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Employee Turnover: It’s Time to Focus on Retention

Employee turnover is one of the most difficult challenges businesses face when running a people services operation.  Turnover causes major disruptions to normal business operations for businesses and clients alike, and if it is not managed properly, can be detrimental to a business’s revenue stream and reputation. 

Imagine having to turn new clients away due to employee turnover and staffing shortages.  How could you possibly expect your business to grow? Work Institute conducted a study in 2017 and reported that the average cost of turnover per employee is approximately 33% of that employee’s annual salary.  To provide some more context, if an employee makes $25,000 per year (roughly $12/hr), the cost of turning over that employee would be $8,250.  What could you do with an extra $8,250 by reducing employee turnover by one single employee?

In a follow up report published this year by Work Institute, they found the following top reasons for employee turnover as stated by surveyed employees that had recently left their employers.  These are listed by what contributed the most to an employee leaving an employer in ranked order.  

  1. Career Development
  2. Work-Life Balance
  3. Manager Behavior
  4. Job Characteristics
  5. Well-Being
  6. Compensation and Benefits

There are certainly circumstances that are out of your control as a business owner and this article is not about combating those turnover issues.  Rather, we will focus on addressing what you can control and encourage you to take an active role in reversing this negative trend.  Make no mistake, the top 6 reasons stated above are all addressable and preventable.  A time investment upfront will not only save you time and money, but also contribute positively to your employment brand and give employees a reason to stay with your organization.  

Retention, what’s the big deal?

Employee turnover is a normal part of a business’s operations and should not be viewed as a purely negative outcome.  Turnover is an opportunity for a business owner to make sure that they have the right employees in the right seats.  As the healthcare market continues to expand, the demand for healthcare-related workers continues to outpace supply in the acute and post-acute settings.  Employee retention will continue to be a top priority for business owners as they compete to gain and retain top talent.  As a service organization, your employees represent you to your clients and their families so you want to make sure that they make a positive impact and a lasting impression that leaves families knowing that their loved ones are in good hands.  Once you have the right people in the right seats, the focus should shift from employee turnover to employee retention.  Now the question becomes, how do we keep who we have? 

This all makes sense, but how am I supposed to do any of that?  

Well, you can start with a few key areas:

Devote time to create better hiring, recruitment, and onboarding practices

Establishing a well-thought-out program for recruitment and hiring is the first step in ensuring that you attract the right people to your organization.  Do not fall into the trap of hiring a person just to fill a vacancy.  Take ownership of this process and get involved with your hiring team to start to identify specific qualities, competencies, and traits that you want your whole team to possess.  An excerpt from our co-founder, Adam Robinson’s, book “The Best Team Wins” articulates well the idea that making a poor hire doesn’t just affect your retention rates – it also leads to the following:

  • Disruption to your company culture that negatively influences your other employees
  • Loss of essential management time and focus because of turnover and recruiting
  • Damage to your company’s reputation, which affects your customers and future potential employees
  • Wasted wages and training costs

So doesn’t it make sense to devote your time to get this right the first time?
Once you have gone through the rigorous process of making a new hire, providing them with an engaging and positive onboarding experience ensures that they will remain with your organization much longer. 

Research conducted by Urbanbound has shown that up to 20% of turnover happens within the first 45 days of employment, but 69% of employees are more likely to stay with a company for at least 3 years after a great onboarding experience.  So it is in your best interest to take action so that this figure does not exceed that initial 20% by providing a great onboarding experience.  With this information in mind, do you have an onboarding program in place or is this an area where you could use some help?

Provide employees with better and more widely available training

Furnishing employees with the tools that they need to perform their job efficiently and effectively goes well beyond simple introductory videos about your organization given during orientation. Stay current with your training materials.  Nothing makes people disengage quite like seeing tone deaf VHS tapes where all the actors are using lingo from a bygone era. 

If this pandemic has taught us anything about operating a business, it’s that the unexpected does happen from time to time.  So being prepared for different and “out of the ordinary” outcomes as part of the job has taken center stage.  For instance, a new focus on keeping employees and clients safe through the use of proper PPE and personal hygiene/sanitation techniques.  Things like this should be communicated to all stakeholders in your organization.  Clients should know what to expect from you and your staff, and your employees need to feel safe going to work every day.  In this case, ongoing training would be about how to prepare your employees for field work and providing updated information as you get it from sources like the WHO or the CDC.  

If you are looking to improve your retention numbers, offering opportunities for advancement through training programs is a surefire way to prove to your employees that you are taking an interest in their professional development.  Even if you do not have a set training program in place, offer to enroll interested employees into programs of their choice.  Specialized training programs offer employees career pathing options with the potential to make more money in the long run.  Give your employees a reason to stay that doesn’t primarily focus on pay.  As stated by the Work Institute at the beginning of the article, compensation and benefits were listed at #6 whereas career development was squarely situated at #1.   

Get current employee feedback

Your current employees are a wealth of knowledge and information – seek them out and understand what they love about working for you.  Your longest tenured employees are with you for a reason, so see why that is.  In your discussions you may discover important incentives or benefits that really resonate with your employees and you can really highlight those offerings to potential applicants.  What drives loyalty with your tenured employees and how can you replicate that for your other star employees to improve your retention rates?  

Think about your own preferences and loyalties to specific brands for a moment.  Why did you choose the brand in the first place?  Have you ever received a recommendation from someone else for a product or service that you loved?  Now what is the likelihood that you would recommend that product or service to someone else?  The exact same concept works for your business too.  Your employees are your brand ambassadors and they will embody your culture better than anyone else.  So use that to your advantage.  Good people want to work for good companies and they will attract other good people to your company.  

