09 Sep Reduce Employee Turnover – 4 Key Strategies
High employee turnover is one of the leading causes of low revenue and decreased efficiency among small, medium, and even large commercial organizations. Not only can high turnover slow down many of your most important business processes, but it also greatly increases the cost of training and maintaining new staff. Fortunately, high turnover does not have to be an inevitability for your business.
There are different methods to lower turnover rates and improve employee retention over both the short and long term. However, some methods are far more effective than others. Ultimately, you will want to ensure that you keep employee morale high and offer benefits that entice your staff to stay with your organization for years.
So, in today’s post, we will look at 4 key strategies to help your business lower staff turnover and save on hiring costs at the same time.
Show Employees Appreciation
Regardless of the size of your business, employee recognition should be a primary focus at all times. Employees can often feel like faceless cogs in a large machine if left with little attention or very few signs of appreciation from management. As a result, showing your staff appreciation can help improve employee satisfaction and reduce the risk of high turnover rates going forward.
There are various ways to say thank you to employees, but it’s often best to go with organization-wide initiatives. For example, your company can offer awards for hardworking or high-performing employees every week, month, or quarter. Not only can this reduce turnover, but it can also help improve productivity by providing greater incentives. Therefore, it’s always a good idea to celebrate success within your organization as often as possible.
If you’re looking for employee appreciation ideas, you should also consider more personalized methods. A simple thank you note can go a long way to show that you recognize and care about your staff. More than anything, you should try to maintain an uplifting work environment that is founded on positive reinforcement, rather than negative practices like fear, intimidation, or punishment.
Maintain Market Rate Salaries
At the end of the day, employees care more about fair compensation than most other factors. You can shower your employees with kindness on a daily basis, but if you fail to maintain fair market pay rates, you will continue to see staff leave for better-paying jobs. Thus, paying salaries that are at or above market value is one of the best ways to keep your staff working with you for longer periods of time.
Naturally, this will require you to do some research on the current market value for different positions and job roles within your industry. Your organization may have a very predetermined pay scale, but if it fails to keep pace with industry standards, current and prospective employees will take notice. In short, reducing turnover rates hinges on your ability to offer workers reasonable compensation for their efforts.
However, it may not always be in your budget to raise salaries. This may require you to reevaluate your operating budget or even trim down your staff. In any case, if you find that you cannot pay fair market pay rates, you will almost certainly need to examine the vitality of your business model.
According to the latest salary statistics, the average entry level salary for an employee in the United States rests somewhere between $20,000 and $45,000. With inflation, these numbers will likely increase in the near future. In any case, this encompasses a broad spectrum of jobs, locations, and industries. It also does not account for non-entry level positions, which usually command much higher pay. Consequently, you may need to do some market research to find a good balance between salaries that offer fair compensation and salaries that don’t hurt your bottom line.
Provide Career Advancement Opportunities
In addition to fair pay, most people are far more willing to stay with a given organization if they feel that there are employee advancement opportunities. If someone works in the same position for several years with no indication of career progression, they will likely leave to find an organization with greater upward mobility.
Advancing career opportunities for employees is not all about handing out promotions, either. Career advancement opportunities can also come in the form of enhanced job training and skill development. If you offer employees the ability to improve and grow their skillset, you will give them even more reasons to stay at your company.
While every business handles career advancement a little differently, it is good to keep your staff informed of the opportunities at their disposal. For example, if employees know that they can expect an automatic pay raise and a promotional review after five years at your company, they will likely stay for the duration of this period, if not longer. This will help boost your company’s retention rate above the national average, which currently rests at about four years.
Run Payroll On Time
Finally, it’s important to note that you can implement all of the strategies above and still experience high turnover rates. Why? Because, more often than not, payroll inefficiencies can cause an otherwise happy workforce to consider exiting your business. When staff knows that they can always expect their paycheck on time, employee morale and employee productivity generally remain high. Alternatively, if your business cannot deliver payroll on time or experiences intermittent delays, your workforce will not wait around for very long.
This is why it is vital that you avoid delaying payroll or running payroll late. In addition to the financial strain it puts on your workers, it can also have a negative impact on your business revenue. If your payroll taxes are between two to five days late, you may have to pay a 2% late payroll tax penalty. If the delay lasts for more than five days, the penalty increases to 5%.
So, what can you do if you simply do not have the cash on hand to run payroll on time? Fortunately, you don’t need to turn to expensive Merchant Cash Advances (MCAs) or similar costly funding sources. Instead, you can pay your staff on time via payroll financing. This form of payroll funding provides you with a short-term injection of cash to pay your employees now. In essence, it is a small business loan for payroll that comes with a low interest rate and a reasonable repayment plan.
The Bottom Line
If you want to decrease turnover and save your business money, you have to ensure that you’re providing a positive environment for your workforce. This includes showing employees appreciation, maintaining market rate salaries, providing career advancement opportunities and, — perhaps most importantly — running your payroll on time. Thankfully, if you need help getting money in the hands of your employees when they need it, Payro Finance is here to help. We offer small business loans to cover payroll, giving you the power to pay your staff now, even if you’re experiencing temporary cash flow issues.
So, could a small business loan for payroll be the right solution for you and your staff? If you’re interested in learning more about the advantages of payroll financing and how it can help your business reduce employee turnover, feel free to reach out to Payro Finance today!