High Employee Turnover: How Businesses Can Reduce it
Employee turnover isn’t just on the rise, it is on fire. In April of 2021, the US Department of Labor reported the highest recorded voluntary separation rate in history at 2.7%. Then, just a few months later, in August, the US hit a new record of 2.9%. September broke the record again with a 3% voluntary separation rate. October saw a slight decrease and came in at 2.8%.
It is fair to say that people no longer fear being seen as “job hopping”. And why would they? Job seekers can be choosy, as workers are in short supply. In October 2021, the Bureau of Labor Statistics reported that there are 7 unemployed persons for every 10 open positions. That means your top performers can go elsewhere–easily.
What’s Causing The Rise In Employee Turnover?
Why are people leaving and are the reasons today any different than they were pre-pandemic? Pre-pandemic, 90% of departing employees reported that they left due to issues with their boss, their work activities, their work environment, or the company culture. The pandemic forced people to stop running the rat race for just long enough to figure out that they didn’t want to race at all, or that they wanted to try a different racetrack.
What is driving people to leave today is burnout. It is the number one reason employees are leaving en masse and is a direct result of workplace stress that goes unmanaged. Employees who previously would tolerate an uncaring boss, unfulfilling work, unreasonable time pressures or workload, and an unempathetic workplace culture are no longer able to or interested in doing so. Money is NOT what is driving people today to quit their jobs or exit the workforce altogether. Families are returning to single-income households and people are leaving higher wage jobs for lower wage jobs that fulfill them.
How Employee Retention Can Be Improved
Putting out the fire and reducing turnover begins with good employee selection practices. Keeping those employees requires sustained effort to ensure that they are getting what they need in the workplace, thus reducing the probability of burnout.
While finding and hiring good employees can be difficult, time consuming, and expensive, the cost of not doing so is even higher now. Today, it is no longer a matter of replacement costs needed to account for the outgoing employee’s salary and lost productivity. Job seekers can be choosy, and they know it. Employers are finding that they must spend more on base wages, additional sweeteners like hiring bonuses and increased vacation time, transportation costs, and other non-wage benefits to attract talent to the company or convince employees to stay.
By hiring right, employers ensure that the new employee is a good match for the role. Interviews are the standard in applicant screening, but these are not truly an objective measure of a person’s skills, abilities or how they will actually perform on the job. Job applicants often sell themselves by exaggerating their backgrounds or outright lying during the hiring process. Over 50 percent of employees believe that lying during a job interview is acceptable. For employers that rely heavily on the résumé and job interview for making hiring decisions, this is a disaster in the making.
Adding pre-employment testing to the hiring process can dramatically reduce the number of bad hires. But not all pre-employment tests are equal. Careful design of the assessment battery is critical. Tests should be based on the role and measure those skills, abilities and work behaviors that are most important to success. These factors cannot be assumed based on an individual’s experience or educational background and even the most experienced interviewer will have difficulty gauging these during an interview. Pre-employment testing can even help employers select employees who are predisposed to being engaged.
What Are Employers Doing to Retain Employees?
A Gallup survey of 400 companies found that an employee’s relationship with his/her direct boss has more impact on retention than either pay or job perks. This means that companies in today’s market must pay close attention to the interpersonal skills of supervisors and managers. Employees want their boss to be competent, optimistic about their company, trustworthy, and concerned for employee welfare. A lack of this type of high-quality relationship fans the flames of burnout and gives employees another nudge towards the door.
Managers also control workload and deadlines. In the past, increased job responsibility has been regarded as a motivator of employee retention. Knowing that you are trusted to do good work which makes a difference in a company is both meaningful and motivating. However, employees today are being asked to “do more with less,” meet impossible deadlines, and to do the work of employees who have left. This isn’t motivating, even if you pay them more for it. Instead, it creates stress and pressure that employees can no longer effectively manage, which gives them yet another reason to look elsewhere for relief.
Managers must ensure that employees’ workloads are a balance between too much and not enough. Employees want to contribute, they want to do good work, and they want to be valued, respected, and recognized for it. They don’t want to be stressed and feel used or undervalued. Company culture is tied to the employee-boss relationship and to hiring correctly. People are looking to work for a company with a great work environment, for a great boss they can trust, and where they can work with great people.
If they don’t find it at one company, they will seek to find it at another. If they are top performers, the opportunities will find them.
Professional Pre-employment Screening Services
PSP Metrics is a leading provider of pre-employment screening tools for the manufacturing, consumer products, utility, and service industries. We adapt applicant screening tools to the needs of each customer and provide 24-hour turnaround of test results worldwide. We also design tools for employee retention, management development, and succession. Explore our workforce solutions today!
Comments are closed.