Updated: Jun 28, 2021
U.S businesses lose over $1,000,000,000,000 USD annually due to voluntary turnover, but many HR leaders consider turnover a normal and required cost of doing business. While every company will have some turnover, a national average of 70% turnover for new hires over a two year period, is alarming. If your company is in this camp or has an average turnover rate of above 50% for early career professionals, this article is meant for you.
Unfortunately, the news for 2021 is not good for turnover. The last year of relatively low turnover rates is about to create a “Turnover Tsunami” due to the pandemic economy recovering and an influx of new job postings. So, what can you do as a manager to keep your high performing employees?
Counteract Disengagement: Social Interaction
Social interaction is often dismissed as being unproductive if not counterproductive. This thinking is fundamentally wrong. What you may consider “water cooler talk” is not just office gossip, it is also the formation of a workplace community. People with “work friends” are 36% more likely to be engaged employees, meaning that they actively try to innovate and propel their company forward. They have also formed affective commitment to the organization, which makes them more likely to work overtime without forming resentment, and less likely to leave for another organization. To read more about how social interaction plays a key role in turnover, read our article discussing three ways to improve attrition and engagement through social interaction.
Combat Burnout: Forced Paid Time Off
After the chaotic year of 2020 where many of us were transitioning into remote work, the number one reason for turnover became burnout. As your employees work increasingly long hours to “prove” to their managers that they are still productive at home, burnout is becoming a serious detriment to your company’s productivity and turnover rates.
Time off should not be considered a luxury and vacations do not need to mean expensive trips to the Turks and Caicos, vacation time can be spent at home taking care of laundry that has sat in a hamper for two weeks because you have not had the mental bandwidth to think about anything other than your string of next deliverables. Vacation time is even considered the #2 benefit, directly behind healthcare coverage, which is not a coincidence.
Employees who take vacation have lower mortality rates, depression rates and anxiety rates, coupled with higher productivity and job satisfaction. To put it bluntly, you’re depressing and killing your workforce, losing money, and resenting the mistakes your employees make, all because you are not forcing them to take paid time off. Take a vacation and make your assistant take a vacation too -- Right now.
End Resentment: Opportunities for Advancement
When employees feel stuck and unable to advance their careers, they grow resentful and leave. This can be due to a poor management style that overlooks top performers, or it can be because there are rarely high level positions open in a company. If an employee stays in a company where they feel stifled, they are also likely to become disengaged, which is bad for company culture and revenue, not to mention turnover.
Luckily, advancement is not strictly upward mobility, it is also the ability to learn and grow as a professional. This does not mean that you have to organize a workplace development training retreat, but it does mean that you could pay for your top employees to go back to school to acquire advanced degrees that would benefit both them and the organization. Education enriches our lives and makes us feel like we are accomplishing life goals/milestones. Sometimes an employee will want to take a class or certification program, sometimes they will want to receive an executive MBA, either way you can ask them to sign a contract that states they will stay with the company x years after completing the program and that they will receive some kind of reward for completion.
As employees we spend more time working than we do with our families or friends. We dedicate the vast majority of our lives to our companies and we each deserve to have a fulfilling work life that doesn’t make us feel burnt out and resentful. Our company also deserves to have engaged employees who will work with the best interest of the group in mind; but to do that effectively, we each need to reevaluate how we treat social interactions, vacation time, and advancement. Your key takeaway from this article should be that life enrichment and fulfillment is the true cause of turnover and the one way to fix it.