and training.

We also suggest implementing a formal employee engagement program. This can include initiatives like employee volunteer events to build rapport among your team. You can also establish a matching gifts program where you match any donation an employee makes to a charity.

Companies with a culture that strongly values learning and team comradery have 30-50% higher employee engagement and retention rates than those that don’t.

Show appreciation

Another way to increase employee morale and reduce turnover is to recognize and reward employees for a job well done. Inject positive feedback into your organization by simply sending an email praising your team or an individual contributor after a successful project or closing a big sale.

Send your employees a monthly or quarterly email newsletter highlighting the achievements of your team or organization. Send a thank you note or a small gift to a stellar employee who goes above and beyond his or her responsibilities to help the company succeed. A little recognition goes a long way.

Offer opportunities for advancement

Outline clear career paths for your employees. Show them exactly where their job could take them and the steps to get there. Use annual reviews and quarterly check-ins as an opportunity to find out what path employees desire to take as well as what path would be most appropriate for their experience and skill set.

Also, have an open-door policy where employees are encouraged to come to the leadership team at any time throughout the year for career guidance.


High employee turnover hurts your company’s bottom line. By adopting the strategies outlined above, your company can retain more of its workers and avoid suffering a dip in productivity, morale, and revenue, which plague companies with high turnover rates.

Which one of these strategies will you adopt in your company this year? Let us know in the comments section below!


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