Two of the most important recruiting metrics to consider when evaluating employee turnover statistics is the reasons why employees leave a company and the cost of high turnover. Although there are factors beyond a company’s control, companies directly impact numerous aspects that lead to turnover rates. For instance, Paychex reports that nearly 70 percent of employees indicate that they left their company due to low salary while 53 percent also admit that they felt employers didn’t care about them as an individual contributor.
Why is this so important to your company? Research shows that millennials are more inclined to accept a new offer if it promotes higher wages, flexible schedules and growth opportunities. In fact, Recruiting.com has reported that from 1983 to 2016, U.S. workers from ages 25-34 consistently show the shortest tenure with a high of 3.2 years in 2012 and a low of 2.6 in 2000. This means that in addition to new roles, HR departments are constantly worried about back-fill. Further, according to a study conducted by the Society for Human Resource Management, employers will often end up spending six to nine months of an employee’s salary to locate and train a replacement for them.
What does this all mean? Turnover leads to production loss – which also equates to money loss. If a business is growing or in a high turnover industry, it must take recruitment seriously. If the business takes recruiting seriously, it must choose a vendor that takes recruiting seriously. The best way to maintain a healthy turnover ratio is to ensure that your company has the right tools to reduce turnover altogether.
Select the right people: The Harvard Business Review points out that as much as 80 percent of employee turnover is due to bad hiring decisions. If recruiters aren’t finding top talent, then hiring managers can’t select the best candidate for the role. This is a formula for disaster as it often leads to a lackluster employee who may not be committed to the company vision. Hence, they are less likely to commit to being a long-tenured employee.
You can start by implementing assessments that align with your company’s vision and culture. Make sure you’re hiring a person with the right skills and the right attitude by employing someone who is passionate and driven about their everyday tasks as well as the “bigger picture”. It’s also important to reiterate these passions in weekly 1-on-1 meetings between staff and managers, quarterly company meetings, performance reviews, and career path discussions. If you hire a passionate, hardworking person, that’s great, but make sure they stay that way by checking-in and doing so often. Employees can easily become discouraged if they never hear from management about upward mobility or opportunities for personal growth – especially if they deserve it.
Offer competitive wages and benefits: When it comes to money, every penny counts. With technology such as Glassdoor’s salary calculator, people have access to industry standards regarding fair wages and benefits for their particular role and can even pinpoint that number to their location. Having all this information allows candidates and current employees who are browsing open requisitions to find out if what they are earning is a fair market value. If an employee finds out that they are worth more than what they currently earn, they will quickly begin filling out those online applications to see if they can get a better offer somewhere else.
Start by offering competitive wages and benefit programs. Ensure your HR department is not only offering fair wages and viable benefits, but that they are also creating growth plans and sharing pay grade information with the company. If an employee knows what his/her career trajectory is, they may feel more confident in growing within the company.
With a passion for life-long learning, Danielle McClow got her start in higher education before joining iCIMS as a Content Writer. She holds an advanced degree in classic rhetoric and when not writing she wishes to pet all the dogs.