5 Things You Do That Cause Employee Turnover

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Republished with permission from ColonialLife.

For me and, after talking to other small businesses, for others too, employee turnover is a huge issue. When you only employ a handful of people, if one of them leaves it creates a real hole. And that's before you even get started on the cost of replacing them and the productivity issues and lower morale caused by others having to cover their work. So the more we, as businesses, can do to keep our top talent, the better, right? But how?

While it will probably come as no surprise to hear that base pay is still top of the list of drivers for both employee attraction and retention(1), the good news is that many of the things we can do to reduce turnover are relatively simple to implement. The even better news (especially for smaller businesses like me) is that most of them needn't cost a fortune.

Obviously, you can't retain 100% of your staff (although it would be nice if we could). But you can start to think about trying to change some of the things that may be causing high employee turnover. Here are five things that employees cite as things their employers do that cause them to quit and some thoughts and ideas on how to avoid them.

Being a horrible boss

With 28% of employees saying they would rather have a better boss than a $5,000 raise(2), it's clear that a good boss is something employees rate highly. But what is being a good boss all about?

While different people are likely to have differing opinions on what makes a good boss - for some the human element is most important, whereas for others it could be their boss's ability to push them to achieve new things - I think there are several characteristics that are universal in good bosses.

When I think back to my first few jobs, how much I liked and respected my boss played a huge role in how high my morale was and, ultimately, how long I stuck with the company. Looking back, for me, "liking" my boss was about me trusting him or her and all the things that go with that: being treated with respect, knowing my manager had my back, being listened to and encouraged, being treated as an adult (I'd had a couple of positions where my manager thought I was their child!) and not being micro-managed.

Interestingly, according to a 2015 Society for Human Resource (SHRM) survey(3), being a good boss may not be as complicated as we may think.

  • Respectful treatment of all employees at all level stopped the chart as the leading contributor to job satisfaction. Nearly three-fourths (72%) of employees deemed this aspect to be "very important" to their job satisfaction.
  • 64% of employees reported that trust between employees and senior management was "very important" to their job satisfaction, making it the second highest contributor to job satisfaction.

In my experience, strong leaders inspire hard work, and good managers who are open and honest and listen to thoughts and opinions tend to run effective teams.

Oh, and don't underestimate how far a bit of recognition goes - everyone likes a shout-out for a job well done. Some people may like a public shout-out, while others may prefer a quiet "thank you". Knowing your team is what it's all about.

Not providing clear development opportunities

When I've moved companies it's often because I've been offered a new opportunity that I just didn't think was available at my current employer.
Research shows that millennials in particular value career development opportunities. According to Deloitte(4), the least loyal millennial employees are significantly more likely to say:

  • I'm being overlooked for potential leadership positions; and
  • My leadership skills are not being fully developed.

This insight is increasingly relevant given that millennials have recently inched past the other generations to corner the largest share of the US labor market according to Deloitte University Press(5).

While this can be tough for smaller businesses where the ability to move up the ladder may be slower and via a less defined path - you can't just create new roles out of nowhere to keep staff happy! There are still things we can do to help make sure we keep our millennials (and others) engaged with our business.

In my experience, employees appreciate it if you make it clear that you can see them moving up when the opportunity arises.

There are also things you can do to develop your staff and satisfy their ambitions and show that you recognize their potential even if a promotion isn't on the horizon:

  • offering training
  • hand people a bit of extra responsibility(but don't forget the recognition)
  • have them shadow senior staff for a few days
  • give them an allocated amount of free time each month to come up with business ideas - this won't be for everyone, but allowing your employees to be creative with their skill and experience can result in some excellent business ideas and more engaged employees

Allowing a toxic work environment

For a lot of people, the office is where we spend most of our time and if it's a pleasant place to be the chances are people will be happy to stay rather than heading off to other, unknown workplaces.

According to a 2015 SHRM report(6), "An ideal work setting involves components such as stimulating work projects, assurance of personal and organizational well-being, and dedicated teammates."

Almost one-half (48%) of employees say that corporate culture is a "very important" job satisfaction contributor(7), so it's an important thing to try to get right.

Small business owners and senior managers play a vital role in establishing and fostering a good workplace culture. Although not always easy, leading by example is a must - how can you expect your employees to act in a certain way if you don't. Whether that's finishing on time a few days a week, or being open and honest when you make a mistake. Sure, it's important your employees respect you, but remember that respect is earned…and easily lost.

As a "leader", I also make sure that I'm not afraid to get my hands dirty and help other team members out when needed. I also try to make sure I acknowledge people's birthdays, either by buying a cake (always popular!) or letting that person finish a couple of hours early. They are only small things but they seem to go down well.

Not thinking outside of the box when it comes to employee perks

Most bosses would love to have Facebook or Google-size budget to spend on employee perks. Who wouldn't want to work somewhere that offered three free meals a day and an in-house gym?

Sadly, I don't have the cash to offer my staff such luxuries, but there are a lot of quirky perks that don't cost a lot if you think outside the box.

A second-hand games console for people to relax with at lunch, annual bring your pet to work day, or even just taking the team out after a particularly big win, can help boost your workers' productivity and happiness levels.

Ignoring employee benefits

Along with base pay, employee benefits are the most important factor in staff retention according to both Towers Watson(8) and SHRM(9). According to the latter, 63% of employees rated benefits as a "very important" contributor to job satisfaction, putting them ahead of compensation/pay (61%) and job security (59%).

In the same study, paid time off and health care/medical benefits tied for top spot, with flexible work arrangements (FWA) coming in third.

As a business owner myself, I know first-hand that a competitive benefits package goes a long way when it comes to attracting and retaining the best talent, but it's important that you tailor the benefits to your workers. A younger worker may prefer FWA compared to older workers who may prefer supplementary benefits that take care of some of the out-of-pocket costs that major medical plans typically don't cover. One of the best ways of finding out what your staff will value is simply to ask!

And if you're thinking that, as a small business, you simply can't afford to compete with bigger companies when it comes to company benefits, you're wrong. Voluntary Benefits or Supplemental Benefits - which are offered by the employer through the workplace - are a way of offering the things that your employees want at no or low cost to yourself.

Our FREE eBook, 10 Ways to Attract & Retain Good Employees, offers more creative ideas on how you can reduce employee turnover and attract top talent. Fill out the form on the right to download your free book. 

1Towers Watson, "2014 Global Workforce Study". 2014
2Randstad, "Employee engagement study". 2015
3SHRM, "Employee Job Satisfaction and Engagement Report".2015
4Deloitte, "The Deloitte Millennial Survey". 2016
5Dr. Patricia Buckley, Dr. Peter Viechnicki& Akrur Barua, "A New Understanding of Millennials: Generation Differences Re-examined". 2015
6, 7, 9SHRM, "Employee Job Satisfaction and Engagement Report".2015
8Towers Watson, "2014 Global Workforce Study". 2014