Career Development

9 tips to reduce turnover to implement as quickly as possible in 2023

Turnover is an undeniable obstacle to the growth of all companies, startups or scale-ups. Encouraged by the overall tension in the recruitment market, turnover is a challenge for all organizations.

The great resignation which hit companies, and particularly the Tech sector in France, requires us to address this subject of employee loyalty.

Definition: What is turnover?

Turnover is the workforce turnover rate from a company.

It takes into account employee departures following layoffs, end of contract, resignations or retirements, but also recruitment of new employees.

Turnover varies by industry and sector. It will be particularly high within Tech or consulting firms

Depending on the result obtained, within an established company:

  • A turnover of 0% means that the company is stagnating.
  • Turnover is considered low if it is less than 5%
  • Turnover is considered high if it is above 15%

How to calculate turnover?

There turnover formula is the following :

Turnover = [(Nombre de départs en N + Nombre d’arrivées en N)/2]/Workforce as of January 1 of year N

This formula, multiplied by 100, gives the turnover percentage.

Within startups, turnover is, by definition, very high, given that numbers can double or triple during a year. For this type of company, it will therefore be a question of focusing on the indicator of the “Number of departures in year N” initially.

The other useful indicator for startups is the retention rate. It determines the proportion of employees who remain on the job over a given period.

Key turnover statistics in France

Some statistics to start:

  • The first quarter of 2022 saw resign 469,600 active people who were permanent. This is 20% more than the figure recorded at the end of 2019 (before Covid)
  • 35% of employees have never wanted to leave so much their position in May 2022 (OpinionWay survey for the Indeed recruitment site). This figure reached 42% for those under 35 (which constitute the majority of startup employees).

Beyond these alarming figures on the state of the recruitment market and the vision of candidates, the recruitment firm Robert Walters estimated the cost of a failed hire at an amount between 100 and 150% of the employee’s remuneration.

Thus, the number of resignations has never been so high, with a strong impact on the health of companies.

Retention and reduction of turnover is therefore a key challenge for most companies, managers and Human Resources teams.

The list of tips for reducing turnover in companies and startups

We have established a list of 9 HR tips that will allow you to drastically reduce the turnover of your employees

Measure turnover to find its causes

The first thing to do when you notice an employee retention rate that is too low is to properly measure the key indicators. You should know that, very often, employees do not express the reasons that push them to leave a company.

The American company showed, in a study published in 2021, that 34% of employees prefer to change teams or resign, without reporting their problems to their management or Human Resources.

It is therefore :

  • To measure turnover
  • To evaluate its evolution over time
  • To analyze it to understand the causes of this growth

How to identify the causes of turnover. Here are some ideas:

  • Conduct exit interviews with all resigning employees. The challenge is to understand the reasons that push your employees to resign. We also talk about the offboarding process.
  • Conduct a comprehensive study on current employees to understand their state of mind. Satisfaction surveys and anonymous questionnaires are good tools

Raise salaries and align with the recruitment market

For 77% of candidates, salary is the first criterion for choosing between two employers. This study from the recruitment firm Robert Half in 2022 is supported by another Randstad study from 2021 which gives the figure of 65%.

Based on this principle, it is a safe bet that a company which loses its employees must review its remuneration policy so that it is competitive.

It is first a question of having a good vision of the salaries practiced on the market, by competitors and the actors of the eco-system.

See in particular our study on startup salaries

After establishing a precise benchmark, several levers are available to employers and HR:

  • Reassess employees’ salaries based on their fixed remuneration
  • Reassess employees’ salaries on variable remuneration

While these two solutions are the most obvious, other possibilities exist:

  • Establish systems of profit-sharing or participation bonuses allowing employees to be allocated a bonus based on the company’s results
  • Suggest benefits in kind (telephone, vehicles) or social advantages for employees.

Another interesting lever on salaries is the establishment of a transparent salary scale which clarifies everyone’s remuneration, prospects for increases and limits the risk of litigation.

Work/personal life balance

A recent study shows that the number of employees who considered work to be “very important” has drastically decreasedsince it went from 60% in the 90s to 24% today.

