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How To Reduce Employee Turnover?

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Employee turnover can be a big issue for your small business, and it can be costly. There are many reasons for high turnover and many of these are preventable. 

According to the U.S. Bureau of Labor Statistics (BLS) in 2022:

  • There were 77.2 million hires, an increase of 1.2 million from 2021. 
  • Total separations increased by 3.2 million in 2022 to 72.3 million. 

What Causes High Employee Turnover?

In 2022:

  • Government jobs had the lowest turnover.
  • Accommodation, food services, retail, and professional business services have the highest turnover rate. 

What are some reasons for high employee turnover? One main reason is employee dissatisfaction. That stems from low pay, an unfriendly work environment, long hours, or a lack of appreciation. Every employee is different. Furthermore, some are motivated by money, some by having a flexible schedule, and others by the type of work they do.

Work flexibility has also continued to be a very high priority for candidates and could be a key lever in reducing turnover.

How to Keep Your Employees

While zero percent would be an ideal turnover rate for any business, the reality is it’s very hard to achieve. Each employee’s circumstances are different. What is important to one employee might not be to another. Furthermore, the challenge happens when you’re a small business or just starting out where money is tight. 

You may be a janitorial company or a landscape business that pays their employees the minimum wage. Although it would be nice to pay your employees higher wages, the reality is most of the time your budget will not allow it. Additionally, when your competitors are offering the same salary, what makes your employees want to stay with you? Given the same benefits as your competitors, what gives you the edge over your competition?

When we started our business, ezClocker, and hired our first intern, we paid her more than her previous non-tech minimum wage job paid. However, in comparison to other startups, we didn’t pay her more than what other software companies offer. We didn’t have great perks or a sleek office that bigger companies had, but what we did do is give her work that she was responsible for. She was an equal contributor to the team with a flexible schedule.

In the end, her engagement scores were high, and she told us she loved working at the company. Nothing we did cost us any extra money; it is simply treating your employees right and trying to figure out what motivates them. If you’re not sure what will make your employees happy, just ask them. 

Need an Affordable Time Clock App for Your Employees?

Ways to Reduce Employees Turnover

Besides talking to your employees to find out what makes them happy, here are some other suggestions. 

Ask them questions such as, “give me examples of what would motivate you at work?” Conduct employee surveys if you would think people would respond honestly. Let them know your intent and what information you are seeking. Find out what makes your employees happy

Here are some ways to improve employee engagement and lower turnover. Many of these are low-cost and show your commitment to your workers. 

Hire Good People

To hire the right people for the job, you should define the specific skills, experience, and qualifications required for the role. Then, create a job description that clearly communicates these requirements. 

Targeted recruiting will attract qualified candidates that fit your needs. During the interview process, ask behavior-based questions that assess the candidate’s fit for the role and company culture. 

Furthermore, consider using tests to assess the candidate’s technical or job-specific skills. Then finally, check references and conduct background checks to verify the candidate’s work history and credentials.

Provide Opportunities for Professional Growth and Development

Although you may own a small business and not have the growth opportunities as bigger companies do, there are other ways to offer growth and development.

As your company grows you will want your great employees to stay with you. Find ways to offer continuing education and job training opportunities. For example, maybe you see an employee that would be great as a team leader but they have no experience. Find management training classes they can attend and prepare them for that role as your small business grows. Investing in your employee’s development shows your commitment to them. 

Offer Flexible Schedules

I have a friend who told me once that one of the main reasons she is not leaving her job (her skills are in demand and she can find another job easily), is her current boss allows her to work from 6 a.m. to 3 p.m. in a traditional 8 a.m. to 5 p.m. environment. 

This allows her to pick up her kids from school and be with them. Having a flexible schedule made all the difference. It wasn’t the pay or the type of work. Plus, this also didn’t cost the employer anything because she was putting the same number of hours in as a regular schedule. If you can, offer a flexible schedule that will work around your employee’s life and passions.

Provide Good Leadership Skills

Ensure you are listening and appreciating your employees. This is important to them. Give them regular feedback in a monthly meeting. Additionally, talk about the status of the business and get input from them for ideas on improvement. Make sure you follow up and have action items because if employees are asked for feedback and they see no action, they will not trust you and stop giving you valuable input. 

If you get a compliment from a customer about the work your employees have done, share that and reward them for it. Just because you are a small business does not mean you can’t operate like a professional business. 

Put good systems and processes in place so employees are not confused about what to do and they can easily know what is expected from them. If you put a sign out on your door saying customers are our number one priority, then make sure you reward your employees when customers are happy with the service. 

Make them feel they have an impact on the company and its brand. If you don’t have good managers with great leadership skills, consider training or replacing them. Bad leaders cause high employee turnover. 

Treat Them Like Family

Being a small business has its advantages and one of them is the business can feel like an extended family. Unlike big corporations where employees are just a number, you can make your business different by giving it that personal touch. 

One of the first jobs I had was at a company where the owner sold the business to a bigger corporation. He made sure no one would be laid off for one year and offered a bonus. He also ensured his people were taken care of when he was selling his company. His employees were loyal. They wanted to work for him again if he ever opened another business, which he eventually did. 

Build loyalty where your employees will follow you anywhere you go. If you take care of them and show you care, they will be loyal. 

Address Employee Concerns and Grievances 

As mentioned above, if you don’t listen to your employees, they will stop giving valuable feedback. By listening, you should also respond. If you have a great worker who is having babysitting issues, is there some way you can help them such as flexible scheduling? 

If they are upset with something, it is vital to find out if there is any way you can help. It could be their frustration with simple things like technology issues, miscommunication with their vacation schedule, or some grievance that is easy for you to help fix. 

One issue that some people have with small businesses is the lack of technology that bigger corporations have to make their jobs easier.

For example, make sure you have good technology. Nothing is more frustrating than when you are trying to do your job and the technology keeps breaking. Sometimes it’s the lack of technology. If you have slow computers, bad work equipment, or are needing good software, it can be frustrating to those that need good technology to do their job. Even simple things such as your timekeeping system can help keep great workers and leaders. Paper timesheets can be an issue when something is missed, and it affects their pay. 

Offer Unique Benefits

The most popular benefits workers look for are traditional health and retirement benefits. If your budget won’t allow it, then consider some unique benefits which will make you different. 

There are several low-cost benefits you can offer your to help reduce employee turnover. 

If you employ millennials offer them one year of free Spotify premium membership or host a bring your dog to work day on Wednesdays. If you have a slow week like the holidays, give them half the day off and pay them for the whole day. These perks might not apply to your business, but the idea is to think of small unique benefits that do not cost much. This helps make the work environment more friendly and creates happy employees.

Ensure you really listen to your employees about what they want. Be creative and gather up different ideas. There are many reasons for turnover, but there are many ways you can control it if you listen to what your employees want. For many people, they would like to work at a company with flexible hours, good leadership, good work equipment and technology, and fun perks. 

Let’s face it, without your employees you have no business. Make sure you focus on employee turnover, keep great talent when you find it, and take care of them. They will give your company the competitive advantage you need to succeed.


Author: Raya Khashab

Raya is the CEO and co-founder of ezClocker. She is passionate about customers and building products that change the way people run their business. She is also a big supporter of the startup community and helping people achieve their dreams.