Recruitment & Retention Articles

After you've spent resources onboarding your new employees, the true task becomes retaining them. Finding top talent and keeping them around is what makes most growing businesses competitive. New technology and the changing workforce is shifting the age-old processes HR managers have relied on.


Retention: How to Stop the Revolving Door

05 June 2017
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Retention costs the company much less in terms of productivity and the process of finding and hiring new talent. The higher the employee turnover, the faster any organization can fall into oblivion. What causes high turnover and how can you limit it?

Many people in the workforce have heard the expression “revolving door,” used to describe businesses with high employee turnover and low retention rates. Are there industries that have historically high turnover rates? Yes. The “dirty half-dozen” are:

  • Retail, turnover 67%
  • Car sales/dealerships, up to 66% turnover rate
  • Food services, which includes restaurants, turnover 62.6%
  • Nurses, 18% leave jobs within 1st year, 43% turnover rate
  • Hospitality, turnover rate between 31%-34%
  • Child care, turnover rate 30%

So what can cause high turnover, and what can be done to stop the employee door from revolving?

High Turnover versus Low Turnover

There are companies with remarkably low turnover, such as Eastman Kodak, General Motors, Pitney Bowes and Xerox. Employees are engaged, wages are excellent, management is on point, and boredom doesn’t infiltrate the ranks, with the possible exception of what to order for lunch. Compare that to the red flags that wave at high turnover companies – wages that are not commensurate with responsibilities, indifference to the job and the company, boredom, and poor management practices.

The literal cost of a high turnover rate is astonishing. The world’s largest HR professional organization, the Society for Human Resource Management (SHRM), observed that it can cost a company anywhere from 90-200% to replace an employee, which has a profound impact on the bottom line. A high turnover rate also has a deleterious effect on employee morale.

How Much Turnover is Too Little?

Higher wage motivation has been an impetus for employee turnover and retention since the beginning of businesses, whether it’s ancient drachma or contemporary dollars.

PayScale is an online information service detailing salaries, benefits, and compensation packages. Its database has 55 million salary profiles from about 365 different industries. According to them, a retail sales associate’s median salary comes in at $21,000. The average annual salary for a food service worker ranges from a paltry $16,000+ to a bit over $30,000.

Managers and HR professionals should examine the industry standards for compensation, and see if there are things that can be offered that won’t have a ruinous effect on a company’s bottom line. And that leads to the next panel in the revolving door: a lack of employee engagement.

Disengaged Can Lead to Divorced

What is employee engagement? An engaged employee is passionate about his/her work, is whole-heartedly committed to a company’s mission, and strives to move the company forward to greater success.

So what are some perennial strategies for employee engagement?

  • Develop a company culture that inspires both employees and clients
  • Have regular and truly useful annual reviews
  • Make sure that employees have the right tools to do their jobs, especially in regards to technology
  • Focus on employee strengths, and utilize those strengths to move the company forward

And don’t overlook millennials. In 2015, they became the largest group in the US labor force. Paying attention to their wish list – including work flexibility – will serve companies well.

Both managers (especially front-line managers) and HR personnel can, in concert, tackle the issues that drag a company down – anywhere, at any time.

Good Employee Retention Avoids Snoozefests, aka “I’m Bored”

A comment that makes upper management wince is “I’m bored.” It’s worse when it’s said by personnel in their 30’s, because they may simply quit due to a lack of opportunities to learn and grow. So how can managers counter this complaint? By finding a way to ignite their employee’s curiosity. The old saying “Curiosity killed the cat” actually has a second part – “Satisfaction brought him back.”

Start by challenging managers to ask open-ended questions, such as “Which project that you’re handling is the most interesting and why?” Managers should engage an employee’s attention with regular training and development. And don’t forget about recognition. A company-wide memo congratulating an employee for smoothly handling a difficult client request, for example, is simple and valuable.

Bad Bosses Aren’t Just Cannon Fodder for Comedic Films

What makes the person a bad manager? That is a very subjective query. Poor management practices can be caused by a lack of training, a too-early promotion, a failure to communicate with employees, or characteristics found on a playground, such as favoritism or bullying. A good boss, on the other hand, develops consistent team communications, leads by example, and fosters good employee relationships. The front-line individual who can aid a frustrated employee with this issue is the Human Resources pro. And what if the bad boss’ boss is bad? It might be time to look for a new job.

Whether it’s retail, automotive sales, food services, nursing, hospitality or child care, there are tools to transform a high turnover company’s revolving door into a regular door. Look to HR. Let them do what you pay them to do.

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Joetta L. Wagner

Joetta L. Wagner is a researcher, writer and editor extraordinaire with over 20 years' experience. She absorbs information like a sponge absorbs water, and has been known to dazzle cocktail party patrons with an endless array of collected factoids. Her ruthlessness as an editor is an acquired skill.

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