How to Reduce the Risk of New Hire Turnover

High turnover is costly and disruptive for businesses. The Society for Human Resource Management found in 2022 that, across businesses of all sizes, the average cost of a new hire was $4,683, and the median cost was $1,244. Executive hiring was responsible for much of the difference between these numbers, coming in at a whopping $28,329 average cost. No matter where your business falls on this spectrum, excessive turnover creates an unnecessary strain on its resources while undermining employee morale and effectiveness. In this article, we’ll explore strategies for reducing employee turnover and building strong internal teams.

Create clear expectations.

When recruiting, hiring, and onboarding new employees, it’s essential to communicate clearly. If potential hires don’t have a clear idea of what the posted job would entail, what kind of company culture they would be entering, and to what standards they would be held, they can’t effectively evaluate whether the position would be a good fit for them. A 2022 Columbia University study found that in organizations with rich company culture, the turnover rate was less than 14%, while those with poor company culture experienced a turnover rate of almost 50%. Before beginning a recruitment initiative, take some time to create solid, detailed descriptions of open positions and the culture of your company.

When creating these descriptions, consider how employees interact, the nature, volume, and pace of the work you’re hiring for, and your company’s vision, mission, and goals. For example, will new hires be expected to work as part of a team, will they be mentored by an experienced employee, or will they be encouraged to work independently and bring fresh ideas into the organization? What qualities do you value in your employees? Is your workplace fast paced and production focused, or are employees encouraged to take their time to produce high quality, detail-oriented work?

The more you can illuminate what it’s like to work at your company, the better able you’ll be to attract workers who are well suited to the work itself as well as the workplace. If you don’t yet have vision and mission statements, creating them could be a good place to start. What are your company’s highest aspirations? What difference does it seek to make in the world, and what values does it uphold? When you can clearly articulate your business’ vision and mission, you can actively recruit employees who share its core values and sense of purpose.

Onboard like a pro.

Employee onboarding should be consistent, clear, and provide the information new hires need to meet expectations and succeed in their new positions. If the onboarding process is haphazard, disjointed, or fails to provide essential information, then you may be setting new employees up for confusion and frustration. This can make it difficult to build effective teams and a confident, competent workforce.

If your business does not yet have a detailed onboarding plan, taking the time to establish one is an important step in minimizing turnover. Modern software solutions can simplify this process by delivering onboarding content in a systemized way; it allows employers to ensure everyone receives the information they need for their position and easily verify that all onboarding components have been completed.

Invest in growth.

Preparing employees for long-term success with your company doesn’t end with onboarding. To retain quality employees, it’s important to give them opportunities to grow in your company. Companies that provide professional development and paths for advancement are better able to keep their employees satisfied and engaged with their work and motivated to do their best. Regularly communicate with employees about opportunities for mentoring, coaching, and other types of continuing education, and prioritize hiring from within for upper-level positions.

Prioritize Employee Health & Wellbeing

The ability to maintain a healthy balance between work and personal life is a key factor in retaining employees. To perform their best at work, employees need to be able to take care of themselves and their families. This includes not only offering competitive wages and benefits but also flexibility in work hours and location when possible. Valuing workers’ health and wellbeing contributes to a positive company culture and fuels employee satisfaction and loyalty.

Making flexible scheduling readily available for all employees is one way employers can promote work/life balance as well as high performance and productivity. In 2015, The Gap ran an experiment to determine the cost of making employee schedules more flexible and predictable. They ended on-call shifts, made schedules available two weeks in advance, and allowed workers to conveniently swap schedules electronically. Not only did workers report that they enjoyed better work/life balance, but rather than the changes costing the retail chain money, they observed a boost in both employee productivity and sales.

Foster clear communication.

Clear communication about many aspects of the workplace is essential to retaining employees.

Performance Feedback

When employees are doing well, let them know you notice. When they need to improve, provide concrete feedback so they know exactly how they can do so. When workers are unsure of how their performance is perceived, or if they’re criticized but given no direction on how to improve, it creates a stressful work environment. Make sure performance feedback is constructive and designed to help workers succeed. When they can see a clear path to success in your company, employees are more likely to stick around.

Scheduling

It’s important to not only make programs like flex time and family leave available but also to clearly communicate these benefits to employees and encourage them to use them when needed. The Harvard Business Review reports that while 8 in 10 companies offered flex time, arrangements were informal in most organizations, and employees rarely used it. Often, employees fear they will be penalized for doing so, and some employers see workers who try to negotiate greater flexibility as being less reliable and responsible. In many cases, workers resign rather than fight this uphill battle. This hurts not only overall retention but also workplace diversity. When the message received is that adherence to a rigid and demanding schedule is required for success, this tends to squeeze out single parents and others who are responsible for the care of family members.

Employee Input

In addition to clearly communicating to employees, it’s important to facilitate feedback from them. When employees feel valued, heard, and supported by management, it creates a more positive and inclusive work environment. Conduct regular check-ins with employees to understand their concerns and proactively address them. When employees leave, conduct exit interviews so you can gain understanding of the factors that cause them to quit.

Building a culture that supports employee retention is an ongoing process. By implementing the strategies discussed above, companies can increase their capacity to recruit and retain top talent, saving money in the hiring process and building experienced, knowledgeable teams. Employer Solutions Staffing Group (ESSG) helps employers effectively recruit, hire, onboard, train, and retain quality employees with a range of outsourced back-office services. Explore how our workforce solutions can help you boost retention and allow you to take better care of your employees. We provide robust HR software, expanded access to quality benefit plans, payroll and benefits administration, and more.