How to Reduce Employee Turnover

Some turnover is necessary to help an organization move forward; however, excessive employee turnover can hurt a company’s bottom line, and in many different ways. First, it decreases the overall performance and efficiency of a company in such a way that when and experienced employee left, the workforce is reduced and less experienced worker is hired to fill his placed. Second, it creates an expense. There are costs associated with the process of losing an experienced employee as well as in hiring and training an unskilled worker. Third, it can negatively affect employee morale. Involuntary terminations, for instance, can send mixed messages to your workforce. In most cases, it can foster a sense of job insecurity among your employees, causing employee morale to suffer.

Employee turnover is the last thing every organization would want to deal with but, unfortunately, it cannot be avoided. The challenge now is preventing frequent employee resignation and termination. How do you exactly do that? How do you keep your good employees happy? Here are six ways to keep a positive culture in your organization, create a sense of job security, and turn your workplace into something people would want to work in.

1. Be Selective In Hiring Employees.

The last thing you want is waste money on employees who will never stick it out until the end. This is why before you even think of strategies on how to retain employees, make sure that you have the right employees to begin with. This means choosing candidates who not only possess the right qualifications and skills but also fit well with your company’s managers, co-workers and culture. If for instance your company has a flat organizational structure with very few or none managerial level, hiring competitive employees who have “promotion” as one of their work motivation might not work out well in the long run. These employees might not find job satisfaction in their job and choose to leave the company right away when offered better opportunities elsewhere.

2. Set The Right Compensation And Benefits.

Top-notch employees who are aware of their own value are going to demand or want better pay. Although they may be happy with whatever rate of compensation you gave them at the start, they will eventually feel that it is not enough as they gain more experience and expertise in their job. So, if you want to keep them, you have to pay them well. Salaries are usually based on the following according to the Entrepreneur: skill and experience, supply and demand, geographical location, and seniority.

Of course, providing high salary is not enough to retain employees and, even with a better paying job, they will seek employment elsewhere. Most often, they are looking for competitive benefits and perks, such as medical insurance, retirement plan, and transportation allowance.

3. Offer Opportunities For Training And Personal Development.

Imagine yourself doing the same thing for a year or more without adding something new to what you already knew. Surveys show that investing in training and personal development can promote greater job satisfaction among employees, helping you attract and retain the good ones. In addition, it can benefit your company in many ways. Training equips your employees to handle customer inquiries, make a sale, and so on. It also helps them become flexible and efficient, enabling them to handle more than one aspect of the business. The personal development they experience through the trainings you provide will boost their morale and job satisfaction.

4. Create a Positive Work Environment And Culture.

Imagine yourself walking into a room that makes you feel unsafe or uncomfortable. Now, imagine having to go through with that every workday for eight or more hours in a day. Everyone wants to feel safe and comfortable in the workplace. So, from the moment your employees walked into your door to the time the logged out of work, they must feel secure. This entails designing a workplace with more focus on comfort rather aesthetics. This also means building a working environment where there is less gossip, negative competition among employees, and the like. This also suggests finding a way to clearly communicate your company’s vision to employees and putting people first.

5. Open Your Ears To Them.

The tendency for some bosses is that they monopolize the conversations; they believe that everything is either their way or the highway. What they failed to realize is that there are so many things to gain by listening to their employees. When you listen to your employees, you are making them feel like they are a part of the whole business process, that their opinions and ideas are important. In addition, you can learn a lot about your employees too. For instance, listening will enable you to know that the reason why your sales staff didn’t reach his quota was because he’s mourning the loss of a loved one. Listening will also make you aware of any personal issues between your staff, enabling you to find a way to reconcile them. So, make it a habit to ask and listen to what’s going on in your employees’ life – both personal and professional.

Doing so will not only make you aware of everything that is going on inside your business but also allow you to take appropriate actions when there is a need to do so. Forbes advised to conduct stay interviews so that you can find out exactly the reason why your employees stayed in your company and what it would take for them to leave.

6. Conduct Quarterly Reviews.

To retain employees, you must let them know and feel that they and their performance are important to you. You can achieve this by conducting quarterly reviews or assessment. This one-on-one meeting should enable you to set goals, define how you want your employees to meet them, and give employees an idea on how they are performing with regard to these goals. Of course, during discussion, you should make it a point to ask employees about what they need in order to accomplish those goals.


Employee turnover is inevitable; however, they are many things business owners, managers, and CEOs can do to prevent excessive turnover and keep top-notch employees.