Predict your employee turnover with advance payroll software

Companies face one of their biggest challenges: retaining and recruiting employees with payroll software. Successful companies recognize the importance of their employees and constantly seek out strategies to retain them.

Businesses are losing money due to rising labor costs and high turnover. According to The Conference Board’s 2020 report, if this trend continues, U.S. corporate profitability will reach lows not seen in the 1980s.

Employee turnover measures how often employees leave a company. It is usually measured every month, quarterly, or annual basis. Voluntary and involuntary turnover are both included in the turnover rates. It includes people who leave the company to seek new jobs or education opportunities or retire (voluntary) and those terminated by the company for misconduct or performance (involuntary).

What causes employee turnover?

Many studies are conducted each year to examine employee turnover. The causes vary, but they all show the same thing. Most employees leave because they want more money and better benefits. They also leave because their managers are ineffective.

Many of these problems can be attributed to company culture. It could include the company’s values and career opportunities, pay and benefits, work-life balance, and the impact of senior leadership. Culture, pay, and the retention of employees can all be predicted.

Manage your Employee turnover with Payroll Software

Why is it important to reduce employee turnover?

Employee turnover can hurt company profitability. It is essential to have enough employees with the right skills to achieve business goals and plans. Finding the right people becomes more difficult (and expensive).

Finding the right candidates can be costly and time-consuming for businesses. Hiring people is taking longer. Most organizations have increased the starting salary for salaried positions, while half of the other companies have increased the hourly pay. It is why it’s important to reduce turnover.

Tips to Reduce Employee Turnover

What can you do to retain high-performing employees and contributors in your business? Many employees leave because they are unhappy with their jobs. Small changes to work-life balance, management relationships, compensation, and other factors can help reduce turnover.

• Hiring the right people is key. 

Recruitment is partly to blame. Recruiters need to be upfront about the culture of the company. They must tell the candidate what they want and how it operates. It is important to ensure that the recruiting team is seeking the right person when hiring. According to Jobsite, less than half of workers believe job descriptions accurately reflect job responsibilities. Nearly a third have quit a job within the first 90 days simply because they didn’t like it.

Many organizations have increased their success rate in hiring new employees by allowing others to take the hiring decisions. Organizations must spend time getting to know each candidate. It is best to visit the candidate in person and observe how they interact with co-workers.

• Offer competitive salaries and total rewards to keep up with the market. 

These are the main reasons people accept jobs and show up to work every day. It is also the top reason professionals leave their jobs. Therefore, it’s not surprising that workers would be more likely to stay if offered higher wages.

Start by offering a competitive starting salary to attract talented and qualified candidates. Companies should offer regular raises and keep an eye on what companies pay for similar positions, especially when they are hard to fill. Companies should expect to pay higher salaries for people with high-demand skills.   

• Keep an eye on toxic employees. 

These people criticize others, gossip, make assumptions, and look out for their interests. These employees can drive high achievers from the organization. A McKinsey survey found that trusting colleagues and leaders can positively affect employee engagement, wellbeing, and quality of work. Relationships and turnover are directly linked.

It can be difficult to spot toxic employees, but it is crucial. How can you spot them? To change their behaviour, look for these traits and have conversations.   

• Recognize and reward employees.

It can be a simple way to reduce turnover. A simple thank you and note of appreciation for employees’ hard work can make a big difference. Another great way to show appreciation is to give staff new opportunities.

It is where the manager can make a huge impact. Positive feedback from their manager is significantly more likely to make employees feel engaged. Only a small percentage of those workers are actively seeking a job.

• Flexibility

Employees value job flexibility.  It is one way to increase retention.   Flexible work doesn’t just include telework and remote work. Flexible work can be teleworking or remote work. It could include flexitime, where employees work a set number of hours but have the option to choose when they work, a compressed workweek, part-time schedules, or a job-share, in which workers work from home.  

• Prioritize work-life balance. 

Many employees find it difficult to maintain a balance between work and family. It can cause burnout, leading to them seeking out a new job. According to Jobsite, more than half of workers believe their employers encourage them to work weekends and after-hours.

Employers are looking to improve worker retention by offering remote work and flexible scheduling. According to the Work Institute, the number of workers who quit their job due to commute times has increased by 400% in the past decade. Remote work can address this issue. It is important to give employees time off and to respect that time.

• Pay attention to employee engagement. 

Higher employee engagement means lower turnover rates. Businesses have made many efforts to increase employee engagement by focusing on their emotional and social needs. These needs manifested in many ways, including interesting spaces, free food and annual company trips. These things have not helped to increase engagement.   

Some companies do not operate in industries that encourage a deep connection with the work. These businesses can still identify and cultivate individual motivations in employees to help the company achieve its goals. Focus groups and employee engagement surveys are great places to start, provided that the management reviews and acts on them.

• Develop and define corporate culture.

These beliefs and attitudes influence the workplace culture and the employees’ experience. Employee satisfaction is directly affected by culture.

Retention of certain employees is more dependent on culture — almost half of those with advanced degrees and kids cited culture in the Jobsite survey as very important. Without first understanding your company’s culture, you can’t change it or make it stronger. It can be done with many tools and consultants.   

• Standardize performance evaluations. 

Unproductive or infrequent performance reviews are another predictor of turnover. The software allows for the performance review to be reimagined as a collaborative, dynamic, and continuous process that aligns manager and employee in goal setting provides an opportunity for reflection on progress and rewards high performers.   

• Provide opportunities for continuing education and development. 

Employers care about developing new skills or strengthening existing ones. According to the PwC survey, Americans looking for work in the United States said they would be willing to give up to 12% of what they earn in return for greater training opportunities and more flexibility.

When it comes to training, think creatively. Staff members may not find traditional, long-term classroom training or travel-intensive sessions the most effective use of their time and provide the engagement they desire.

• Create career paths and growth opportunities. 

LinkedIn reports that employees are 41% more likely to stay at companies that focus on internal hiring than those that don’t. LinkedIn reports that companies are increasingly looking inward with the number of role changes (transfer, promotion or lateral moves) increasing by 10% over five years.

Employees shouldn’t be afraid to apply for roles in other departments. Internal recruitment must be uniform. Managers are reluctant to let go of talented employees, which is one of the biggest barriers to internal recruitment.   

• Soft skills are important. 

Creativity, problem solving and creativity are essential skills for any employee. Companies should look for candidates who are creative, persuasive, adaptable and have emotional intelligence.

It is something that certain companies excel at. Trader Joe’s director for recruitment and development stated in an episode of “Inside Trader Joes” that the goal of training isn’t just to develop great leaders but to create content that encourages people to be their best selves, regardless of their role.

• Communicate clearly with your employees.

Leadership recognizes the importance of better communication with their employees. You could communicate with employees through town halls, one-on-one meetings between managers (true) and team members (true), or surveys on employee engagement. An HBR study found that employees are more engaged when senior leaders regularly communicate the company’s strategy. It can help boost performance and increase employee engagement.

• The focus should be on onboarding. 

It is the first time a new employee knows the organization’s culture. A poor onboarding experience can be very difficult to overcome. Negative onboarding experiences can make it twice as difficult for employees to seek new opportunities during their tenure.

Even small improvements can make a positive first impression that will last. Employees are more likely to stay with the company for many years if they have a positive onboarding experience.

• Analyse turnover data to identify issues. 

It will make it easier to develop, retain and promote your top employees. The software can provide information on a turnover by quarter, year, voluntary vs non-voluntary, business unit and department, as well as historical trends. It can reveal trends and insights that could positively impact an organization’s talent management strategy.