In any business – whether you have an in-house team or a full team of freelancers – employee retention is one of the most important goals. A high rate of employee turnover can be extremely costly, and it can have a negative impact on your team’s morale and your brand reputation. It makes sense to look after your employees and make the necessary changes to improve working conditions should you need to. We’re going to dive into this topic a little further as we explore the high cost of staff turnover and the reasons why every business owner needs to stand up and look after their team members.
The Cost of Turnover
The cost of staff turnover is often underestimated and the reason for this is the direct monetary costs are easy to tally, but the indirect costs can be more difficult to quantify. There is a niche group of people out there creating careers through job hopping to be aware of. The most obvious cost of turnover is the direct replacement cost. This includes the price of advertising, recruiting, and training new employees.
These overheads can be significant, especially in industries that generally experience high turnover rates. There are also indirect costs that most people don’t think of. These can include decreased productivity, morale problems, and a loss of institutional knowledge. Turnover can also lead to increased stress levels for remaining employees, which can lead to a drop in their performance. All of these factors can have a negative impact on your company’s bottom line and take-home profit.
The Benefits of a Happy Workforce
A happy workforce is a productive workforce. When employees are content at work, they are less stressed, more engaged, and more productive. Lower stress levels, in turn, leads to improved focus and concentration, which translates to better work quality.
How to Keep Your Employees Happy
Communication is key when it comes to keeping your team happy. Let each person know what’s going on in the company, and give them a chance to voice their opinion and be heard. Do what it takes to create better and safer work conditions. This can include outsourcing tasks that can be automated or hiring a third party to handle specific operations. A good example of this would be a company in the logistics industry using fleet management software and installing dash cams in each of their vehicles. Not only will installing dash cams and using the software for tracking and reporting improve driver safety, but it will also help to reduce costs and increase productivity levels going forward.
Appreciation also goes a long way to creating a team that’s content with how the business is run. Show your employees that you value their hard work with regular acknowledgement and reinforcement. Finally, development opportunities show that you care about your employees’ growth and development. Offer training and development opportunities regularly to help each person reach their full potential. Allowing employees time off to continue further education (as long as it doesn’t interfere with your operations and goals) is also a great way to show them that you’re invested in their futures as well as the future of your business.