Taking the cost of turnover at 150% of salary, the cost of turnover is then $75,000 per employee who leaves the company. For the mid-sized company of 1,000 employees who has a 10% annual rate of turnover, the annual cost of turnover is $7.5 million says the Small Business Advisor and Inc. Magazine confirms the 150%!
Turnover is expensive. Sometimes it cannot be avoided. When it can, leaders, managers and supervisors should avoid this costly departure by taking the right steps for employees. As an executive coach, I have found these five tips to reduce turnover.
- In today’s environment, everyone wants feedback. If it is positive feedback, relay the message in a public environment. If the information is negative or a ‘teaching moment,’ please do it privately. Don’t make people feel uncomfortable or stupid in public. The rest of the staff will see this and wonder when it is their turn to be dumped on. They will ALL start looking for a position that eliminates the threat of reprisal publically.
- Meaningful praise and recognition go a long way to boost overall morale. Awards, recognition, hand written notes and public praise is the most cost effective tool to use in building a productive, happy work force. Lack of appropriate feedback is the number-one reason for performance-problems.
- Help employees outline clear career paths and action steps to get them to the next step. Don’t wait for the annual review or midyear check-in. It takes minutes to send a quick email update and ask how the plan is coming along.
- When hiring, eliminate post-hire shock by extending the interview with shadowing a current employee. More than six in 10 turnovers begin with some kind of post-hire shock. Develop clear, detailed job descriptions and of course there will be a line stating ‘Other duties as assigned!’
- 60 percent of U.S. employees are not using their best talents. As Jim Collins says, “Get the right people on the bus.” The days are long gone where you wave a mirror under the candidates nose, and if they fog the surface, they are hired. Match their talents with the position.
Drill down on the type of leader you have become. Yes, your plate if full but learn to take time to reduce turnover. You will save money and increase productivity with the employees you currently have.
Are there any tips you can share that are used to reduce turnover in your environment? I would love for you to share!
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Professional Speaker, Executive Coach, Best Selling Author
Marsha Petrie Sue, MBA
Certified Myers Briggs Type Indicator Facilitator