how to control and manage staff turnover

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may 2006

What exactly is it that makes staff leave? Why do they stay? What would make them happier and more motivated? A certain amount of turnover is healthy, but if half the staff are looking for alternative employment at any one time you know you have problems. Contrary to popular belief it is not simply a matter of pay that makes staff scrutinise situations vacant. The reasons are often complex, but once you are aware of the factors that affect turnover you can do a great deal to reduce and control it.

how can I reduce staff turnover?

Poor pay is rarely the only reason people leave a job, but it is certainly a disincentive to stay. Have a clear, fair pay system with competitive rates of pay for the business you are in. Keep tabs on comparable jobs in the industry and keep up to date. Terms and conditions in contracts are also very important, and if these are stingy workers will be unhappy. Make sure your terms and conditions encourage loyalty. Incentives and other relevant staff benefits are also valuable to staff. Some businesses shy away from offering incentives, because they can appear expensive this is not always the case. For example, the cost of providing a low cost health package to everyone may work out much cheaper than constantly replacing workers. Recruitment agencies are very expensive and whatever option you choose you will have to invest an awful lot of time. Then there is the hassle of training new staff. A health care package can also reduce absenteeism. If you have good staff and you want to keep them make sure they feel they are getting something extra from your business.

Many of the issues that affect staff turnover do not really impact on costs. For example, simply making sure employees get formal appraisals will give them an opportunity to discuss their performance and job prospects. Staff aspirations are important so make sure you match jobs to people and make sure they feel valued. Training and development also encourage people to stay with a company, so offer it when appropriate. For example, there is an abundance of cheap IT training available, which can be done either on-site or at various centres and colleges. In particular training those under 24 years old, is often free. Strike a balance between the cost of training and the cost of losing a valued member of staff to another business. Make sure the training fits your needs.

When staff first join the company, simple steps like making feel welcome are very important. Do they know where things are, and what they are supposed to do as well as understand what others are doing? Have you given a clear picture of how the company works and how they will fit it? Do not leave them confused or guessing who does what. Get staff established and help them feel settled as quickly as possible. Encourage them to be an important part of the team, all working to the common business goals. If people have complaints they should be able to air them through an effective grievance procedure, and feel their views will be taken seriously.

To help control staff turnover you also need to recognise work-life balance in your business’ policies (see separate article on work-life balance), and encourage outside work interests. Flexible working arrangements which adapt to people’s needs (see separate articles on flexible working and benefits of part-time working) can also encourage staff to stay.

how should I manage staff turnover?

If there are too many leaving parties for your liking and you have an uneasy feeling that staff is dissatisfied, you must take control and minimise the impact of unwanted turnover. Be proactive and try to identify the causes of turnover by talking to individuals or groups of staff to root out any underlying problems. How is general morale in the workplace? Surveying all staff (make it anonymous to gain to true picture), can be helpful, although you must seriously address issues arising. Look out for high levels of sickness (see separate article on sickness) or absenteeism, which may indicate a problem.

Check your recruitment and selection procedures to identify potential problems earlier and make sure your business’ expectations are crystal clear at the recruitment stage. Basically, you must employ the right people in the first place and this is easier said than done. Consider formal exit interviews. These can reveal common reasons for people leaving.

To minimise disruption make contingency plans to cover and replace leavers. To ensure these new workers are not out the door in another six months, take on board anything you have learnt from leavers.

Remember that people want to work for a company that is fair and provides support and motivation. Consider new and different incentives for retaining those staff with the key skills for your business. These may be individual or team productivity bonuses, performance-related pay, attractive pension arrangements or non-financial incentives such as healthcare. Finally, consider the culture of the business. This is often defined through management and leadership. Good leadership can influence the retention of staff and poor relationships affect everyone at work. It will take time to implement new procedures, but the benefits are a happy, healthy workplace and less hassle and expense for the business. Yes people will leave, but you want them to leave for the right reasons and to feel upbeat about their time with your company.

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about the author

Heather Harrison is a highly regarded member of the Duport team. Her thorough knowledge of small businesses, combined with her talents developed during a career as a well respected journalist, make her articles very popular with our readers. Heather has worked on a variety of weekly and monthly magazines, both in the consumer and business press.

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