Small Business Brief

Business Advice, Employees

Retention Strategies: How to Reduce the Cost of Employee Turnover

The average employee turnover rate for companies in the U.S. is over 57%. How can you make sure you retain the talent you need while protecting your bottom line?

High employee turnover can do a lot of damage to a business. That’s especially true if you’re just getting started and don’t have a lot of resources like other larger, more well-established companies.

The Great Resignation is real, and you need a strategy to deal with it. Let’s look at some ways you can keep your best talent and reduce the cost of employee turnover.

Start at the Top

Leadership matters when it comes to employee retention. Bad leadership can drive away great employees.

Start at the top when searching for ways to keep your turnover rates down. Transparency is key, as well as honest feedback for both employees and management.

Offer What They’re Worth

The cost of losing an employee can be up to 33% of their salary. Factor in the hiring and training process to bring someone new on board and it gets expensive quickly.

Talented workers know they can jump to another company and potentially boost their salary. It’s worth it to bump their pay if they’re worth it in order to keep them on board.

There is an employee retention credit that you can potentially qualify for to balance your budget. Learn more here about receiving this credit.

Consider Remote Work

It’s true that a lot of important collaboration can occur in person. It’s always good to get to know your employees and see how they structure their day.

However, a lot of the workforce has gone remote since the pandemic — and prefer to keep it that way. See if remote work is doable for your business in order to avoid turnover.

Bonus: with more workers at home, you might be able to downsize the office space that you rent. That way, you save a little bit more and stretch your small business dollars further.

Invest in Employees

Just like you need to water a plant and put them in good soil for them to thrive, you need to do the same with your employees. Are you missing out on growth opportunities for them?

Mentorships, skill-building classes, or financial support for continuing education show your employees you’re committed to nurturing their careers. It proves that you see their presence as a long-term investment, not a number on a spreadsheet.

Reducing the Cost of Employee Turnover

Don’t allow your business to get stuck in a pattern of taking on new talent only for them to leave you in the lurch again. Break the cycle and reduce the cost of employee turnover with our guide.

It won’t just cost money when you lose an employee. It also costs time and resources, and those are precious enough as a small business.

Show your employees your care. Start at the top with great leadership and try to listen to employee concerns and meet them or make a compromise.

Looking for more tips on making sure your company thrives? Check out our other business articles to stay on top of your game.