Employees usually come and go and at some point, you can expect to lose a few workers. The service sector is notorious for high employee turnover at 30% with the average for all industries standing at 13%. Millennials are also partly responsible for the increased employee turnover since they are more likely to switch jobs than their older counterparts.
There are some costs attached to losing employees and an organization with high employee turnover can incur heavy losses including the time taken to find new workers. When the bounce rate for new hires gets too high, you cannot get a return on your investment especially when you factor in costs for training and recruitment.
A high bounce rate for new employees is an indication of something wrong with your hiring process. Here are a few ways to reduce new hire bounce rate:
Formulate a Comprehensive and Competitive Benefits Package
One way to retain new employees is to compensate them handsomely. Apart from needing enough money to pay for living expenses like food, rent, and utilities, employees want to know they are compensated in other ways too. Moving to a better paying job is one of the major causes of employee turnover and paying well can prevent this.
To get a feel for a fair salary, research on what competitors pay for similar jobs in your area e.g. how much do accountants make in your area. In addition to salaries, add some benefits like life insurance, disability insurance, 401K and pension plans to retain new hires. When dealing with millennials, keep in mind that they’ve witnessed the financial mistakes of their parents and are keen on additional benefits.
Hire the right person for the job
When interviewing new employees, make sure you hire the people who are most capable of doing the job. This way, you get a return on your investment. Do not hesitate to hire smart people or people with the ambition and potential to become stellar employees.
Smart people are more flexible and their versatility will be of benefit. One major reason that people give for leaving a job is that it was not what they expected. To counter this, clearly, define the roles to the interviewee and ensure they are familiar with what will be done on the job.
Another consideration for hiring is choosing someone who will fit with the company culture; that is if it’s important to you. Cohesion with other employees will encourage new employees to stick around and consequently reduce new hire bounce rate.
Reward employees and recognize their efforts
Employees are humans and will greatly appreciate if you recognize their efforts. When your workers go overboard and produce excellent work, complete a project well before the deadline or perform any other notable action, congratulate them. Doing this in front of colleagues is more effective as they will feel motivated by your acknowledgment.
You don’t have to shower them with praise for everyday tasks, only for notable achievements. Another effective way to reward employees is to tie tangible, financial rewards to certain feats. Giving bonuses to high performing employees in front of the colleagues will encourage new employees to work towards the preset goals and reduce employee turnover.
Additionally, you can create a career path for your employees so that they don’t feel like they landed in a dead-end job. Although it may seem obvious, most companies do not offer opportunities for growth like raises and promotions. When career advancement options look bleak and a new hire finds the other employees looking miserable and downtrodden, they won’t think twice about leaving for greener pastures.
Create a positive working environment
To create a positive work environment you have to factor in a good work/life balance. This involves flexible starting and ending times so that they have enough time for other activities. Many a new employee is put off by inflexible working hours and swaps jobs for more flexible hours.
A study by a Boston organization concluded that 80% of workers and 76% of managers agree that flexible hours contribute to employee retention. Remember that workers spend close to half of their day at work and a positive environment will go a long way to increase engagement.
Additionally, a conducive environment will improve the worker’s performance and boost productivity which works in the company’s favor. A good example of a superb work environment is Google, whose Googleplex building looks more like an adult playground than an office complex. Google also offers free food, health benefits, massages and haircuts, video games, gym and swimming pools to employees. Although this increases the running costs, it effectively cut down employee turnover and dissatisfaction.