Insights / Hiring Strategy
Why Is Employee Turnover So High? How to Stop the Revolving Door of Temporary Staff
Explains why turnover happens and how stronger screening—rooted in company culture, behavioral questions, and team involvement—can help employers keep hires longer.
Turnover is costly, often one-half to two times an employee's salary once recruiting, training, and lost productivity are factored in. The article recommends improving screening by defining company culture, using behavioral interview questions, testing both technical and soft skills, checking references, involving the team in interviews, and partnering with staffing providers to better understand each role.
Table Of Contents:
Understanding the True Cost of Employee Turnover
Effective Strategies to Reduce Employee Turnover Hire the Right People From the Start
Improved Screening Processes Define Your Company Culture
Create a Company Culture of Recognition and Appreciation
Invest in Professional Development and Growth
Prioritize Work-Life Balance: Offer Flexibility
Offer Competitive Compensation and Benefits
Address Toxic Work Environments and Manager Relationships
Understanding the True Cost of Employee Turnover
Before exploring solutions, let's discuss the financial impact of employee turnover. Replacing an employee can cost one-half to two times the person's annual salary, according to Gallup. These costs include recruiting, training, lost productivity, decreased morale, and the loss of institutional knowledge.
Lose an employee earning $40,000 and you might find yourself shelling out anywhere from $20,000 to $80,000 just to find and train their replacement. Add to that the substantial financial hit: revenue erosion from the work that person does, such as lost sales, and the pressure of an overworked team trying to keep up.
High turnover also creates more work for remaining staff, which can further impact employee morale and increase employee turnover rates. This is especially relevant considering factors like compensation benefits and work-life balance, among others, influence employee experience
Improved Screening Processes
Finding the right people for the right jobs is tough. It’s a big reason why employee turnover is so high. But better screening can really help. This means looking closer at who you’re hiring. It’s not just about skills. It's about finding people who fit your company’s culture.
Define Your Company Culture
Think about what makes your company tick. What are your values? How do people work together? Look for candidates who share those same values. This can reduce employee turnover big time. Because when people feel like they belong, they stick around.
Behavioral Questions
One good way to do this is with behavioral questions. Instead of asking “What are your strengths?”, try asking questions that show you how a person thinks and acts. They give you a peek into their real personality.
Examples of Behavioral Questions
"Tell me about a project you led and the results you achieved."
"Describe a difficult situation you faced and how you overcame it."
"Can you give an example of a time when you had to work with a difficult team member?"
Skills Tests
Skills tests are also useful. But don’t just test for technical skills. Test for soft skills too. Things like communication, teamwork, and problem-solving. These skills are important for any job. And they can be hard to teach.
What to Test For
Technical skills: Can the candidate perform the tasks required for the job?
Soft skills: Can the candidate work well with others, communicate effectively, and solve problems?
Background and Reference Checks
Background checks are important, but they're just one piece of the puzzle. Reference checks are another good tool. Talk to people who have actually worked with the candidate. Ask them about the candidate’s work ethic, attitude, and how they handled challenges.
Involve the Team
Another way to improve screening is to involve the team. Have potential teammates interview candidates. This gives everyone a say in the hiring process. And it can help reduce employee turnover later on. Because the team has already bought into the new hire.
Benefits of Team Involvement
The team gets to know the candidate and can assess their fit.
The candidate gets to know the team and can assess their fit.
The team is more invested in the new hire's success.
Deepen Role Understanding
To find the perfect match, it’s essential to truly understand the role and the day-to-day demands involved. One effective way to achieve this is by forming partnerships with your staffing or employment provider. Invite them to shadow a team member in the role they're hiring for. This hands-on experience allows recruiters to grasp the role's nuances, understand the team dynamics, and identify what makes an ideal candidate beyond the job description. It also helps paint a realistic picture for potential hires, ensuring candidates know what to expect and can gauge if it’s the right fit.
The Payoff
Improving your screening process takes time and effort. But it’s worth it. The right people are the backbone of any successful company. By taking the time to find those people, you’ll build a stronger, more stable team. And that means less employee turnover in the long run.
Conclusion
It is a continuous process to reduce employee turnover, one that demands sustained effort and multifaceted improvements. It's not a one-time task, but rather an ongoing commitment to creating a workplace where employees don't want to leave. There's no single formula for reducing turnover, as every organization is unique.
What works for one company may not work for another. Instead, fine-tune your strategies regularly to ensure they remain effective and relevant. Keep what works and modify as needed. Be willing to adjust your approach as your organization evolves and changes. This adaptive mindset will help you stay ahead of the curve and effectively reduce turnover. By reducing turnover, you can increase retention, boost employee engagement, and improve overall performance.
Frequently asked
How much does employee turnover really cost a company?
According to Gallup, cited in the article, replacing an employee can cost one-half to two times their annual salary, covering recruiting, training, lost productivity, decreased morale, and lost institutional knowledge.
What are behavioral interview questions and why use them?
Behavioral questions ask candidates to describe past actions and situations, such as leading a project or handling a difficult teammate, rather than generic strengths questions, giving employers real insight into how a person thinks and acts.
How can involving the team in hiring reduce turnover?
Having potential teammates interview candidates lets the team assess fit, helps candidates gauge the team too, and increases investment in the new hire's success, which the article says can reduce turnover later on.
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