Attracting the right talent and retaining them is one of the biggest issues businesses face on a daily basis, especially with new jobs opening up all the time. A startup is nothing without its employees, so read on to find out how you can reduce employee turnover and improve your company culture as a startup.
What Is Employee Turnover?
Employee turnover refers to the number of employees who leave your company within a certain time frame, such as a month or year, including employees who have been fired and who left voluntarily.
For example, if you want to work out your employee turnover percentage for the month, divide the number of employees who left that month by the average number of employees within your startup. Times this number by 100, and you will get your employee turnover percentage. As a rule of thumb, employee turnover should be under 10% to be classed as a healthy ratio. Your employee turnover rate could be much higher when starting a business, especially if you only have a few employees.
Operational risks such as employee turnover should be managed by your startup with an effective risk management plan. Pulpstream’s guide can help your startup develop a risk management process for employee turnover and other things that could go wrong in your business, such as financial risks. Having a strategy in place will support your startup to deal with any crisis, however big or small.
The Main Causes of Employee Turnover
To be able to manage employee turnover, you should be aware of the main causes, which are:
- Extra money
- Better working hours or flexibility
- More benefits, such as health insurance
- Climbing the career ladder
- Ineffective management
Finding ways to deal with these can improve your employee turnover rate, ensure employees feel valued, are paid well, and maintain a healthy work-life relationship. Below are some tips for reducing employee turnover for your startup.
Provide Competitive Salaries And Benefits
The main reason that employees show up for work every day is for money, so this is one of the most important things to start with. As a startup, you need to keep costs down to a minimum but be careful of scrimping too much on employee wages. When you do this, employees are more likely to begin looking elsewhere for jobs, especially if they can be paid more for doing the same thing.
Check out competitor job advertisements and see where they are starting their salaries at. When hiring employees, discuss their expectations regarding pay, as this will give you a more general idea of what salary is beneficial for both your employees and your startup. Consider the benefits your employees are going to get, and how this reflects in their salary expectations.
Hire The Right Employees
An easy way to reduce employee turnover is by refining your recruitment process. By fine-tuning this, you are more likely to find the right employees who will want to grow with your business. This reduces the risk of employees leaving for other jobs or firing employees who simply aren’t the right fit.
Recruitment is difficult, especially if you have never done it before. Make sure your job description is in-depth and covers everything that may be included in the job role. Set clear salary expectations and have a robust interview process that reflects the job in question. Consider using a recruitment agency to help you get started or follow these tips for an effective recruitment strategy for your startup.
Offer Opportunities For Growth
Most businesses that have a low employee turnover stay that way because they promote and hire from within. As a startup, this is the best way to ensure that your business runs as it should and you find someone who understands the business from the ground up. Employees care about improving their job prospects, so ensure there are ways to grow within your business.
Offer training or leave days where employees can get their own training or take a course that enables them to grow professionally. Encourage employees to take on master’s degrees, if this is something they would be interested in. Internal promotion should be encouraged across teams so that employees can get a taste of every part of the business if they want to.
Look Out For Toxicity In Your Workplace
As a business leader, you should be on the lookout for any toxicity in the workplace, especially in the form of gossiping and overly critical employees. This can cause good workers to look elsewhere for jobs, as they do not want to be part of this culture. Take employee complaints seriously and investigate anything you aren’t happy with. Your gut is usually right in these situations, so nipping them in the bud quickly will ensure it isn’t a repeat occurrence.
This is especially important if the toxicity is coming from a manager, as ineffective management is a top reason for employee turnover. You do not want your business culture to be toxic, especially when starting a small business.
Your employees want to feel recognized and valued. This is how they know they are more than just a number. Additionally, this is an easy and effective way to improve employee turnover and overall happiness. All it takes is a simple thank you, either spoken or written, to acknowledge and recognize a job well done.
To take this one step further, you may want to start an employee of the month scheme and invite colleagues to vote for one another. This is a fantastic way to improve the culture in your startup and encourage employees to work as a team and look out for one another.
Reducing employee turnover is key to developing a healthy startup culture and limiting the risks associated with the loss of an employee. Make sure your startup offers competitive salaries and benefits, hire the right employees, look out for toxicity in your workplace, and recognize employees for their work. Don’t forget to provide ample opportunities for growth within your business, and you are well on the way to reducing employee turnover in your startup.