No one wants to lose a good employee. The costs associated with losing a single worker can be astronomical for many small businesses. And if your organization develops a reputation for high turnover rates, you could find yourself in a lot of financial trouble. Whether you have an established small business or you’re planning to launch your own startup in the near future, you may want to take a closer look at what causes employees to leave — and take steps to prevent that from happening.
Whether you consider a position to be entry-level or expect highly qualified candidates to apply, everyone deserves to be compensated fairly for the work they do and the skills they bring to the table. If you’ve gotten feedback from employees that the low pay was a factor in their decision to leave, you should conduct an assessment as to whether your wages are on par with similar positions at other businesses in your area. If an increase in pay isn’t really an option don’t forget that there are other ways to attract candidates. Benefits packages, paid time off, retirement plans, and bonuses can often make up for a lower wage. In fact, some employees would gladly agree to a lower paycheck in favor of better health insurance and paid vacation days. Considering that one in every three people goes to work when they’re sick, your employees might be more inclined to stay if they’re given paid sick days (which will ultimately allow your business to be more productive, too).
No Career Development
Business owners will do well to think of employee retention in a long term sense. You can’t expect a great employee to stay in the same position forever. They’ll eventually master all the skills they need to do their job well. If you aren’t providing opportunities for them to grow — either within your company or as a professional in the workforce — they’ll likely get bored, be less productive, and may eventually decide to leave. Keep in mind that disengaged or unhappy workers cost the North American business economy well over $350 billion annually in lost productivity.
If your company doesn’t currently have options for upward mobility or professional development, you’re doing a disservice to both your business and your employees. It should be your mission to keep good employees around for as long as possible. Instead of losing them to other organizations with greater opportunities, invest some effort into developing leadership programs and career growth efforts. Not only will this make employees know you care, but you’ll be able to focus on your own business’s success at the same time you foster theirs.
Poor Hiring Practices
Hiring mistakes can happen at any organization — and they’ll cost you. Approximately 22% of new hires leave their jobs within the first 45 days, which is bad news for employers. You may end up wasting a lot of time and money training a new employee, only to realize that the job may not be a good fit after all. Whether it’s you or the employee who makes this realization, the costs of a bad hire can be a lot more substantial than you’d think. In addition to losing money, you could end up making a mess of your company culture; teams may start to feel frustrated if new hires are inexperienced or a poor fit for the job and the culture. That could actually end up leading to additional turnover. If this happens frequently, you’ll need to take a closer look at your hiring process. If you’re so desperate for help that you end up hiring the first person who applies, regardless of their experience or interview skills, you’re going to end up making the same mistakes over and over. Examine your job listings carefully to make sure the job description is accurate and that your wording has no hidden biases. When vetting candidates, make sure they’re a good match in terms of skills and cultural fit. Consider elongating the interview process, as well, to ensure you’re able to take your time and find the best people possible for the job.
Lack of Faith in Management
It’s not always the direct actions of an employer or a poor hiring decision that makes an employee decide to leave. It could be due to your managers and their inability to communicate clearly, treat employees fairly, or provide helpful feedback. If some employees aren’t being held accountable, forcing others to pick up the slack, that can breed resentment. Or if hardworking employees aren’t getting the feedback they need to succeed — or if they aren’t really being told anything — they may leave out of frustration. Not everyone can be an effective leader right away. In fact, it usually takes a lot of practice. Prioritize manager training in terms of communication, motivation, and upholding company standards. The clearer you are with your managers as to how they need to perform, they’ll pass on this clarity to your other employees, which will keep everyone engaged and invested in the business.
Feeling Overworked and Under-Appreciated
Americans in the workforce are reportedly feeling more stressed than ever. In fact, 43% of all adults suffer adverse health effects from stress. That can easily lead to absences, lost productivity, and total burnout — all of which contribute to high rates of turnover. And when employers fail to recognize the efforts of these employees, that only makes matters worse. This problem comes down to employee expectations, workload, and culture overall. You may want to consider sending out an employee survey to obtain some valuable feedback that may be needed to fix your culture. You may also want to think about establishing an employee recognition program and providing support options (such as regular one-on-one meetings) to ensure you don’t lose great employees due to total burnout.
Understanding the reasons behind your high turnover rate may not always be pleasant or easy. This will require you to take an honest assessment of your business and really identify what needs to be improved. But this is truly the only way to help your business grow while encouraging valuable employees to stay for the long haul.