How to Reduce Employee Churn? – Ultimate Guide to Retention




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There’s a strange air of contradiction when discussing staff overturns and churn as a staffing agency. In a way, we are doing ourselves (as a business) a disservice by giving out workforce-building secrets. If we explain to the modern employer how to keep their best employees, we are crushing the possibility of them needing recruitment help in the future. While we may seem like superheroes now, we pay the ultimate price. We are demolishing our future by giving you the secret formula to long-term recruitment success.

Poor us.

Jokes aside, the importance of employee retention is at an all-time high. We are currently experiencing a baffling-yet-expected wave crashing throughout the staffing market. Labor shortages are devastating some industries. Meanwhile, some sectors (like technology) are experiencing a labor boom. It’s a perplexing situation, that of which we broke down entirely here.

Consequently, keeping the fantastic team you already have established (or are currently establishing) has become a crucial task. No longer are the days of passing great workers aside, knowing there are millions of eager minds waiting in the wings. In fact, In 1960, there were six working adults for every person over 65. In 2030, we’ll hit 2.8 working adults for every person over 65.

So, how do you ensure that your excellent employees want to stay with your company? How can you reduce churn? Let’s get into it.

What Is Churn?

Throughout the entirety of this piece, we will refer to churn and its wide array of synonyms. While the term may immediately strike a chord of connotation regarding butter and dairy, it’s anything but delicious.

Employee churn is the same exact thing as turnover. Therefore, it’s the opposite of retention. Basically, churn involves the act of losing (or firing) an employee and replacing them with a new worker. It’s the act of employees leaving and companies attempting to replace them.

Each month, 3 to 4.5 million employees quit their job according to the Job Openings and Labor Turnover Survey (JOLTS). Then, the employer has to work to recruit, hire, and onboard a replacement employee. Therefore, if your company has a significant churn rate, you will spend an extreme amount of time and company resources bringing in new employees. Over and over. Training and interviewing.

A high rate of churn can result in significant losses in a company, especially within an HR department. Henceforth, lowering the turnover rate and keeping strong employees is crucial to a successful business.

How Common Is It?

As the aforementioned statistic stated, millions of employees quit their jobs every month. If your business doesn’t sit comfortably at the top of a wanted industry, you are likely to see a plethora of resignations during your tenure.

Once again, we must harken back to the idea of the Great Resignation and the sudden influx of quitting. According to The Bureau of Labor Statistics, 47.8 million U.S. workers quit their jobs in 2021. As of November 2022, 46.6 million quit their jobs last year.

Despite the labor shortage and layoffs by tech industry juggernauts, employees are willing to drop their jobs at the turn of a hat. Following a life-altering pandemic, workers don’t place as much value in the capitalistic mindset of working a 9-to-5. They are willing to give up cushy jobs if the career doesn’t benefit them and improve their overall lives.

All that said, churn has always been a commonality among all working industries. With the Great Resignation still in play, it’s only gotten more common. Having the ability to battle against it and create a workplace that employees want to stay in is as important as ever.

What Are the Major Causes of Employee Churn?

It’s impossible to note every reason that an employee may leave their job. At the end of the day, we are all complex beings with a matrix of emotions and motives. And, as of the post-pandemic era, there are now a plethora of new reasons in which people are quitting. Recently we even discussed the idea of lowering spending to work less-demanding jobs.

Therefore, we will not attempt to note every reason churn happens. For the most part, resignations happen for a few broad reasons.

  • The Employee is unhappy with their role in the company.
  • The workforce is toxic and the employee doesn’t get along with supervisors or peers.
  • The employee doesn’t feel recognized or rightly rewarded for their work (whether benefits, compliments, salary, or promotions).
  • The job isn’t what the employee wants to do. They may want to go to another industry or have a more flexible workspace.
  • They don’t stand with the opinions and ideals of the brand, company, or supervisors.

All in all, it’s likely churn will happen for a multitude of reasons, but they often fall within those specific scenarios. Therefore, when creating a plan to reduce churn, it’s important to maintain empathy and a clear idea of employee wants and needs.

