Three Steps to Reduce Employee Turnover

Is There Anything You Can Do To Reduce Employee Turnover?

When you ask someone about their ideal job the answer you sometimes find is that it’s usually not the current profession they are in. Why?

Employees Quit For More Pay

The answer relates to more money, better benefits, advancement in job position and more vacation time. 24% of people change jobs because of pay. To make matters worse, statistics show that over 50% of the population hate their job and low employee engagement is costing businesses $300 billion every year.

With the unemployment rate at an all-time low, manufacturers face the threat of losing some of their best assets to these factors. Having a business that people want to work at is a win-win for everyone. If you don’t know who SAS is or how they are a prime example of a good work environment, I’ll just use their employee turnover rate as an example. The industry average is 22% annually while SAS has a 2-3% annual turnover rate and is known for being one of the worlds best places to work.

Follow The Footsteps

So how did SAS achieve this, and more importantly, how can you achieve this? Your employees want to be valued and feel like a contributing member to the organization, otherwise, they have no purpose. In 2008, the recession caused several other software companies to lay off employees. However, Jim Goodnight, CEO of SAS assured his workforce that no one would be losing their job. The company again had a record year, all from the establishment of value and security. Remember that people who have a purpose in their work will always engage more than those who want a paycheck, simply because that’s ultimately what leads to them leaving, more money or an advancement position.

So how can manufacturing companies give their employees a purpose? Three steps that can help reduce employee turnover but before we cover those, you will need to do some assessments first.

Calculate Employee Turnover

You need to know how much employee turnover is costing you. What is the total cost of onboarding, training, equipment..etc? The harder assessment is measuring how much you lose in productivity. Dividing your employee’s salary by the amount of lost time from them leaving that position will give you the answer.

Once this is calculated, you will have a clear picture of how much you can save by reducing this. This also allows you to break down the minuscule costs associated with employee turnover which gives you a better understanding of what approach to use when beginning to take action.

Another important assessment before you start the three steps to reduce employee turnover is understanding why employees leave. This is vital to know what aspects of your work environment need improvement. Conducting an overall quality assessment on your internal environment also helps foster communication within the business. If employees have opinions they should be heard because your goal is to make them feel valued.

Now that you know how much employee turnover is costing you and what your employees like and dislike, it’s time to start building a system that will meet your goals.

The Three Steps

1.  Don’t Hire Quickly, Hire Quality

It’s hard to be picky when you need to fill a position as fast as you can but take a step back and remember, it’s not about the short run it’s the long run.

Take Chick-Fil-A for example, they are known for their exceptional customer service and are one of the most popular fast-food restaurants in America. Their hiring process typically takes about a month, consisting of three separate interviews while most other fast-food chains average about a week or less. Chick-Fil-A’s brand thrives not only because of their delicious food but because of their reputation with the treatment of every customer.

   2. Respect Your Employees Personal Life

Not giving your employees a break when it comes to things as simple as leaving early can cause resentment. Collaborating with employees to create a work-life balance is essential for building a win-win environment. If your floor manager needs to leave early on Thursday to take her son to soccer practice, allowing that will earn the company respect and trust. Managers in your organization that have high employee turnover under their supervision should be retrained. Managers who are respected and have a good track record with employees should be rewarded. This is a good way to build a culture that reinforces positive actions within the organization.

  3. Reinforce Your Employees

As previously stated, having a culture that reinforces positive actions is vital for internal improvement. One aspect of this is recognizing employees for their contributions. Remember how employees want to be valued and have a purpose in their work? Building a culture that supports your employees is the most important in getting them to stay.

These tactics are simple yet highly effective if consistently practiced. Of course, it’s easier said than done so transitioning takes time and proper implementation. Assessing the problem is most important so properly addressing the problem before you act will serve as the biggest help.

To bring this article to a close, remember that if employees have a purpose there is no reason to ever leave. Not everyone’s passion is going to be manufacturing, so it’s up to you to sell them on why they should work for you and stay, just like you would for a customer. Understand your employees by getting to know them during the hiring process. By taking your time you can find what it is that they truly want from a career. Notice I said career, not job. It’s better to be a listener today because hearing people are so much more important than demanding from them. Value your employees and they will value you.