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12 Strategies to Reduce Employee Turnover...

12 Strategies to Reduce Employee Turnover That You Can Start Using Now

Companies that can reduce employee turnover reap the benefits of happier staff, better products and services, and stronger profit margins.

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The labor market continues to ebb and flow with various media reports simultaneously warning employers about the “great resignation” and employees about massive layoffs at several large companies. Regardless of the reality of the employee applicant pool, though, employers are always interested in ways you can reduce employee turnover.

Here we take a look at what causes employee turnover, why reducing employee turnover is important and 12 strategies to consider to help reduce its negative impact.


What causes employee turnover?

Employee turnover is caused by a variety of factors as we saw during the height of the pandemic. Initially, many employees—especially women faced with demanding child and family care needs—decided to leave the workforce entirely to focus on personal needs. Later, as employees began to experience the flexibility and freedom that remote and hybrid work offered them during the pandemic, many decided to seek employment elsewhere if their current employer indicated that they wouldn’t continue to offer those options.

In addition employee turnover can be caused by factors like:

  • An interest in earning more money, or gaining access to better benefits.

  • The desire to move forward into higher level or more responsible roles.

  • Interest in returning to school or pursuing educational opportunities.

  • A poor fit with the company culture.

  • Frustration over working conditions.

  • Frustration with senior leaders.

  • Frustrations with direct supervisors/managers.

  • The list can go on and on and on…

Regardless of the reason for turnover, though, taking steps to reduce turnover is critical for organizations of all kinds.


Why is reducing employee turnover important?

There are two primary reasons that reducing turnover is important to employers:

  • The cost of turnover in terms of lost productivity and the expenses associated with attracting, interviewing, and onboarding new staff members can be significant.

  • Turnover represents a brain drain or loss of institutional knowledge for employers, especially when departing employees have a long tenure with the organization.

Employers and their HR advisors are well familiar with the out of pocket costs and staff time associated with replacing departing employees. Gallup, for instance, indicates that the cost of replacing an employee can range from one-half to two times their annual salary.

There are other costs as well.  A recent Wharton study indicates that the cost of employee turnover also impacts product quality and reliability.

Add to these costs the associated disruption to the various teams the employee was a part of, and the additional disruption and time to productivity required when a new employee joins the organization and it’s easy to see why employers would be interested in stemming the tide of turnover—even in economic environments where talent is plentiful. The quality of hire, of course, will have an impact on these costs and how quickly a new employee can get up to speed and be fully productive.

Employers can consider a variety of strategies to help them minimize turnover and its impacts.


how people analytics can help solve employee turnover and increase retention

12 strategies to reduce employee turnover 

Employers can take a variety of actions to help reduce employee turnover, including: 

  1. Conduct a climate audit.

  2. Evaluate your hiring and onboarding processes.

  3. Hire for both competence and fit.

  4. Ensure a competitive pay and benefits package.

  5. Commit to open, honest, frequent, and transparent feedback.

  6. Consider how elevating DEIB efforts could have an impact.

  7. Consider how elevating ESG efforts could also have an impact.

  8. Invest in the personal and professional growth of your staff members.

  9. Recognize and reward staff efforts in alignment with business strategy. 

  10. Offer flexibility and support work/life balance.

  11. Use the results of engagement polling, surveys, and both exit and stay interviews.

  12. Harness the power of people analytics to continually inform your turnover reduction practices.

Let’s dig into each of these points in more depth. 

1. Conduct a climate audit

Conducting climate audits or employee satisfaction/engagement surveys can help you proactively identify potential problem areas within the organization and its business practices that might drive turnover.

The flip side also is true. A climate audit can help you identify the factors within your organization that employees most value and feel positively about. Then you can encapsulate these positive elements of your workplace climate in an employee value proposition that can become a key component of your messaging with both current and potential employees.

2. Evaluate your hiring and onboarding processes

Employees need to fully understand what their new job will be like. Providing realistic job previews during the hiring process can help candidates make informed decisions about joining the company. Sharing the good, the bad, and the potentially “ugly” aspects of working in your company, or in a specific division or department, can avoid employees feeling like they have been misled and, potentially, causing them to leave shortly after they join your company.

The onboarding process is another moment of truth that can impact turnover. Onboarding is an opportunity to start employees off on the right foot with important information about the company; its culture; its mission, vision, and values; its policies, practices, and procedures. Providing employees with the practical, actionable information they need to succeed in their new roles can help minimize the chances that they’ll flounder or struggle in their new roles.

3. Hire for both competence and fit—ensure value alignment

Fit is important, and while companies today are, as they should be, laser focused on building a diverse and inclusive workforce, there are cultural considerations that do come into play.

