Every time someone leaves your company, it costs you money — and more than you may think. According to a study by the University of Wisconsin, replacing a $9.50-an-hour employee costs more than $2,200 when you factor in the hiring and training of a new worker. (To determine the replacement cost for one of your staff members, plug your numbers into this Online Employee Turnover Calculator.)
So how do you avoid losing good people? Here are four tips for reducing employee turnover:
- Implement a trial period. Making sure that a new hire is a good fit for your company improves retention — and prevents you from investing heavily in someone who is unlikely to stick around. Implement a trial period during which both you and the new employee can assess whether the relationship works. For instance, Engage Direct Mail gives new hires a 90-day trial. Although 23 percent of employees leave during that period, among those who remain the retention rate is a sky-high 95 percent.
- Provide advancement opportunities. Employees may become frustrated if they aren’t given a chance to improve their skills or pay grade. Provide access to training opportunities such as workshops, seminars, conferences, and even certification courses on the company’s dime. Once they’ve mastered new skills, offer raises and promotions.
- Offer flextime. Working parents are especially likely to leave a company if they’re unable to fit family obligations into their schedules. Offer eligible employees the opportunity to work flexible hours and telecommute when possible. An internal survey from PricewaterhouseCoopers found that 93 percent of workers who made use of flextime considered it a major factor in their decision to remain with the firm.
- Keep your team happy and healthy. In addition to a traditional benefits package (health insurance, retirement plan, paid vacation), consider offering extra perks such as a laptop the employee gets to keep after a certain period of employment or a weekly free lunch. Keep a close eye on interpersonal relationships in the office, too, and step in to help manage conflict if a hostile situation begins to brew. If you have the budget for it, consider offering an on-site wellness program: In a Principal Financial Group survey, 45 percent of respondents at small and mid-sized firms said they’d stay at their jobs longer if they had access to wellness services.
Help Your Business Thrive
Get our Newsletter