Over the past few years, the American job market has been facing a huge struggle as far as retaining talented and skilled employees. Increased employment turnover is partly due to the dramatic shift in the labor market across the country, which has led to an employee retention crisis.
According the United States Department of Labor, there were approximately 6.6 million job openings in the U.S. in May 2018. The same year also saw a 3.8 percent unemployment rate.
A report from the ADP Research Institute has indicated that employee turnover in different sectors is currently averaging approximately 60%. The report further indicates that high turnover rates have been observed in sectors such as hospitality/leisure and construction.
The role played by employees in any organization cannot be overemphasized or undervalued. Basically, they are the backbone of any company/business.
So, when a company experiences a high turnover rate, the effects are felt in every aspect.
One of the biggest impacts of employment turnover is reduced productivity and loss of experienced staff. When a company loses an employee, it loses more than just skills and talent. It also loses a trained employee who understands the goals of the company, the need to achieve those goals, and their individual roles in implementing those goals.
Of course, the result is low productivity levels which ultimately lead to reduced sales and profits.
Speaking of profits, an organization that is facing a huge employee turnover might find itself settling employees benefits as well as litigations from unsettled separation disputes.
Basically, employment turnover can be a big blow to any organization.
Pay and Benefits are two reasons that have been cited as the major cause of employee turnover in organizations.
Basically, employees need a job that can offer them enough money to afford a decent lifestyle, healthcare, and education for them and their families.
If a company they are working for pays below the standard rates with poor benefits, then they have no choice but to leave in search for greener pastures.
In most cases, people who choose to work in such companies only do so to gain experience and knowledge and later move to a company that offers better pay and benefit packages.
There is also the issue of lack of appreciation. Employees need to be recognized and appreciated for a job well done. They need to feel that their efforts are not being taken for granted.
The moment employees feel unappreciated, they’ll become demoralized and eventually leave.
In one survey involving HR leaders, nearly half of the leaders pointed out burnout as a common reason for their annual workforce turnover.
Other reasons pointed out during the survey include;
•Insufficient technology for staff to do their jobs properly
•Outdated HR technology
•Lack of company vision
The age of employees has also played a big role in the high turnover rates currently being experienced.
Apparently, the millennial generation has in the past been labeled as “job hoppers.”
According to Robert Half, a staffing firm, approximately 65 percent of millennials believe that job hopping can be beneficial for their careers.
According to the firm, millennial job hopping is approximately 16 % higher compared to employees aged 35-54 years, and about 24 % higher than employees aged 55 years and older.
Employers looking to improve turnover in their companies must find ways to improve employee retention.
•Leveraging existing employees benefits
•Increasing pay rates
•Cultivating an environment that supports frequent, open, and productive communication
•Encouraging growth and recognize hard work and effort
•Recognize the dynamics of the employees’ age on tenure
•Understand the needs of company staff at every single stage of their career
•Employ Employer Value Proposition (EVP) strategies, which is the reason a skilled employee would want to work for any company or organization. Doing so will enable a company to get the most out of their skills and knowledge, and hence improve employee retention.
Being an employer comes with many challenges, with one of them being workforce turnover. It’s a leading cause of business failure, immense losses, reduced productivity, and so much more. Understanding what needs to be done to improve employee retention is crucial.