As the economy begins to rebound, you may notice the person working at the desk next to you this week is not the same person who was there last week. Improving job markets generally cause employees to begin looking for greener pastures.
Turnover is costly. In terms of economic cost, businesses should expect to incur a cost equivalent to about 20 percent of the salary for each departing employee. It is my observation that some companies often struggle to retain good people while others have very little turnover.
In survey after survey, one of the most common reasons cited for turnover is mismanagement of human capital. People change jobs because they don’t feel valued, haven’t been properly trained or mentored and don’t feel like they are heard. This matters more than salary according to the data.
Here are three key areas to reduce the cost of turnover, increase employee loyalty and successfully engage employees.
- Effective training. For key positions, identify not only what the key duties are, but also develop a process for performing tasks. Assign a mentor to work with the new hire and to review key processes and procedures and to be available to answer questions. This will help provide a smooth transition as responsibilities move from one employee to another providing a potential opportunity for career progression and job variety.
- An onboarding process. First impressions are priceless and both the employer and employee have a lot to do on the first day. Ensuring the work space is prepared, computer information has been set up and obtained, phone numbers are assigned and even having pens and paper available are little things that make a huge impact on new employees.
- Regular and in-person communications. While email is the norm for many organizations, it lacks tone and personality to communicate effectively. Employers should have regular team and one-on-one meetings to discuss how teams and employees are working in their roles, in addition to the more traditional results-focused meetings. Open communication helps ensure work teams are effective.
The most successful companies and famous “best-places-to-work” cultures already do these things. As Reno begins to attract more companies from outside the area and compete on a global stage, it is important we develop this type of culture in our businesses. Not only will a happy employee culture ensure business success, but it will also keep top talent in our community.
Director of Corporate Outreach and Relations, College of Business