For instance, a nursing assistant without a high level commitment to quality patient care isn’t likely to thrive within a hospital setting. An employee with a low level of energy and engagement isn’t likely to excel in a business development role.

Employees need to have both the competencies and personal tendencies, values, and beliefs to ensure their success with any organization.

4. Ensure a competitive pay and benefits package

The “quit rate” in the United States reached a 20-year high in November 2021. According to Pew Research, the biggest factor driving turnover today is pay that is too low. Particularly in a competitive employee market, employees will have options available to them—when those options offer a better total compensation package, they’re at risk of turnover.

Regularly evaluating your pay and benefit practices and making adjustments as needed to remain competitive is critical to keeping employees on board.

5. Commit to open, honest, frequent, and transparent communication

Communication is critical in workplaces of all kinds both to ensure that employees understand what is expected of them and how their performance is tied to overall business goals, and to provide them with the means to share input and ideas.

Open, honest, frequent, and transparent communication serves to establish a climate of trust. Prioritizing employee engagement and listening is a best practice that can pay big dividends in terms of both employee retention and employee engagement.

6. Consider how elevating your DEIB efforts could have an impact

Since George Floyd’s murder and related social issue unrest around the country, companies have focused more proactively on efforts to ensure a workplace that is committed to diversity, equity, inclusiveness, and belonging (DEIB). These efforts are valued by employees who increasingly indicate that a strong focus on DEIB is something that draws them to an organization—and encourages them to stay.

7. Consider how elevating your ESG efforts could also have an impact

Employees also are interested in the efforts of the organizations they work for to address environmental, social, and governance issues. These efforts have become so top-of-mind and so critical to business success, that the SEC, Nasdaq, and other organizations are requiring companies to report on their efforts.

Research from Mercer indicates that ESG and its impact on how employees view their organizations can offer these companies competitive advantages. They say: “Our study found that top employers, as measured by employee satisfaction and attractiveness to talent, have significantly higher ESG scores than their peers.”

8. Invest in the personal and professional growth of your staff members

Today’s employees recognize that, regardless of where they obtained their education, and what level of degree they earned, learning is a journey and not a destination. The work environment is a rapidly changing one with massive impacts from technological innovation, market shifts, global competition and more.

Employees know they need to continually hone their knowledge, skills, and abilities to address these challenges—and they expect their employers to help them do that.

Wharton reports on research from Monster’s July 2021 Job Index, which indicates that:

80% of professionals don’t think their current employer provides growth opportunities.

54% of employees fear they don’t have the skills they need to thrive in a workforce that emphasizes collaboration using technology.

49% of employees expect their employer to support career growth.

Employers that do will have an edge in the candidate marketplace and the ability to keep top talent on board.

9. Recognize and reward staff efforts in alignment with business strategy

We’ve already seen the positive impact that competitive salary and benefit practices can have on retention. In addition, though, employees also value recognition and rewards from their managers, supervisors, and senior leaders.

“The battle for talent can be won with employee recognition,” according to InfoQ. Taking steps to recognize and reward staff members can have a ripple effect, they report. “Workers who are regularly recognized by their managers in a way that makes them feel valued are more likely to recognize others, contributing to an overall culture of recognition.”

10. Offer flexibility and support work/life balance

The genie has been left out of the bottle. As many employees have experienced the freedom and flexibility that remote work offers, and recognize that in many cases there’s no logical reason they shouldn’t be able to work remotely, demand for flexibility and work/life balance is on the rise.

In fact, reports suggest that one of the reasons for the great resignation and its growth is the new tendency for employees to proactively leave organizations that aren’t ready to provide that flexibility and balance.

11. Use the results of engagement polling, surveys, and both exit and stay interviews

Companies have the ability to gather input from employees on a regular basis to gauge the drivers of retention, and that’s exactly what they should be doing—through surveys, polls, and both exit and stay interviews.

Stay interviews, SHRM suggests, “can be an antidote to exit interviews. Gathering feedback from employees before they’ve begun actively searching for another job can help employers, and managers, be proactive in establishing a supportive and engaging culture and work environment.

12. Harness the power of people analytics to continually inform your turnover reduction practices

A data-driven approach to analyzing employee turnover and employee sentiment on an ongoing basis can empower your organization to identify why people leave and help to boost retention.

Enlist the aid of people analytics pros and your CFO in these efforts. They can bring an analytic approach to the process helping you to turn employee numbers—like turnover, retention, length of service, etc.—into bottom line business impacts.

This guide offers some insights and ideas for the metrics to track to stay focused on employee retention in your organization.

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