3 Strategies for Reducing Employee Turnover

3 Strategies for Reducing Employee Turnover
From Recruiter - October 15, 2017

As the historically low unemployment rate continues to sustain a candidate-driven market, it is important for employers to consider the needs and wants of their employees if they are to attract new talent, retain existing talent, and avoid costly turnover of talent.

The job landscape is as competitive as I have ever seen, so much so that we have seen candidates leave their jobssometimes in the middle of trainingfor another company offering more money or better benefits. This turnover can cost companies upwards of $100,000 after factoring in lost productivity, OSHA costs, and the costs of recruiting and training new hires. According to Adeccos real cost of minimum wage calculator, if a company pays 100 employees $9.51 per hour, the monthly turnover rate is expected to be 16.9 percent, which results in a monthly turnover cost of $101,400.

Here are a few strategies for companies to consider when looking to reduce turnover and recruit talent:

1. Offer Fair Pay

Its no secret that wages and salaries are chief among the factors that determine an employees decision to accept or reject a job offer. According torecent SHRM survey, 95 percent of employees view pay as an important factor when deciding to take a job or stay at their current company, yet only 65 percent of employees are satisfied with their overall compensation and pay. If an employee isnt being offered a competitive salary, they will most likely move to a company that better fits their needs.

While there is no one-size-fits-all answer for exactly how much to pay employees, our recent researchfound that paying too low of a salary increases turnover rate. For instance, a company with more than 1000 employees that offered an average wage of $13.18 instead of $9.51 saw its turnover rate decrease from 16.9 percent to 8.2 percent. This, in turn, decreased monthly turnover costs by nearly half, from approximately $1,014,000 to $522,000.

Companies should implement processes that allow them to monitor what competitors in the industry are offering to ensure salaries are competitive with the market rate.

2. Provide a Competitive Benefits Package

There is no doubt that pay is an important factor when an employee is deciding between companies, but the overall benefits package can also play a major role.


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