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High turnover rates are a nightmarish outcome for managers, executives, and HR professionals. These professionals are responsible for keeping top talent engaged and motivated, and failure to achieve this can be deeply frustrating.

After all, employees are the backbone of an organisation, and retaining them is crucial for the long-term success of the business. However, turnover can be a significant problem for many businesses, resulting in a loss of productivity, decreased morale, and increased hiring costs.

In this article, we will outline key strategies for retaining staff, minimizing turnover rates, and setting the organisation up for success throughout the entire talent management cycle.

section one

Calculating Turnover Rate

Turnover rates are calculated by taking the number of employees who leave, dividing it by the average number of employees over that period, and then multiplying by 100 to convert to a percentage. For example, if 100 employees left within a year and the organisation has 1000 employees, this represents a 10% annual turnover rate. Alternatively, if 10 employees leave the organisation each month, and the organisation has 1000 employees, this represents a 1% monthly turnover rate.

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Regardless of the metric used to measure turnover rate, a high number is detrimental to the organisation as a whole. When employees unexpectedly leave the organisation, existing employees are left to pick up the slack, which reduces morale and increases the likelihood of further attrition. This puts the organisation into a vicious cycle that could ultimately cause its collapse.

However, organisations have many strategies available to them to minimise turnover rates. Here are five such strategies that can be employed to avoid future attrition, help retain top performers, and avoid making additional bad hires.

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section two

Hire for Role Fit

Role fit refers to the alignment between an employee's skills, experience, and personality and the requirements of the job they are performing. Essentially, it's about hiring the right person for the right job. When an employee is a good fit for their role, they are more likely to be engaged, productive, and satisfied with their work.

Hiring for role fit is essential for reducing turnover rates because it helps ensure that your employees are happy and satisfied with their work. When employees are a good fit for their role, they are more likely to feel fulfilled by their work, which can lead to increased job satisfaction and a lower risk of turnover. Additionally, employees who are a good fit for their role are more likely to be engaged and productive, which can improve the overall performance of your business.

"Hiring for role fit is essential for reducing turnover rates because it helps ensure that your employees are happy and satisfied with their work."

- Ben Schwencke

There are several effective strategies you can use to hire for role fit:

  • Define the Role Clearly:Before you start the hiring process, it's important to clearly define the role, including the skills, experience, and personality traits required for success in the position. This will help you identify candidates who are a good fit and streamline the hiring process.
  • Use Competency-Based Interviews: Competency-based interviews are designed to assess how a candidate's key competencies underpin the behavioural requirements of the role. This can be an effective way to evaluate whether a candidate is a good fit for the role.
  • Use Pre-Employment Assessments: Pre-employment assessments can help you evaluate a candidate's skills, personality, and work style. These assessments can be a useful tool for identifying candidates who are a good fit for the role.
  • Conduct Reference Checks:Reference checks can help you validate a candidate's skills and experience, as well as gain insight into their work style and personality. This can be an effective way to ensure that a candidate is a good fit for the role.

Although implementing this consideration requires a full reset of the organisation's hiring practices, it can minimise the probability of bad hires and reduce turnover rates in the long-term. Over time, as new hires replace older ones, the rate at which employees leave the organisation will reduce simply by addressing this issue, making it perhaps the most important aspect of managing turnover rates.

section three

Hire for Culture Fit

Hiring for organisational culture fit is another important strategy for reducing turnover rates and retaining top talent. Organisational culture refers to the shared values, beliefs, and behaviours that characterize a company.

When employees fit well within the organisational culture, they are more likely to be engaged, productive, and satisfied with their work.

They are more likely to share the company's values and beliefs, which can lead to increased engagement and productivity. Additionally, employees who fit well within the organisational culture are more likely to have positive relationships with their co-workers, which can improve the overall morale of the company.

There are several effective strategies you can use to hire for organisational culture fit:

  • Define the Organisational Culture:Before you start the hiring process, it's important to clearly define the organisational culture, including the values, beliefs, and behaviours that are important to the company. This will help you identify candidates who fit well within the culture.
  • Advertise Your Organisational Culture: When advertising for roles, always mention your organisational culture and its tenets. This will help candidates select or deselect themselves for the role, avoiding mismatches early on in the recruitment process.
  • Use Culture Assessments:Culture assessments can help you evaluate a candidate's fit within the organisational culture. Typically, these are behavioural questionnaires, similar to personality questionnaires, which are designed to measure specific behaviours that align with your organisational culture and its values.
  • Interview Using Your Values:When interviewing candidates, try to balance hiring for role-fit and culture-fit. Ideally, there would be significant overlap between the two, but often, there are cultural considerations that differ from the role. When interviewing, keep both elements in mind, and search for candidates who are a great fit for both the role and the culture.

Once you have accounted for role and culture mismatches, you will have set your organisation up for future success. Although the fruits of these labours are likely to require time, these two approaches are the most likely interventions to work long-term.

However, there are many causes of employee turnover aside from person-organisation mismatches. These problems stem from the organisation itself and require more immediate diagnoses and action. The following strategies will address ways to identify and correct issues for which the organisation is predominantly to blame for high turnover rates.

section four

Conduct Exit Interviews

While hiring for role fit and organisational culture fit can help reduce turnover rates, there will still be times when employees decide to leave. Exit interviews can provide valuable information about the employee experience within the company. By gaining insight into the reasons why employees are leaving, the company can identify areas where they need to improve. This can help reduce turnover rates in the future and improve employee satisfaction and engagement.

"Conducting exit interviews can be an effective way to gain insight into why employees are leaving and identify areas where the company can improve."

