Reduce Employee Turnover Costs

There are many statistics and complex methodologies to support the notion that employee turnover costs are seriously affecting mid-sized enterprises. On the low end, the Hay Group reports that the cost to replace an employee is 50% of their total compensation, including benefits. On the high-end, Hewitt & Associates puts the cost between 100-150% of annual compensation. While executive management and sales staff are more costly to replace, churn in any function affects the bottom-line.

How Can You Retain Top Talent?

• Share Long-Term Vision - it is critical that all employees understand the long-term vision for the organization to find real meaning in their work. In particular, star performers who are shut out of the high-level strategy and direction of the company will be the first to defect, while costing the most.
• Conduct Employee Surveys - establish an annual Employee Satisfaction Survey to gather information and determine some of the reasons why people may be looking for greener pastures. Be sure to keep this anonymous.
• Consider Flextime - for employees who are managed based on deliverables, consider implementing a flextime policy, which allows for telecommuting. Best Buy recently instilled a Results-Only Work Environment and boosted productivity in their corporate office by over 35%.
• Offer 'Personal' Days - consider offering 1 day per month/quarter for a personal day. This will allow your employees to take care of business in their personal life without having to call in sick to work for fear of persecution.
• Create Focus Groups - bring leaders from each level in the organization together for informal employee focus group sessions. Discuss corporate culture, social activities, and the work/life balance at your company. Use our Facilitating Insightful Focus Groups report for advice.
• Do Exit Interviews - last but not least, be sure to conduct an exit interview. Use Demand Metric's downloadable Exit Interview Questions Tool for help in this area.

Action Plan:

1. Discuss with HR - schedule a meeting with your HR Director to discuss strategies that will reduce churn. If necessary, get employee churn on the agenda for a senior management meeting to get top-level support and buy-in.