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How To Reduce Employee Turnover?

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According to the U.S. Bureau of Labor Statistics

  • In 2018, there were 68.9 million hires, an increase of 3.3 million from 2017. 
  • Total separations (quits, layoffs and discharges) rose by 2.6 million in 2018.
  • Voluntary resignations rose for the ninth consecutive year reaching 40.1 million in 2018, up by 2.4 million.
  • The annual total separations rate for 2018 was 44.3%
  • Voluntary resignations are 26.9%

What Causes High Turnover?

As of 2018, the fast-food industry is experiencing very high turnover-150%.  This means if you started the year with 20 employees, by the end of it you would need to replace 30 of those employees. 

Employee dissatisfaction causes high turnover. 

It also can be caused by low pay, an unfriendly work environment, long hours, or 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.

According to one survey of 10,000 people, workers said they left their last job because:

  • Lack of opportunities for advancement (45%)
  • Unsatisfied with leadership (41%)
  • Did not like the work environment/culture (36%)
  • Wanted more challenging work (36%)
  • Unsatisfied with pay and benefits (34%)
  • Unsatisfied with rewards and recognition (32%)

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. Every 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 who 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 out there offer. We didn’t have great perks or a sleek office or any of that stuff you hear on the news, 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. 

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Employee Engagement Ideas

Talk to your employees. 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 that is either free or inexpensive:

Flexible Schedule

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.


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 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 my 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. 

Offer Unique Benefits

The most popular benefits folks look for are the 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 employees. 

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 of 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, and fun perks. 

Let’s face it, without your employees you have no business. Make sure you 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.