By Jim Giammarinaro
President & CEO of the MetroWest Chamber of Commerce
FRAMINGHAM – The trend in annual employee turnover rates has been increasing, most recently from 42% in 2016 to 57% in 2021.
The definition of employee turnover is the percentage of people who leave a job and are replaced. In general, I think we can assume that if we have a valuable employee, we would like that person to stay in our organization for a long time. If an organization makes wise decisions in their hiring practices, they will have mostly valuable employees.
Losing and replacing employees can be expensive. It costs an employer an average of 33% of an employee’s yearly salary for their exit.
Why are people leaving their jobs at alarming rates?
It will be important to determine those answers to put as many practices as possible in place to retain employees. Most recently COVID has had a large impact in causing individuals to leave work. There are many issues here such as childcare, eldercare and fear of catching the virus. There are no immediate solutions for these issues. Let’s focus on other issues for people leaving their jobs and possible solutions.
The most common reason employees leave their jobs is because they are not being challenged at work. Larger organizations can put programs in place where individuals can move into different jobs once skills are mastered. Creating a well laid out career path is critical for employee retention in larger organizations. Smaller organizations may not have the luxury of a career path structure. They will need to be more creative and find new or revolving roles to keep their employees challenged. It is critical that any organization, larger or small, find ways to keep
their employees engaged and interested in their work.
The ability to provide feedback is another important factor in employee retention. In our non-work lives, many of us thrive on having the ability to express ourselves regularly. We do not want this basic human desire to be shut off when working. More than ever, we need the ability to share ideas within our workplace. Many organizations are running short-staffed and need the full participation and engagement of their entire team. The openness of a work environment is a key factor in having people feel connected and part of their organizations. Many leaders fear a loss of this connection through remote work situations. This is one reason why organizations are preferring to return to a hybrid situation at a minimum. If an individual performs their work remotely with minimum collaboration with their leaders and co-workers, they are less likely to feel connected to their organization. They can become like mercenaries, only connected to their craft with the ability to move from organization to organization without any bonds that tie.
A good onboarding program can lead to higher employee retention rates. Studies show that 1/3 of all people who leave their jobs do so in the first month of employment.
Since it is so difficult to find employees, you will want to make sure the onboarding experience is optimized. During onboarding you will want new employees to believe you have good management practices, either a path for career development or practices in place to keep your job interesting and a good work culture. The initial impression a new employee has of their work environment is critical for successful onboarding.
There are a few other factors you will want to have in place to increase your job retention rates such as clear job descriptions, adequate staffing to meet the goals of your organization, proper recognition, and flexible working hours.
It is important for any organization to recognize the changing dynamic in employer/employee work relationships. We currently have over 11 million open jobs in in our country with an inadequate and willing workforce available to fill these open positions. This is a major factor behind the supply chain crisis and inflation. It also is the reason it is more important than ever to retain the employees you have.
If you are not a leader who recognizes the supply and demand for employees and have the skills necessary to implement programs to attract and retain employees, your organization will find it difficult to satisfy your existing customers/clients and almost impossible to grow.
Editor’s Note: SOURCE and the MetroWest Chamber have formed a partnership. The Chamber’s column will run on Tuesdays on the digital news media outlet.