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Managing Employee Retention and Reducing Turnover

It is no secret that employee turnover is one of the highest costs of doing business. Many studies show that the cost of turnover is around six to nine months of an employee’s earnings. These are costs that may be avoidable, but not without some work. Not only is turnover expensive, but it causes disarray within the organization. Losing an employee, regardless of the reasons, means filling that position again. This involves potentially tasking other employees with the duties of the employee who left while the organization searches for someone to fill the void. While most organizations view turnover as negative, a positive side of turnover may be that the new employee may be a better fit for the organization. However, turnover often indicates a larger issue somewhere within the organization.

Employees leave for many reasons.  Some of the most common reasons employees leave include: disengagement with their manager or employer, employees who see that their manager or employer consistently tolerates poor performance from others, managers or employers who fail to recognize and employee’s accomplishments, and employees who believe that they are overworked. These reasons may commonly indicate “poor management” within the organization. Many of you reading this article may be puzzled as to why “pay” has been omitted from the list of most common reasons. While pay may be a reason an employee leaves, there is generally a larger issue than pay that has caused the employee to decide to leave. Employees tend to leave their managers rather than their employers.

Oftentimes, the best employees are the ones who are the first to leave. High performers are the employees who usually have more stress put on them when turnover occurs. This comes from the increased workload and lack of recognition from their manager that they are not only completing the tasks that their job requires, but other job tasks as well. Managers should strive to recognize high performers and continually encourage them for the quality work that they are doing. This will help the employee feel more engaged and understand that they are valued within the organization.

While turnover is detrimental to an organization, it is something that is able to be minimized. In a competitive work environment, it is not always easy to pinpoint exactly why employees may be leaving. Employee surveys, exit interviews, and quarterly conversations with employees are ways that managers and employers may uncover the root cause of turnover. By utilizing these tools, employers may find that they may not have all of the right people in the right seats.  Namely, managers may not have the skills necessary to be strong leaders in their jobs.  Also, employers may find that their employees are not entirely happy with the benefits that are offered. Offering competitive benefits plays a large roll in retaining employees. These benefits range from health insurance, life and AD&D insurance, company-sponsored retirement benefits, paid time off, shift differentials, bonuses, etc. The list could go on depending upon the type of industry. Remember that focusing on why employees stay is just as beneficial as focusing on why employees leave. So, incorporating questions in the employee surveys, exit interviews, and quarterly conversations with employees about what they like about the work environment is as equally important.

Employees want to know their purpose within an organization. It is important that they have a vision for themselves in the organization for the future. If organizations create a clear path for advancement for employees, those who are able to see that path will be engaged and motivated to perform well in their jobs. Employers should not exclude those employees who do not see their path to advancement as happening too quickly. These employees may be motivated by something other than advancement in the company. Training and coaching for the job that they hold now may be all that they need to succeed.

Finally, employers should ensure that employees are aware of what is expected of them. It is not uncommon that an employee is unsure what their manager’s expectations are. Quarterly conversations are a perfect opportunity for a manager to convey their expectations to their employees which may turn an employee’s performance around, if needed, or help them to become an even higher performer in the organization in the future.

While some of these tactics may not work for certain organizations, it is important for employers to find what works best within their organization. Employers should task and train their managers to engage with their employees and work to create a culture of communication to ensure that employee’s voices are heard, ultimately leading to greater retention and less turnover in the future.

For additional information on this topic, please contact us at www.newfocushr.com.

Written by: Patrick McKenna, SHRM-CP

HR Coordinator







New Focus HR is a human resources consulting and training company that services all organizations. Our expert team collaborates with businesses to attract, motivate, retrain and retain their biggest assets, employees. While engaged with an organization, our focus is to find solutions that improve the company’s internal HR-related practices while increasing results at the same time! Our focus. Your results.