I’ve been an entrepreneur for many years. And, although managers and workers now speak about the transition of work to artificial intelligence, I think it’s going to be a partnership. In other words, I don’t believe that AI is coming to take “all of the jobs.” Sure, artificial intelligence will take jobs, but others will be created. What means is that business owners will continue to need human beings. And, managers still have to understand how to address the causes of employee turnover.
In my years of experience, I have come to conclude that there are three consistent reasons are the causes of employee turnover. I will speak to each of them below, and then I will offer a solution for how you can fix it. The reality is that employee turnover is a problem, and it could be a costly one. The following are some quick facts you should know about how a revolving door of employees can affect your business.
- The average cost of employee turnover is 33% of the annual salary per job.
- When people have a terrible boss, they are four times more likely to quit their job.
- When team members don’t feel recognized, they are twice as likely to be looking for another job.
- 23% of employees will remain at their jobs if they have a manager who explains their duties and responsibilities. In other words, onboarding and training go a long way toward alleviating employee turnover.
Top 3 Causes for Employee Turnover and A Solution for Each
1) Money is a primary cause of employee turnover.
Let’s face it; people have to pay their bills. Sure, you hope that your employees are working for you because they care about the work you do—if not, they should go elsewhere. But, at the end of the day, there’s a transaction happening between employees and business owners. And, that transaction is that workers give you their time to do an exceptional job (mediocrity does not count and shouldn’t be rewarded). For that time, they get a salary or check, so they can take care of whatever needs they have in their personal lives. We can sugar coat it any way we want, but that’s the deal. So, one of the primary causes of employee turnover is pay.
Therefore, one of the smartest things you can do to stem any employee turnover issues is to be adaptable. Begin first in the most obvious place—money. Fortunately, when you’re in the process of recruiting, artificial intelligence is consolidating data. As a result, there are many excellent tools for both workers and business owners to learn about competitive salaries. Make it a point once or twice a year to check into every role in your company and make sure pay is competitive to other similar roles in the industry.
2) Leadership is a quality that doesn’t go away
Workers are followers. But, they too can be leaders. And, just because you have someone who rose into the position of manager, it doesn’t mean that they’re a good leader. That said, to reduce employee turnover, you absolutely must have leadership. It doesn’t matter if there are five people on your team, or fifty. You need someone who is strong and sets the vision for the journey ahead. And, as your company grows and develops, you will undoubtedly tap into people on your team who will take up leadership roles and help you expand the cohesion of your group.
So, if you believe as I do that you have to have leaders within your team, then you have to nurture and help them grow. And, one of the simplest and least expensive ways for you to accomplish this is by training them. While leadership training is fantastic, if you have the funds, you can also nudge them along by encouraging them to read the best leadership books. Take the time to speak to young leaders about what they’ve read and help them to assume leadership roles whenever possible in your company.
3)Lack of communication between management and workers
For those of you who are older managers who are stuck in the past, you have to change. You have to evolve. Managing Millennials and Generation Z workers is very different than managing older workers. And, if you don’t know how to do it well, you can have a severe case of employee turnover. Therefore, communication is vital for success in managing workers. So, one of the best things you can do as a business leader is to educate and inform yourself of how different generations communicate.
For instance, while Generation X workers are known for putting their heads down and doing what they’re told, this is not how younger groups of workers communicate with management. In fact, younger groups want to not only hear feedback and input about their work, but they want to have input into the ideas and thinking of their leaders. Understanding this helps you to minimize employee turnover. Educate yourself and read up on what different generations require, and then ensure that your communications efforts and pipelines rise to meet the needs of your workers.
In sum, employee turnover does not have to be a fact of life for your business. If you’re dealing with this kind of problem, think about these three core causes of employee turnover and consistently work to remedy the situation. There are other reasons that you may have a retention problem, including lack of mentorship, advancement opportunities, and recognition. However, money, leadership, and communication are the essential basics that you must make sure you have resolved before considering anything else.
© 2020 Wayne Elsey. All Rights Reserved.