How to Reduce Employee Turnover

As we stated, it’s impossible to pinpoint churn on a specific reason. Thus meaning, it’s impossible to pinpoint maintaining and improving churn through a step-by-step process. As employers, it’s important to listen to your workers and be willing to adapt to their overall needs (we’ll get to that).

Overall, here are our main tips in improving turnover rates and retention in your workforce:

1. Create the Culture – Hire Right

We have spoken ad nauseam about the negative aspects surrounding employee churn. The company will have to spend a large majority of company resources (or reach out to a staffing agency) to bring in new employees. It’s an expensive and time-consuming process.

There’s a counteractive aspect, though. If a company isn’t hiring the right employees, churn continues to be a necessity. If a company’s workers are not exception employees, then why go through the proceeding effort to make sure they stay? In that regard, churn can be a good thing.

Consequently, the first step in both reducing churn and reducing the need for churn is hiring the right people. If you don’t have a strong recruitment process in place, you may just be bringing in workers that aren’t willing to stay or aren’t worth keeping. Luckily, we have broken down our entire recruitment process here.

Yup, we gave away all of our secrets.

Therefore, Build a Culture

Building company culture is crucial to creating a workplace that satisfies every employee. Simply put, creating a culture allows everyone to feel fulfilled, understood, and motivated. It works as both a way to keep current employees and attract great ones in the future.

Overall, every step on this list relates to creating a fantastic workplace culture, but hiring the right people is the first step. If you tend to hire productive, energetic, and empathetic employees, you will organically create a workplace that is such. And, if your culture remains positive and inclusive, you will be able to keep great workers around.

Not only does a strong and positive culture affect current employees, but it is a top priority for new ones, too. TeamStage has stated that company culture is important for 46% of job seekers. According to Monster, 83% of Gen Z employees say that a company’s commitment to diversity, equity, and inclusion (DEI) is one of the top priorities when choosing an employer.

We won’t bend your ear too long about creating culture, for we have plenty of articles on it, but we can’t underestimate how important a happy workplace is for lowering churn.

2. Benefits Are Crucial

The increase in employee self-worth caused by the Great Resignation comes with an increase in demand. Employees aren’t willing to work at just any job, they want a career with forward-thinking attributes. They want incentives.

In June of 2021, Indeed reported that searches for hiring incentives per million job searches on Indeed jumped 131% compared to January 1, 2021. People are looking for incentives.

People want extra time off for mental health, sign-on bonuses, health benefits, and so on.
They are not willing to settle for less.

If you are looking to keep your great employees happy at your company, there should be an expression of incentives. Even if something simple and free (i.e. extra time off), you should still make it available to both new and old employees. We’ve reached the point in employment reach that expressing incentives is necessary. You are trying to sell the job to employees. It’s a two-way dance.

Regarding salary, pay will always be the most important aspect of work. It’s the reason workers work, after all.

Ultimately, we aren’t going to formulate a retention plan and tip regarding paying your workers more. While it is important, it shouldn’t be the only thing a company provides regarding retention. In the modern age of company culture and inclusivity, you can’t just throw money at your employees and expect that to ‘keep them happy’.

You have to provide competitive salaries to keep great workers, though. That’s an aspect of employment that will never go away. Luckily, if you can’t outright outplay other offers, you can build a package with benefits and culture that make your job more enticing than higher-paying ones.

3. Stop Toxicity

Fantastic employees won’t stay in a workforce that is toxic and negative. Actually, no employees will stay in a workforce that is toxic and negative.

A toxic workplace is when overall productivity dips, workplace gossip rises, and negativity hits its peak. Employees no longer want to work for the company, supervisor, or teammates due to an overarching sense of negativity or insult. This is often caused by a disgruntled teammate starting trouble, a supervisor abusing power, or a company with an unsavory culture.

One of the quickest ways to lose your best employees is to let a toxic teammate or supervisor thrive, quickly killing all of the positivity and production that once surrounded the exceptional crew. If a fantastic employee feels like they are surrounded by workers that are willing to piggyback on their effort, not providing anything of value to the team, why would they want to stay?

