Techniques for reducing employee turnover rate

Employee Turnover: How to reduce

High employee turnover rates are a major problem across several organizations globally. So much is spent on recruitment and training and then the employees leave for reasons that may look inappropriate. Several times managers are in a fix over how to prevent it or reduce the churn rate since it hurts the bottom line. Retention programs are considered a solution but unless they are well designed, they can fail to achieve the desired purpose.  A high turnover rate means increased HR costs.

Usually, it costs double that of an employee’s salary to hire and train a new one. Achieving the right turnover rate is not easy and companies do not want to lose the best talent they have hired. Apart from the HR costs a high turnover can also damage employee morale of the existing employees. Now, organizations do several things to manage their turnover rate from perks to motivational techniques. Sometimes, they are effective, sometimes they are not.  It takes a multi-pronged approach and HR managers must focus on several things to bring the turnover rate under control.


First the focus must be on hiring the right people. If a company hires the right people, it can retain them loner. If the hired person is not the right match for the position in your organization, then the problems start right after hiring. This is a very effective way of reducing turnover. So, organizations must focus on hiring the right people with the right skills. Apart from it focus must be on finding the people who match the organizational culture. It is easier for such people to fit in and   be a part of the team. They find it easier to mix with their co-workers and experience less stress. So, planned recruitment is effective at reducing the turnover rates inside organizations. It has several other benefits too. Most important one of them is increased productivity. Thus, an effective recruitment strategy has a double benefit.

Compensation and Benefits:

If a company is experiencing a high turnover rate despite hiring the best, it must revisit its compensation strategy immediately. Having the right mix of compensation and benefits has also been found to be effective at reducing turnover rate. It improves employee morale. The better the payment, the more motivated are employees to work longer for a particular organization. The HR department must research to find out the most current data on industry packages and use its own creativity regarding benefits and perks.

Allowing flexible work schedules and bonus can also effectively reduce turnover rate.  However, the HR’s task does not end here. The packages once set must be reviewed annually at least. HR should keep reviewing the industry trends and accordingly update the existing policy and packages. Employees are looking for exciting packages and benefits apart from less work stress. So, allowing flexibility in their work schedules motivates them and helps retain them longer.

Employee needs:

Employee management requires mush more than just creative packages and a great recruitment strategy. There is also a need to pay personalized attention to each individual employee. HR managers must try to understand employees’ personal needs and accordingly provide benefits and flexibility. The employee needs differ from one to another employee. So, there is a need to provide personal attention to each one.

Employee engagement:

Employee engagement is also a key to retention. Long term retention of your best talent depends on how well your company has engaged them. Apart from a rewarding work environment, employees need several other things too. They also need a challenging work environment. If the challenges are too small, the employees start losing interest and focus.  Employees also need respect and recognition for what they are doing. Not just this, learning and growth are equally essential otherwise, work becomes boring.

So, to engage employees better organizations must focus on all these things and try to engage them from new angles. Creating a learning environment is not difficult and can be made possible through the collaboration of line and HR managers.  Another important aspect of the same task is communication and companies must try to introduce informal channels of communication. It reduces the pressure and tension in the environment and employees feel more engaged.

Set clear goals:

Employees need clear instructions. Confusion can be dangerous for productivity and performance. So, supervisors must set clear goals for their employees. It is good to challenge your employees but they must know what they are going to do. Employees need clear directions over what is expected of them. If they feel lost, they start losing motivation and this becomes a reason for leaving the company early.

Positive work environment:

Most often work stress results from a negative work environment.  A place where bosses are difficult to please and recognition is very hard earned is not suitable for anyone to work in the long term. Rewards and recognition must go hand in hand with work. Too much of negative reinforcement kills motivation and then productivity.

Managers must take time off to provide their employees with feedback and the focus must not be on just criticizing but on providing creative feedback that helps and keeps employees motivated. Positive feedback is just as essentials the rewards and recognition.

Sometimes what a big reward cannot achieve, can be achieved by a simple letter of praise. Whether it is a person or a team, it is critical that frontline, midlevel and top level mangers take time to appreciate their work and achievements.  Accomplishments must not be ignored or it will add to the employees dissatisfaction.

Managers must also focus on creating a politics free environment. Having anti-discrimination and anti-harassment policies also helps at creating a positive work environment. If you are trying to reduce your turnover rate and retain talent for longer, focus must remain on both employee engagement and empowerment.

Performance management:

This is an important area needing keen focus from both line and HR managers. They must focus on creating the right performance management strategy. Not just once a year but performance management must receive focus all the year round. Managers must provide employees with on-going feedback. Employees must be provided with clear and challenging career paths. Managers must provide guidance on how the employees can achieve their career goals and ask them to come forward with their career related questions throughout the year. Several organizations also provide in-house career counselors. This is also an excellent strategy.

A high turnover rate can have major costs. In some industries, it is considered natural to have high turnover rates like the technology industry. However, managers must still focus on reducing it. Hiring a new employee can be costlier than retaining an old one. There are several things that  would need to be checked and put in order to ascertain that employees are getting and positive environment that  facilitates learning and growth. Adding exciting opportunities to their tasks helps them overcome boredom and keeps them engaged.