How to reduce employee turnover

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The term ‘employee turnover’ refers to the number of people who leave an organisation to be replaced by new staff over some time.

Of course, it’s good to inject new life and get a fresh perspective from new recruits, but there’s a balance to be struck.

A high employee turnover should ring alarm bells for both employees and employers, as it suggests that something about the company, the work environment, or the staff is making people want to leave. While this is in itself a problem, it also gives rise to several other issues.

The problem with high employee turnover

The first and most obvious problem is the cost. The cost of recruiting, onboarding, and training new staff is significant. You don’t want to invest this level of resources into someone who stays for three months only to have to repeat the process for their replacement—the costs will accumulate, and you won’t get close to seeing a return on your investment.

Along with the negative effect on your bottom line, high employee turnover will also impact your team. The best and most effective teams are carefully constructed, with an optimal balance of personalities and skill sets. If you’re constantly adding new people into the mix and losing others, this balance is thrown completely off course, and time is wasted on getting to know people and how they work best rather than cracking on with the job at hand.

It also won’t help your business if you constantly replace people, no matter your industry. Accumulated knowledge and skill are hugely valuable and key to providing outstanding and consistent service to your clients or customers. When you lose people, you lose relationships and expertise that are tremendously valuable and take time to build.

It should be clear now that you want to do everything you can to retain good people once you’ve found them, trained them, and integrated them into your business.

But how do you do this?

When looking at ways to reduce employee turnover, the most logical starting point is to ask what makes people want to leave a company.

Perceived lack of progression

If someone can’t see a future at your company, they will leave; it’s just a matter of when. Understandably, when that first opportunity comes knocking, they’ll be off.

Nobody likes to stagnate, and how mundane would life be if you knew that nothing would ever change? Whilst some level of self-motivation is required of any good employee, you can’t expect people to work hard, push themselves, and seek out challenges only to feel like they’re beating their head against a brick wall when it comes to getting a promotion, a pay rise, a training opportunity, or just a clear trajectory for the future.

You will never be able to manage turnover if your staff see their role – or worse, your company – as a stopgap, a short-term stepping stone on the way to somewhere else. You can be sure that the ‘somewhere else’ will be benefiting from the best of what they have to offer, not you.

You can help to stop their eyes from wandering by making your company an attractive long-term prospect. You can do this by ensuring your employees have clear goals and opportunities and that you are transparent, forthcoming and encouraging about their future prospects. Show them that there is a career path for them to follow, with clear signposts, and they will likely follow it.

If you operate in multiple cities, offer an employee relocation benefit that will give them an opportunity to move to another city or country and develop their skills to boost their career and become a greater asset to the company. It needs to feel like a place where they’ll be nurtured, valued, and encouraged to grow.

Beating turnover by making employees feel valued

If your staff feels like just another cog in the corporate machine, they may begin to feel tired, disillusioned, and unmotivated.

If they don’t feel seen and valued for who they are and what they specifically bring to the table, they might wonder if this is the best place for them and if the grass might be greener elsewhere?

To keep hold of your best people, your company needs to feel like a place where they are seen, appreciated, and encouraged to grow.

There are many ways in which you can communicate to someone that they are valued.

Trust is a big one.

You can show employees that you trust them by not micromanaging, giving them the freedom to do their job, sharing information, and empowering them to make decisions that drive the company forward.

Make sure you follow up on this with recognition and reward. Remember that not everybody is motivated by the same things. Inevitably, some will see their value reflected in financial terms and respond well to bonuses, regular pay reviews, and other such incentives. Others feel valued when they are given more responsibility and entrusted with more business-critical tasks and decisions.

Get to know your people and what drives them, and ensure they get the feedback and recognition they need.

Impact of burnout on employee turnover

Another contributor to high employee turnover, and a particularly concerning one, is burnout. Burnout occurs when someone’s work life is so intense and relentless, so draining, that they reach a point where they cannot go on any longer and quit.

This is more common in fast-paced, competitive ‘dog eat dog’ industries and in work cultures where asking for help is seen as a sign of weakness or an inability to do one's job.

In this scenario, if you can’t keep up, it can feel like the only option is to walk away.

Suppose you regularly lose employees due to burnout. This could be a sign that something is not right in the work environment: that you’re using the wrong strategies to motivate people and not providing the support employees need.

An employee assistance program (or EAP) can be a great resource for helping staff members get the support they need through a difficult time in a confidential setting. Using an EAP can contribute to your employment offering, which is designed to attract great people and keep them happy throughout their career with your company.

In the best-case scenario, your staff do not need counselling for a work-related issue. People should return home from work healthier than when they left. Team members should be able to ask for help or admit if they are struggling. Always consider your company culture and the way people are required to work. Does it help to get the best out of everyone?

You may be in an industry that is unavoidably fast-paced and stressful – if so, have processes in place to manage this. Encourage people to take time away when needed, and communicate the importance of identifying a problem early rather than letting it reach crisis point – better a day off to reset and recharge than two weeks of sick leave, or a lost team member.

Recognise that physical and mental health go hand in hand, ensure your sickness policy reflects this and that your staff know they will be supported in keeping themselves fit for work, physically and mentally.

Employee turnover is an inevitable part of running any business and is not always bad.

The main thing is that it’s managed, that you’re not losing people as fast as you’re recruiting them, for reasons unknown.

In all of the above scenarios, communication and engagement are key.

Check-in with your employees, encourage people to speak-up, but don’t just wait for them to come to you.

Be proactive. Rather than a simple “everything okay?” ask open-ended questions like, “How are you getting on with X?” and never settle for “fine.”

Employees can thrive in an open, transparent and supportive culture, especially when regularly presented with new opportunities, responsibilities, and challenges. A place where people feel good is a place where they’ll want to stay.

Focus on making your workplace that place for them, and you’ll have a happy and thriving team that never wants to leave!



Our co-founder, Phil, loves people, problem-solving and making life easier for small businesses. If you book a Leave Dates demo, he will give you a warm welcome and show you everything that you need to know.