Work-life balance is therefore a key subject for any organization wishing to promote employee retention.

For this, several tips to put in place:

  • Monitor and ensure acceptable workload for employees
  • Promote flexible working methods (flexible hours)
  • Guarantee teleworking days

This subject is all the more important as it will even more concern employees who are starting families and are therefore more inclined to favor positions which guarantee them this balance.

Better integrate recruited employees

To retain your employees, you need to recruit well. And recruitment goes from the search for candidates suitable for a given position, to the onboarding of the employee within the company.

This is to avoid casting errors and guarantee the success of an integration.

To retain employees, it is crucial to properly manage the recruitment and integration process. The first days are decisive, because 22% of departures take place within the first 45 days. Recruitment and reception problems may be at the origin of these departures, with 53% of employees declaring that they did not have a clear definition of their missions and 78% having felt a lack of training and support.

To remedy these problems, it is essential to write a transparent announcement and set up a pre-onboarding process (before the employee’s arrival), with regular contact with the new employee. Onboarding must include the provision of a workstation and tools, a presentation of the company and integration events, as well as a training cycle and mentoring.

Involve employees in company life

Lack of consideration is one of the most common factors that push employees to leave their jobs. Employees need to feel valued and respected to be motivated and engaged in their work. Thus, to improve employee retention, it is essential to give more responsibilities and to involve more in decisions and company projects.

By empowering your teams, you create a relationship of trust and mutual respect. Employees who feel listened to and considered are more engaged, productive and loyal. A proof of trust from the employer can thus make employees want to surpass themselves and give the best of themselves.

Increased employee engagement leads to higher loyalty and therefore limited turnover. Indeed, when employees feel engaged in their work and in the company, they are less likely to look for new employment elsewhere.

Improve well-being at work

We recently heard about employees who left a company where the temperature was too cold. Although energy efficiency has environmental and financial benefits, it remains essential not to scare away your employees.

Generally speaking, here is a list of actions that can help you improve well-being at work:

  • Ensure the brightness of work spaces and the absence of noise.
  • Ensure the temperature of the premises, accessibility of offices and the presence of comfortable amenities.
  • Pay particular attention to theergonomics of work furniture.
  • Provide original equipment to fight against a sedentary lifestylesuch as sit-stand desks or bike desks.
  • Choose carefully the digital tools and software made available to employees.
  • Provide relaxation areas such as libraries, game rooms, juice or coffee bars, or gyms.
  • Implement “green” systems such as recycling, a canteen with organic food, or the fight against waste.

By implementing these actions, companies can improve the well-being of their employees, promote their loyalty and limit turnover.

Beyond the premises, equipment is also a subject for teleworking employees. It is therefore also a matter of ensuring the well-being of teleworking employees.

Be vigilant regarding managerial practices in business

Poor management practices are often the main reason employees leave their jobs. Many topics have emerged in recent years, particularly regarding practices within startups.

More than half of executives have already left their job or ended their probationary period due to management techniques that do not suit them. To resolve this problem, experts recommend a management style that is present but not authoritarian, which is based on trust and respect among teams.

This implies that managers must be good at active listening, communication and feedback. They must also define factual objectives, clear missions and good workload management to reduce employee stress.

It may be interesting to assess the skills of managers, and why not set up dedicated internal training, to improve practices within teams.

Provide clear and appropriate prospects for development

Keeping employees also means giving them career development prospects.

Please note, this does not necessarily involve management. It’s about understanding the employee’s desires to enable them to develop personally. Here are some ideas:

  • Continuing training for skills development
  • The development of specific expertise
  • Taking a position and taking on the role of expert on a given subject
  • Supervision of a team, in the role of manager or team lead
  • Retraining for another role in the company

Work positively on ecological, environmental and social issues

Not every business can be an impact or mission-driven business. However, it is undeniable that we should not neglect employees’ search for meaning. This can go through:

  • Develop partnerships with associations
  • Implement an effective CSR policy
  • Reduce the carbon footprint of the company and its activity

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