 A study by Cornerstone concluded that troublesome employees make their coworkers 54% more likely to quit. If you notice that these negative workers are bringing down your workforce, deal with them immediately (we spoke about how to do this here). Don’t let their negativity drag down the company morale permanently.

4. Promote From Within and Offer Experience

The only employees that are okay with staying stagnant in their role are ones that you probably don’t want to keep. The best workers always want to improve and should have a clear way of doing so. Even if you are a small company and don’t have a plethora of positions, you should always have an increasing level of responsibility and pay to offer hardworking employees.

Gen Z employees and younger Millenials want the ability to grow in their place of employment, but they do not see the employment ladder as vertically as those before them. Moving up to a managerial role with the opportunity to lead, but still be led from above, is not as much of a win as it used to be. Younger workers want the opportunity to be creative, be a leader, and collaborate on something that matters.

As an employer, you need to offer these experiences and promotions.
You should always look to promote within the company before hiring an outside worker.
Furthermore, you should always offer cross-training and
unique experience-building exercises if the employee inquires about them.

If you are a smaller employer, this may seem impossible. You may not have multiple departments for an employee to train in. You may not have clear advancement opportunities. Have no fear.

Let’s say you are a small business with two employees. Even if there aren’t a lot of responsibilities to be delegated, you can still find a way to compensate your workers for their effort. Maybe your one employee can become a keyholder or increase their responsibilities with inventory management. No one wants to work without a lateral improvement structure.

5. Recognize Positive Efforts and Results

A recent study by Zippia noted,

“29% of employees say they don’t receive recognition for their work. Over a quarter of employees haven’t been recognized for their work, and 17% say they receive it annually, which isn’t much better. 20% say they’re recognized quarterly, 11% say they receive recognition weekly, and 2% say they do daily.”

Zippia

Note one of the main reasons for resignations that we noted earlier. Plenty of employees will leave (or have wandering eyes for better career options) if their employer doesn’t appreciate them.

How many times have you heard someone complain about their job by stating that their manager doesn’t know how hard they work? Exactly.

Henceforth, employee recognition is more important for churn than you may realize. Employees want to be rewarded, even if it is just a ‘thank you’ or ‘good job’ when they do something well. After all, an employee deserves to be treated like they are important to a company. They are. You wouldn’t exist without them.

Overall, employee recognition can range from compliments to workplace parties. From promotions to awarded vacations. There are a plethora of ways to recognize and thank your workers for their hard work, especially the ones you don’t want to lose.

Regardless of how you decide to handle rewards (or how much you can afford), don’t let you workers feel unappreciated or unseen for their productivity.

6. Mental Health Comes First

For almost two years, an entire country was locked inside their houses. A swallowing fear of both the unknown and a health-slicing illness lingered above every citizen, especially those with a significantly less backlog of life experiences. Because of this, workers have decided that mental health should be at the forefront of their priorities.

Workers (especially Gen Z) want an office space that cares for their mental health. They want to be heard and helped when needed.

How does one help the mental health of their employees? It truly depends. But, it’s important to remain empathetic and open-minded as an employer. Stress management programs, personal days and reimbursement for gym memberships can be great ways to keep your employees in good spirits.

Secondly, keep an ear open for employee feedback. Employees are the ones on the field, after all. They may be able to explain what is causing the burnout amongst the team. As stated, keep an open mind. Allowing for remote work or time off can go a long way in retaining employees.
Overall, helping keep or improve the mental health of your employees will not only help them work harder but will keep them around for longer.

To create a workplace where employees feel understood and appreciated, it’s important to remember your place in mental health. After all, you are the place that they spend the majority of their time in. And, unfortunately, work is often the origin point of a lot of human stress. Therefore, maintaining a workplace that is empathetic and cares for mental health is important to keeping employees happy (and healthy).

7. Listen and Adapt!

You may believe that your way of doing things is set in stone. You may believe that you’ve scrubbed the walls of any toxicity and negativity. Unfortunately, you do not see it all. As a leader or owner, you may not be on the floor as much as you want. You may have missed things going on or a shift in the environment.