Now let’s take a step back and look at the opposite statement from above, why did you switch away from a certain brand or company that you previously used?  Were the reasons related to what you thought about from the previous questions?  Once again, you can take this opportunity to get feedback from your current employees regarding areas of improvement.  Don’t miss an opportunity to engage with your staff and eliminate any reasons for good employees to leave.    

Time to think outside the box

Be flexible with your current employees and with employees that are new to your organization.  Offer options to work modified schedules to better suit their needs (as well as yours).  Part-time employee work can attract an otherwise neglected pool of talent such as parents, college students, or other part-time employees to your company and keep your costs down for you and your clients.  Companies like Uber and Lyft capitalize on the gig economy that allows workers to come and go when their schedules allow so maybe you can offer something to that degree,  albeit with certain expectations – you still do have to run a business, you know?

Now, I know this might sound crazy and it certainly wouldn’t be appropriate for all positions, but have you ever considered hiring an employee with no experience for the position that they are applying for?  Please hear me out.  There are people out there that might have comparable skills and abilities to perform well at the position that you are hiring for, but they do not have direct experience with your open position.  Instead look for certain qualities, aptitudes, and attributes that would be ideal in an employee for your organization.  Review resumes for previous successes in other roles as indicators for these traits and aptitudes.  For certain positions such as caregivers or home health aides you can always provide appropriate training to perform that position. Don’t turn away a potential rockstar employee because their experience isn’t word for word what you are looking for.  

Keep an open mind for individuals such as veterans transitioning from military to civilian life or other applicable care experience workers that may have been laid off or furloughed – think hospitality, child care, or education.  If you keep competing for the same limited pool of talent you run the risk of hiring another company’s poor quality employees which likely won’t work out for you for the same reasons that they didn’t work out for them.  Give yourself the best chance for discovering good quality people that just need an employer that will give them a chance.   

Another suggestion is to tie in the idea of having fun at work.  You might be saying, “work isn’t supposed to be fun, that’s why it’s called work.”  However, we would like to challenge that notion because happier employees find ways to overcome their challenges at work and in turn won’t look for reasons to leave you for other opportunities. The healthcare industry is a very challenging place to work in and the work environment can be physically, mentally, and emotionally exhausting.  Instituting programs that encourage team bonding such as fun outdoor activities or even virtual Zoom meetups is a great way to keep employees engaged and reduce incidence of burnout.  It’s important to have appropriate ways to keep people energized and motivated because they represent you and your organization.  

Over promise, then deliver

Lastly and most importantly, follow through on your promises to your staff!  Don’t commit to something like providing additional training, opportunities for advancement, or extra pay if you don’t intend to honor that commitment.  Times are tough all around, but reneging on a promise is a guaranteed way to lose employees.  

There’s an old adage in the world of sales that says “under promise and over deliver,” but this couldn’t be further from the point.  You expect a lot out of your employees just like your clients expect a lot out of you.  So while your employees are out on the frontlines, putting their well-being on the line for you and your business, remember that following through on your promises goes a long way and speaks volumes about you and your organization.  Don’t give employees a reason to leave you, give them a reason to stay with you.  Good people leave when they deliver on what they promised to do but the company fails to do the same.  

If all else fails, and they still choose to leave…

Inevitably, you will have employees leave your organization, for better or worse, so take that opportunity to make the best of that situation.  Conduct exit interviews to get feedback on how to improve your people operations and keep an open mind to what you learn.  No one likes to hear their baby is ugly so don’t get defensive and try to justify your stance on why they are leaving.  You might be surprised by what you learn when you actually listen to exiting employees rather than trying to change their mind. 

This will help you to identify your blind spots and also show that you are committed to making any necessary changes for the rest of your employees still with your organization.  You also reduce the risk of getting negative reviews from employees when you give them a chance to air their grievances to you face-to-face.  There IS such a thing as bad PR and negative reviews can hurt your business by pushing new clients and potential applicants away from your business to your competition. 

According to Glassdoor, 69% of job seekers would turn down a job offer from a company with a bad reputation, even if they were unemployed, and 84% would consider leaving their current job if offered a job by a company with an excellent reputation.  When you provide nearly identical services as your competitors the only way you are going to differentiate yourself from them is with your people.  So do your best to hold onto them by controlling what you can and disregarding what you can’t.   

Final thoughts

You need to determine how much turnover is acceptable and manage your business to that performance metric.  It’s important to understand that you can’t manage (or improve) what you don’t measure because you have no baseline to start from.  Determine if employee turnover is intentional or unintentional and whether the employee left on good terms or bad terms then develop metrics according to those indicators to provide you with clarity on how well you are retaining your employees.  We live in a data driven society and the ability to make sound business decisions depends on the quality and availability of that data.  So do yourself a favor and start to track these metrics if you don’t already.    

Turnover shouldn’t be viewed as a zero-sum game where you, as the business owner or hiring manager, lose every time an employee leaves the organization.  However, by determining an acceptable level of turnover, you are empowering your team to work toward a goal and providing a strategy for how to staff.  Understanding this information can educate you and your team on a deeper level to provide indications on when you should be actively hiring versus passively recruiting and building up a pool of quality candidates to draw from during a time of need.  Not to belabor the point, but employees will leave for one reason or another so make sure you have a plan in place to backfill those employees and build up a pipeline of quality candidates that can call on at a moment’s notice.  

Hireology can help you better manage your people processes so you can concentrate on building your best team and maintaining your company culture. To find out how we’ve helped businesses like yours, connect with us to get a demo.

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