Workrede Blog
High Turnover, How to Improve Employee Retention in 2023
The unprecedented high turnover companies are currently experiencing has many names, the Big Quit, the Great Resignation, the Titanic Turnover, and the Great Reshuffle. Regardless of what you call it, this trend has been going on for over ten years and shows no sign of slowing. In fact, according to Katherine Ross’ interview with ZipRecruiter CEO Ian Siegel, the “post-pandemic job-seeker” is here to stay. So what can you do to improve employee retention and reduce turnover?
- According to Statista, over 4 million US employees have voluntarily quit their jobs in 17 of the past 19 months, exceeding pre-pandemic levels by over 20%.
- According to Gartner, companies with a 20% turnover rate pre-pandemic could be facing a turn-over rate as high as 24% for years to come. A company with 25,000 employees would need to prepare for and find an additional 1,000 new employees, or a total of almost 6,000 employees a year.
- A report from McKinsey showed that 48% of workers are when quitting their current job move to an entirely new industry.
Increasing employee engagement will lower your high turnover rate
Employee retention is a top priority for business leaders and human resource professionals. It costs less, provides stability, and ensures consistent quality within the organization. Several things can quickly be done to lower high turnover, hold onto critical employees, and boost your employee retention strategy. According to the (SHRM), greater employee job satisfaction and lowering high turnover depend on these five key factors:
- Respectful treatment across the company of all employees at all levels
- Compensation/pay
- Trust between employees and senior management
- Job security
- The opportunity to use their skills and abilities at work
When you look at these five factors affecting high turnover, four of them can be addressed with employee engagement and communication. With a meaningful connection with your workforce and two-way communication, it is possible to create mutual respect, trust, and a sense of security and understand the training and opportunities each individual is looking to gain.
A 2020 Retention Report from the Work Institute shows that among respondents, the number of employees that quit their jobs within the first year is almost 40%. Among these employees, two-thirds left in the first six months. Gallup recently reported replacing a full-time employee can cost half to two times that worker’s annual salary. These organizational and financial costs include:
- Onboarding process and recruitment costs
- Training costs for new workers
- Operational costs due to inefficiencies
- Staffing shortages and operational delays
- Increased burnout and lower employee morale
- Loss of experience and employee knowledge
- Loss of leaders and innovative thinkers (This is considered an opportunity cost.)
- Reduced quality of customer experience due to staffing inefficiencies and inexperience
SHRM factored the average cost of new hires alone to be around $4,100. Add related expenses such as training and onboarding, team development, skill gaps, productivity, and opportunity cost, and that number swells dramatically.
Why would companies not invest in creating communication across their workforce?
Could you name another investment that would return a higher or immediate return on investment better than keeping your current employees? Yet many companies that quickly provide desk-bound employees with dozens of apps to improve their job quality and productivity are reluctant to invest in a simple communication platform to connect their frontline workers. Our latest research shows that this is often a generational issue, with older management needing to appreciate the value-creating this connection with non-desk employees can have.
As a group of younger leaders replaces this generation, the application of employee engagement increases dramatically. If it were easier to teach an old dog new tricks, high turnover and the Great Resignation wouldn’t have acquired the momentum it has achieved. Be prepared for 2023 and beyond by engaging your employees with meaningful connections; it will pay for itself many times over with reduced costs, improved efficiency, and higher productivity.
Sign up for a free trial of Red e App today to learn how our powerful tool will help you address high turnover, increase employee retention and create an engaged workforce.