Want to know how to keep your employees?
Want to know what is needed to keep them happy and productive?
Ask them. They know better than anyone else (including us).

We are all different. Your workforce will continue to change and adapt. You will lose employees for reasons outside of your control. The best way to approach these fluctuations is to have an open mind and an itching ear. The employee churn strategies that work for your current team may not work for your next one. You may not notice issues going on within the team. Be open and ready to adapt.

All of these concepts stem back to the idea of empowerment. Remembering that your workers are humans with intellect, ideals, and emotions will help you retain your team. Treat every employee with respect and empathy. Even if you have to alter the way you do things, it may be for the betterment of your business.

8. Create an Effective Onboarding Process

Much like hiring the right employees, training employees correctly and instilling a great culture from day one is important. When an employee first enters your team, that’s the best time to instill positive habits and ideas.

According to a BambooHR survey, One-third of new employees quit after about 6 months.

We created an entire article regarding the importance of onboarding and how to create a great process. We will quote it here:

Excerpt from Effective Onboarding Process for Employee Retention

They (not sure who) say that first impressions are the most important. Potential candidates spruce up their suits and ties when turning in their applications. Workers practice interview questions relentlessly before meeting with hiring managers. That same level of effort should come from the employer, too.

The onboarding experience is crucial for setting a standard. Not only does it provide a great first impression for your new hires, but it allows for questions to be smoothed before things get too far.

How many times have you seen an employee quit shortly after the introductory period? This action may not solely be the employee’s fault. Maybe the intention and job were not clear from the onset.

Henceforth, the onboarding process should be clear, concise, and inclusive. You should take the time to ease the employees into the role. This is the opportunity to turn an outsider into an insider. Be prepared to answer any question, be clear about roles and objectives and introduce the candidate to the rest of the team. The worker should leave the onboarding experience feeling positive and knowledgeable about the position ahead.

Being tossed directly into the fire can cause a lot of workers to burn out quickly. The training and tone you set from the beginning can dictate the entirety of a worker’s tenure.

9. Be Flexible

We live in a modern world full of new ways to work. From remote to hybrid, there are a plethora of new workplaces formulating every day. We have seen (rather quickly, mind you), that workers both appreciate and respect the array of options for their production. In an ever-chaning world full of exponential rises, a company must be willing to adapt and try new techniques when they emerge. Do not remain bullish if your employees want to adapt to new ways.

If a top-tier employee brings you an idea for a change in the way your company does things, you may want to listen to it. They are a high performer and have a basis of how well they can continue to perform under different circumstances. If they believe they can perform just as high in a different way, you should give them the trust to try it.

For example, if multiple employees bring up the concept of changing or offering hybrid working opportunities, you should think about it. Will it help get them engaged and create a strong working culture? Will it help improve the overall wavelength of the office? It may also save you some production costs and allow you to hire different (and better) workers.

You must be flexible and willing to try new things to keep great employees. Even if it doesn’t work out, you can always reverse the model. The workers will appreciate you for at least attempting the new ideas.

10. Stay Up-to-Date

Much like the last tip, keeping churn low requires being hip and privy to new ideas and technology. Even if you are a company that thrives in the production of antiquated ways, it’s always nice to keep things updated.

Your office may not need this new technology, but it may make the day-to-day of employees more efficient, keeping them happy and productive.

Keeping long-term employees means keeping younger employees.
Younger workers want and thrive off of updated technology and ideas.

Make sure to be willing to grow and adhere to new tech. Ask your employees if they have any ideas on new tech regarding a problem and solution. For example, if companies were not willing to bend to the addition and cohesion of video chatting applications like Zoom during the pandemic, they probably didn’t make it out of said pandemic. It’s that simple.

You need to grow with technology. No one knows more about it than your younger employees. Get their takes on things. Adhere to their needs and ideas.

“What I always say is, ‘Do every job you’re in like you’re going to do it for the rest of your life, and demonstrate that ownership of it.’”

— Mary Barra, American Businesswoman