Turnover is an ongoing challenge for organizations. It can increase operational costs, impact productivity, lower morale, and detract from the bottom line.
Consider this: replacing a full-time employee can cost from half to 2X that employee’s yearly salary, which includes the cost of recruitment, training, and inefficient operations. Even replacing a part-time employee can have a significant time and monetary impact.
In 2024, with continued economic uncertainty, persistent inflation, and low unemployment rates impacting the hiring landscape, it’s more crucial than ever for companies to prevent ongoing employee turnover.
What’s behind rising employee turnover?
Before you can take steps to mitigate employee turnover, you need to first understand what’s prompting workers to leave.
According to the Bureau of Labor Statistics (BLS), the average employee turnover rate in the US was 5.7% in 2023.
Compared to 2022, workers were less likely to quit their jobs in 2023, with a decrease of 12%, or 6.1 million fewer jobs last year. Furthermore, the Wall Street Journal reports Americans are taking longer to find new jobs.
While we don’t yet know how 2024 will compare to 2023, we do know these are among the biggest drivers of increased turnover the past few years:
- Low pay. A survey from BambooHR notes that 73% of employees said they would consider leaving their current job for a higher paycheck. They also noted that they would quit for a smaller raise (or no raise), compared to previous years. With our ever-changing economy and inflation on the rise, many workers will head for competitors or even jobs in other industries if it means a better wage.
- Lack of flexibility. According to the 2024 Flex Report, more organizations continue to realize the demand and need for flexibility in the workplace. Benefits include:
- Increased employee engagement
- Increased productivity
- Ability to attract top talent
It is anticipated that by the end of 2024, more than two-thirds of US companies will adopt flexible and remote work opportunities for their employees.
- Feeling underappreciated. BenefitsPro notes that 23% of employees feel underappreciated at work. This trend has significantly increased in recent years, revealing trends in employer recognition have drastically declined. A little recognition can go a long way toward letting workers know you value their efforts and view them as a crucial member of the team. Acknowledgement costs a lot less than backfilling an open role.
- Lack of growth opportunities. Clearly defining growth opportunities for employees and following through on career path development is crucial for employers. Many employees state that without clearly defined career goals, they are likely to begin looking elsewhere for employment. SHRM reports the top three reasons for leaving a job are lack of career opportunities or development, health and family issues, and a work/life imbalance.
- Work culture. Pay, flexibility, recognition, and growth are all part of the larger overarching umbrella of work culture. Today’s workers have more employment options than ever. If they feel that work culture is toxic, demonstrates a lack of respect for employees, or promotes unethical behavior, they will not hesitate to leave in search of a more positive environment.
5 tips for increasing worker retention
As an employer, once you’ve hired the right employees your work isn’t over. Just because a candidate becomes an employee, it doesn’t mean they will stay.
The first year of employment is rife with voluntary exits, two out of five employees (41%) say they will job hunt in 2024, with an additional 24% saying they aren’t sure yet.
It’s harder than ever to attract talent, so don’t let your hard work go to waste. As you look to increase employee retention in 2024, these 5 tips can prompt workers to stay.
- Re-evaluate pay scales. The cost of living has skyrocketed. Inflation continues. To retain workers in 2024, you have to stay on par with the wages your competitors are offering. Both competitors within your industry, and those in other industries, hire workers with similar skills.
To ensure your pay scales reflect reasonable ranges without over- or under-valuing what a position is worth, do your research. If you operate in a hot regional market, pay close attention to local salaries listed for similar roles. If you operate countrywide, consider what the same positions go for in different states, but be sure to adjust for cost of living in your area. Look online, drive around to see if signs are posted, and even check the newspaper. Wherever jobs are advertised, that’s where you want to look. - Create defined growth paths. While every role has a unique trajectory, those filling a role want to know there’s the potential for them to “go somewhere”—whether that means staying in the same position and taking on more responsibility, advancing to a managerial position in the same department, transitioning into a new role in a new department, or creating new processes for those who come after.
Career growth also means investing in ongoing training and education opportunities. Think about what career advancement means for a worker, and provide that to them, so they can see a future with your company and know you’re invested in their long-term success. - Revamp your onboarding. The onboarding phase sets the stage for an employee’s experience with your company. It’s crucial to new hire retention, yet still overlooked at many organizations. That’s why it’s time for an onboarding overhaul. After all, a strong onboarding program improves new hire retention by 82%. So where do you start? Begin by taking paperwork out of the equation—have new hires complete all forms before day 1. Set up informal welcome meetings with their direct team, with no expectation other than having them get to know one another. Assign a mentor who can answer their questions about company policies and rules, and show them the ropes. Pace out training to avoid overwhelming them and ask them what they need via weekly check-in meetings.
- Focus on job flexibility. Whether salaried or hourly, today’s workers are looking for better work accommodation. Depending on the job and the industry, additional flex time and flex hours, more paid time off, added breaks, revised overtime protocols, and the ability to work from home in some capacity could all be important to a job candidate.
Take a step back to assess your existing work policies to see where there might be room for greater flexibility. A competitor with a similar job posting in the same pay range may win out simply because their work processes and expectations are seen by a job seeker as more aligned with achieving better work (and work-life) balance. - Embrace employee recognition. Workers want to feel appreciated, seen, and valued, regardless of industry or role. Celebrating an employee’s achievements or acknowledging outstanding efforts shows that they are more than a timesheet or cog in the wheel, and that their contributions are not taken for granted.
Look to create a culture of support, one that champions your staff and sets the precedent for a positive work experience. Existing workers will be less likely to leave if they feel they matter, and candidates will see that your organization feels every role matters. It could be as simple as sending an informal company-wide email every Friday to recognize high performers, or as formal as an official employee recognition program with benchmarks to reach, coworker nominations given, and awards handed out.
While we know each of these tips will help you on the road to increased retention, the right salary is especially important when it comes to attracting and retaining workers. To learn more about how salary impacts the open roles you’re looking to fill, download our 2024 Salary Guide today!