With any business, there is bound to be a certain level of turnover of staff. No matter the size of the business, once you reach a stage where the work is being performed by employees, not the core ownership team, you will inevitably have some of them leave. In some cases, this may be because of natural turnover of staff such as retirement, or contract work coming to an end. In others, it may be due to life changes for the employee such as partners moving to new areas or the need to change working hours. Sadly, you will inevitably have a percentage of workers who need to be fired from a role or who chose to move to a new employer.
Whatever the reason, there is a cost implication to losing a member of staff. As well as the immediate financial impact of recruitment and replacement of the team member, you need to budget for the training and induction of the new person. They will almost inevitably need a settling in period while they build up to their optimum efficiency, and this can have an often-overlooked effect on the productivity levels until they do. A further cost implication that tends to be a little less obvious is the effect on the rest of the team. Even with the best replacement processes in place, it is still likely that others in the employee pool will need to compensate for the workload of the leaver in some way. This reduces efficiency again and can have a wider impact than you would expect. All this, and more, commonly happens when an employee leaves, and that is without even considering the impact on the company morale and job satisfaction a popular team member leaving can have, which as we all know, hits your productivity.
In extreme cases, we have even seen a situation where the leaving of several employees in a short period has created a sort of cascade effect where more are encouraged to follow suit and look for new positions. In an industry with a skills shortage where jobs are plentiful, this can be a huge problem and lead a revolving door situation where there is a seemingly endless arrival and departure cycle. Without stability, the business suffers and even fails.
So, what is the answer?
As glib as this sounds, the answer to this problem is simply to find a way to not lose as many employees. A low turnover rate is clearly much better than a high one. That said, some industries do have a naturally high staff turnover due to seasonal factors and industry working practices such as being project-based or seasonal in nature, but the core staff must be encouraged to remain.
Some things that may help retain staff are:
- Instilling and maintaining a company ethos and brand. This will naturally create loyalty and a sense of belonging in the team. It is much harder to leave somewhere if you have strong ties.
- Keep up with the market. Employees actually don’t see financial incentives as the biggest driver for moving jobs as a rule, but they will be tempted if they feel they are undervalued.
- Speaking of which, make the employee feel valued and listed too. Regular reviews, clear management, and the opportunity to contribute and be recognised for good work all contribute to a sense of job satisfaction.
- Recruit for the team, not just the role. The majority of disciplinary-based exits or early leavers happen because the person is simply not right for the company and should not have been hired in the first place.
Finally, get a good recruitment partner who will ensure that the candidates you see are taken from a pool of candidates that meet your needs. Some recruiters simply filter CVs and send as many candidates your way as possible in the hope that one will make the grade.
As always, we are happy to talk through the needs of your business and work with you to ensure you have the lowest turnover of staff possible.