Replacing an employee can cost as much as 20% of their yearly salary. The higher up their position is, the more expensive it is. That’s because you need to factor in paying recruitment agencies, covering for the vacant position, and the time lost to those responsible for hiring.A low employee churn rate is key to maximizing your potential and growth.
Replacing an employee can cost as much as 20% of their yearly salary. The higher up their position is, the more expensive it is. That’s because you need to factor in paying recruitment agencies, covering for the vacant position, and the time lost to those responsible for hiring.
A low employee churn rate is key to maximizing your potential and growth.
When you have a lower employee turnover, you can focus your resources on researching and launching new products and services, improving the working environment, and investing in employees’ development instead.
It also boosts your employer brand, which is crucial if you want to win the war for talent. Brands with a strong employer brand lower their cost to hire by 43%.
But how do you reduce your churn rate?
It starts by looking at the employee journey. How can you improve it? What steps can you make to create a more inviting atmosphere for employees whether they’ve been there five weeks or five years?
Let’s take a look at three important parts of an employee’s journey, and how small changes to them can reduce your employee turnover rate.
Happy employees are loyal employees. To create this sense of loyalty, you need to make them feel valued. This starts from their very first day.
However, not every company manages this – 42% of employees have no computer or device to work from on their first day. Worse, some employees don’t even have a desk on their first day! While this is only part of the onboarding process, it’s an important part of setting your employee up for success, especially when 20% of employees leave within the first 45 days.
Contrast that to the 69% that will still be with a company three years later if they go through a positive onboarding process, and you can see why a good onboarding process is so important.
A negative experience reflects badly on you: it makes you look disorganized, and like you don’t value your employees.
It’s therefore imperative that you you spend time planning the onboarding process for your new employee before they start. Don’t leave it all until the last minute, as you may find that there are some issues – like purchasing new equipment – that will take days, maybe even weeks, to sort.
Also ensure that their company account and logins for any relevant software are set up before they begin. That way, all they need to do on their first day is click to activate their new account. They can then start using the software straight away.
Once they’re all set up, don’t just sit them down and present them with a list of objectives. Include them in the decision-making process. Have some projects ready for them to work on, but listen to them and ask them what they’d most like to work on, too. That way, they immediately feel like their thoughts and opinions are valued.
The objective of an onboarding process is to help the employee get to know the company, its products, and mostly importantly, the culture and their colleagues.
Everyone in the team should be involved in making the new team member feel welcome. This could include scheduling introduction meetings with the new starter, or assigning them a buddy to give them a tour and answer any day-to-day questions.
Group inductions can be intimidating for new starters, so focus on one-to-one sessions instead. This creates more space for the new hire to ask questions.
Efficient scheduling solutions make organizing these one-to-one meetings a breeze, and avoids the risk of two member scheduling a meeting at the same time. Scheduling meetings before someone starts also reduces any awkwardness over the new hire having to approach people to schedule meetings – it’s all there ready for them when they first start.
Training and mentorship are crucial parts of an employee’s progress. They can boost their skills and help them to work out which career path is for them.
For mentors and those conducting training, it reinforces their skills. They can even learn from those that they teach. It’s also great networking for everyone – you never know where your next great opportunity will come from.
Despite this, only 44% of companies offer a mentorship scheme.
Mentorship benefits employees at every stage of their journey. Don’t let the fact that someone is already a manager convince you that they already know everything they need to know. No matter how long someone has been managing for, there’s always a new strategy or technique they can try to motivate their team.
Training can be both internal and external, so be open-minded about the best place(s) for employees to build their skills. The best person to train your marketing team may not be someone who’s been there for years – it may be someone who can offer a fresh perspective on your strategy and help you to keep it relevant as algorithms continue to change.
Exit interviews are an often overlooked but incredibly valuable part of an employee’s journey. They give you the opportunity to examine why employees leave, and identify areas where your company may be failing them. Without this information, you can’t make positive changes to improve the working environment.
Conducting exit interviews using a framework makes it easier for you to quantify results. You can then pick up on reoccurring problems or praise. The more often something is raised, the more important it is to address.
Some questions you could ask include:
Using this information, you can start discussions with remaining team members about any common threads. You can then make informed decisions about how to better suit employees’ needs and (hopefully) prevent more from leaving for the same or similar reasons.
You can also home in on positive comments that are made, finding ways to further enhance these experiences. For instance, if employees benefit from flexible working hours, you could look into allowing them to work from home if they can’t already. If they like how the team encourages self-development, you could look into courses or events for the team to further develop their skills.
Employees are your business’s biggest – and best – advocates. If they share negative experiences with their social circle it reflects badly on you and may even cause you to lose customers. Leaving them with a positive overall feeling is therefore crucial. Exit interviews are just one part of this. Others include how the rest of the team reacts to their departure, handover periods, and anything else that happens on their final day. While you can’t control all of this, exit interviews help to cement your positive employer brand by showing employees that you care about their wellbeing from the start of their journey with you right through to the end.
When an employee speaks highly of you when they leave, they’re more likely to return for a future position, or even to recommend roles to their friends and family. Since referrals are one of the best ways to hire the right person for the job, this can make a huge difference to your hiring process, and further improving your employer brand.
It’s your responsibility to offer employees opportunities to learn, grow, and be more efficient in their role. Employees will then be more loyal and motivated, and turnover will decrease.It's also important to remember that there are many other elements that can impact employee satisfaction. Internal promotions, 360 feedback, and open communications are also key to reducing employee turnover. And don’t forget to make the technology that they need available to them!These investments and changes to company culture make a big difference. After all, reducing your employee churn rate can be the difference between business growth and stagnation.
Every six months Cronofy organises a companywide meet up. This May, we met in Amsterdam to give our teams the chance to see our recently opened office and the sights this wonderful European capital has to offer.
Developing how your company describes and represents itself is a challenging and enlightening journey. You have to revisit long held assumptions and confront the reality of what your customers and the market value. I absolutely believe that you can only do this effectively with outside help.