Tag Archives: reduce turnover

Minimize Employee Turnover by Understanding Why People Quit

A high turnover rate is toxic to your business’s success and longevity. Not only is it frustrating to have to continually replace employees, it can be quite costly.

In fact, a study from The Center for American Progress found that, “The cost of losing an employee can range anywhere from 16% of their salary for hourly, unsalaried employees, to 213% of the salary for a highly trained position.”

If a person earns $40k annually, this translates into a loss of $6,400. In order to minimize employee turnover, it’s necessary to understand what makes people quit.


Poor Relationships With Managers

The vast majority of people quit because of their manager. It’s not that they necessarily hate their job, it’s that there’s friction with their boss. Information from The Wall Street Journal reports that, “About half of employees had left a job at some point ‘to get away from their manager.'”

It should be a top priority to educate your managers on how to build strong relationships with employees. They should develop excellent communication skills, be able to deliver consistent feedback and treat employees with respect. If you can overcome this obstacle, you’ve literally won half the battle.



High employee expectations and an overarching vision for your company is great. However, when you or your management team “hover” causing your employees to walk on egg shells, it can be incredibly draining. In fact, dealing with chronic micromanagement is another main reason why employees decide to leave.

An article on Forbes suggests, “Employees whose ‘hands are regularly tied’ are 28% more likely to think about greener pastures elsewhere.” This can be particularly frustrating for younger millennial workers who don’t typically like relinquishing full control to a superior.

The key is to find the right balance between delegating tasks and allowing employees to utilize their own creativity and talent. Be sure that you’re giving employees a sense of autonomy in their jobs and they’re more likely to stay.


Lack of Development Opportunities

Most people have a desire for at least some level of personal growth and progress. When there’s stagnation, engagement and overall job satisfaction tend to decline. If your employees feel like hamsters going around in a wheel but not getting anywhere, this can lead to disillusionment.

Consider the following:

  • Promote from within
  • Continually challenge your employees to trigger growth
  • Give employees a chance to showcase their skills and talents
  • Develop existing skills
  • Offer career advancement opportunities
  • Offer periodic raises


A Lousy Culture

There’s also the issue of culture. According to the same article on Forbes, “Employees who give their work culture low marks are nearly 15% more likely to think about a new job than their counterparts.” If your culture stinks, don’t expect many workers to stick around for the long haul.

Fortunately, there are several ways to improve your culture. Some examples include:

  • Hold team chemistry-building events (e.g. company outings, recreational activities, etc.)
  • Reward consistent production
  • Be sensitive to the needs of employees and accommodate them whenever possible
  • Offer flexible scheduling

If your turnover rate is too high, it’s something you should address right away. Understanding the most common reasons people quit puts you in a better position to minimize employee turnover and build a strong foundation of loyal workers.




Improve Your Bottom Line By Minimizing Employee Turnover

A good employee is neither easy nor inexpensive to replace. However, some employee turnover is good and is an essential part of any business. Those that do well are promoted, those that under-perform are let go.

This type of employee movement is good for an organization, it puts the talent in the right spots and makes room for new growth. But what happens when you start to see too much employee turnover? While not uncommon in the hospitality and entertainment industries, when you lose employees at a high rate, it can start to cost you.

Retaining an employee is much cheaper than hiring a new one, not only because of lost time and the cost of the hiring process but also because new employees are inexperienced and must be trained before they can be fully productive. With inexperience also comes an increased potential for injury, which can raise the number of workers’ compensation claims filed by your employees. This can result in hefty insurance rate increases.


The Cost of Turnover

Hiring processes have become increasingly more complex over the years. There is a substantial amount invested in even considering an applicant for a certain position. Besides the time put in by those doing the hiring, things like drug screens and background checks add to the cost of bringing on new employees.

However, even though these processes slow down the progression, it is important that you hire employees who will not become liabilities for your company in the future. The background checks, in-depth interviews and other safeguards increase your chances of getting a valuable employee are essential.

On the other hand, the search for suitable employees can leave positions vacant for a significant amount of time, causing a loss in productivity along with other general interruptions to your operations; it is important to weigh the risks of hiring a potential liability against the risks of employee shortage.

Even after a new employee is hired, replacement costs may still continue. Regardless of their experience in the field, new employees must be trained in the specific requirements of the position. During this time, they will not be as productive as other employees. Since they are working in an unfamiliar environment, new employees are also at an increased risk for getting hurt at work.

Jobs may present unique hazards that are unknown to the new hire, increasing the chance for an injury that will result in a workers’ compensation claim. A high number of workers’ compensation claims mean an increased cost to your insurer. Insurance providers take this into account when deciding coverage cots for companies with high employee turnover, which can mean higher premiums for you.


Preventing Turnover

If you have productive employees who do quality work, the financial benefit of keeping them around is obvious. The key to reducing costs and keeping premiums low is hiring the right people from the start, investing money in effective training and emphasizing the importance of safety on the job. Job satisfaction also plays a key role, so keeping employees happy will also play an integral part in  protecting your company’s bottom line.

Retaining a productive and experienced staff can go a long way in your cost-saving efforts. Not only do you avoid hiring costs, but experienced employees allow your company to operate at a much safer level. A safer workplace means fewer injuries resulting in workers’ compensation costs, saving you money in the long run.