7 Tips to Reduce Employee Turnover

1. Recruit the right talent

Hiring processes differ by organization, but the main goal should be to make your process thoughtful and selective. To start, you must make sure would-be employees know what they’re getting into. Recruiters must be upfront about the company culture and the role’s requirements, rather than simply selling candidates on the position. Setting clear job expectations during the hiring process can help ensure that new workers are confident and productive from day one, while reducing the risk of attrition. To set clear expectations in terms of skill set, managers and HR leaders must first have a clear understanding of the skills required to reach the company’s goals.

Hiring managers need to think not only of the skills needed for an employee to thrive on day one, but also the skills that will contribute to a long-term career within the organization. To achieve this, consider inviting existing employees who would work with the candidate into the hiring process. Having candidates interview with their potential colleagues will give them a better sense of the organization’s culture and behaviors. It will also help them make a more confident decision about whether they’re a good fit. Identifying and attracting people most likely to thrive within your organization—and, thus, stay long term—might require specialized headhunters and the support of the latest AI-based recruiting tools.

2. Reward and recognize employees

This is a simple yet often overlooked strategy for reducing turnover. Recognizing and showing appreciation for your employees’ accomplishments contributes to a happier, more productive workforce that is more likely to stay with the organization. It’s not enough to recognize employees during year-end reviews, or after a major milestone such as the completion of a year-long project. This recognition should come through formal means such as an official review process, but also through in-the-moment, peer-to-peer acknowledgment. Ultimately, it’s about creating a culture of recognition.

In a 2022 Gallup-Workhuman survey of 7,636 US workers, only about a third said their workplace had a formal employee recognition program in effect. Yet in its analysis of the survey data, Gallup concludes that companies with an engaged workforce of at least 10,000 employees stand to save up to $16.1 million in turnover costs per year “when they make recognition an important part of their culture.” In fact, survey respondents who said they had positive recognition experiences at work also rated their everyday lives more positively than employees who didn’t feel meaningfully recognized for their work.

3. Create set career paths

Lack of career growth opportunities is a major reason that people leave organizations. Ambitious employees need to see a clearly defined career path ahead of them, one that includes some mix of higher-level responsibilities, better compensation, and, yes, a more prestigious title. Managers need to set regular meetings with their people to discuss their career goals, present opportunities, and chart a path forward. Business leaders must understand that “career paths” can look more like uncharted territory to many employees. They may not know what options exist to expand their skills and explore new opportunities within the organizations. As well as making employees aware of these options, managers must show their employees the personalized steps needed to get there—what skills they lack, the experience required, and the people, projects, and learning that will help. If organizations don’t help them understand these various career paths, employees will head toward the path that’s always clear—the path to the exit.

4. Encourage work-life balance

Work-life balance means different things to different people. For some, it’s about having a flexible work schedule that allows them to take care of personal matters as they arise. For others, it’s about a break from always being on call. And for others, it’s about more vacation time. For almost everyone, though, it’s about relieving the stresses of the job.

A 2021 survey by the Work Institute found that 11% of turnover was caused by work-life imbalance, including the stresses of work travel, commuting, and scheduling. Poor work-life balance can cause employees to leave due to burnout. It can even hurt a company’s reputation overall. Remote work opportunities, flexible scheduling, more generous vacation policies, and limits on after-hours work requirements are a few simple strategies to help employers shift the balance and reduce turnover. Ensure that your organization’s work-life balance policies aren’t just documented, but are integrated into your company culture—with full buy-in from leadership.

5. Provide learning opportunities

Employees who have access to personalized learning and development opportunities will not only strengthen or acquire skills that benefit the organization, but they’ll also be more satisfied, engaged, and less likely to leave. Consider providing job-related education reimbursement and a budget to attend in-person conferences. Since people learn in different ways, offer employees different types of training—traditional classroom, virtual, on-demand, and so on. By training employees in this way, you also have the opportunity to move them into new roles, which can benefit your business in many ways. For one thing, it can be faster and a lot less expensive to train and reskill existing workers to fill skills gaps than to recruit new ones. Keep in mind, though, that learning needs to be personalized to be relevant to each individual employee and valuable to the company as a whole. Each person has their own set of growth aspirations, skills, and projects they’re focused on, all of which feeds into the learning opportunities they need. To derive the most value for the business as a whole, companies must be able to guide people to the development opportunities that are most relevant to them.

6. Pay the market rate (or above)

Compensation, both in terms of pay and benefits, is still one of the top reasons people accept a job offer and deliver their best performance from day to day. The pursuit of better compensation is also what drives many workers to change jobs throughout their careers. Monitor what your competitors are paying their people for similar positions and offer a comparable compensation package. Regular raises and bonuses are also essential to keep top talent. Additionally, make it a priority to communicate the full investment you’re making in your employees beyond base salary and bonus, such as healthcare, memberships, learning opportunities, wellness programs, and other benefits that employees might overlook as they evaluate employers.

7. Learn from past turnover

It’s important for HR professionals to collect, analyze, and act on turnover-related data and anecdotal feedback from exit interviews. By applying analytics to the data collected in your company’s human capital management (HCM) applications, your company will be better able to interpret turnover data, identify root causes for voluntary and involuntary turnover, and identify skills gaps.