- Ben Schwencke

There are several effective strategies for conducting exit interviews:

  • Conduct the Interview with a Neutral Party:To ensure that the employee feels comfortable providing honest feedback, it's important to conduct the interview with a neutral party. This can be a member of the human resources team or an external consultant.
  • Ask Open-Ended Questions:To encourage the employee to provide detailed feedback, it's important to ask open-ended questions. This can include questions such as "What could the company have done to keep you?" and "What were the factors that led to your decision to leave?"
  • Keep the Interview Confidential:To ensure that the employee feels comfortable providing honest feedback, it's important to keep the interview confidential. This can help build trust between the employee and the interviewer.
  • Use the Feedback to Improve:Once the feedback has been collected, it's important to actually use it to improve the company. This can include identifying areas where the company needs to improve and implementing changes to address those areas. Although this feedback can be difficult to hear, it is vital that any issues raised are acted upon, helping to reduce turnover rates.

Managers, especially senior managers, often have a difficult time hearing negative feedback and can become defensive. It is important to resist this urge when conducting exit interviews, as the feedback itself can be tremendously helpful. Because the employee is leaving anyway, they have little reason to lie about their motivations, making them an essential source of insight into the dynamics of their team. This must be recognized by management, and any information presented to them must be taken particularly seriously.

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section five

Measure Employee Engagement

Measuring employee engagement is an important strategy for reducing turnover rates and retaining top talent. Employee engagement refers to the level of emotional investment that employees have in their work, their team, and the company. When employees are engaged, they are more likely to be satisfied with their work, more productive, and more likely to stay with the company long-term.

Measuring employee engagement can provide valuable information about how employees feel about their work and the company.

Measuring employee engagement can provide valuable information about how employees feel about their work and the company. This information can be used to identify areas where the company needs to improve and to implement changes that can improve employee satisfaction and engagement. By improving employee engagement, the company can reduce turnover rates and retain top talent.

There are several effective strategies for measuring employee engagement:

  • Employee Surveys:Employee surveys can be an effective way to measure employee engagement. These surveys can include questions that are designed to assess the employee's level of satisfaction with their work, their team, and the company.
  • Focus Groups: Focus groups can also be used to measure employee engagement. These groups can include employees from different departments and levels within the company and can provide valuable insights into how employees feel about their work and the company.
  • One-on-One Meetings:One-on-one meetings with employees can also be used to measure employee engagement. These meetings can be used to identify areas where the employee is struggling and to provide feedback and support.
  • Performance Metrics:Performance metrics can also be used to measure employee engagement. These metrics can include employee productivity, quality of work, and attendance rates.

By measuring employee engagement, you are able to gain quantitative data about your organisation's people. You can benchmark accordingly and see how happy and productive your staff are compared to other relevant organisations. More importantly, however, you can use this data to identify specific areas where your organisation is lacking. For example, these data may reveal that relationships between managers and staff are particularly poor and may be the cause of increased turnover rates.

Once you have this data at hand, organisations with access to the relevant expertise can leverage these findings for predictive analytics, the final stage in the process.

section six

Use Predictive Analytics

Predictive analytics is a valuable tool that can be used to reduce turnover rates and retain top talent. Predictive analytics uses data, statistical algorithms, and machine learning techniques to identify patterns and predict future outcomes. By analysing data related to employee engagement, satisfaction, and performance, companies can identify factors that contribute to turnover and implement strategies to retain top talent.

Using predictive analytics can provide valuable insights into employee behaviour, satisfaction, and performance. By identifying patterns and trends, companies can predict which employees are at risk of leaving and take proactive steps to retain them. Additionally, by identifying factors that contribute to turnover, companies can implement strategies to improve employee satisfaction and engagement, reducing the likelihood of turnover in the future.

There are several effective strategies for using predictive analytics to reduce turnover rates and retain top talent:

  • Collect Data:To use predictive analytics, companies need to collect data related to employee engagement, satisfaction, and performance. This can include data related to employee demographics, job performance, and engagement.
  • Analyse the Data:Once the data has been collected, it needs to be analysed using statistical algorithms and machine learning techniques. This can help identify patterns and trends related to turnover and employee behaviour.
  • Develop Predictive Models:Based on the data analysis, companies can develop predictive models that identify which employees are at risk of leaving and what factors contribute to turnover.
  • Implement Strategies:Once the predictive models have been developed, companies can implement strategies to retain top talent. This can include targeted interventions for employees who are at risk of leaving, as well as broader initiatives to improve employee satisfaction and engagement.

Predictive analytics can even be used to identify staff members who are especially vulnerable to attrition, acting as an early warning against turnover. If a predictive model has detected a group of candidates who seem at risk of attrition, the organisation can provide the necessary resources and support, helping to reduce the probability of them leaving. Although few tools have the power and depth of a well-executed predictive analytics project, this approach does require considerable expertise in statistics, psychometrics, or data science to be properly employed.

section seven

Summary

High turnover rates can be extremely frustrating for HR professionals and senior managers, as they highlight a failure somewhere in the talent management cycle. This could be due to ineffective selection decisions leading to repeated mishires, or issues with management and the organisation's systems that reduce employee engagement and cause good staff to leave. Whatever the cause, HR professionals and managers must pay careful attention to their turnover rates and any variables that could be impacting them.

When addressing role and culture-fit, Test Partnership offers a range of helpful assessments. Our soft-skills assessments are designed at the role-level, measuring soft skills that underpin both performance and engagement in a range of roles. These assessments can be customized to measure organisation-specific competencies, soft skills, or values, improving the quality of hire and reducing the probability of misfit. For more information on our suite of assessments, please contact us directly or register for a free trial.

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