An HR Story - Reducing Staff Turnover from 40% to 15%
A recent survey revealed that 51% of employees are disengaged, while 13% are actively disengaged. Research where 600 small businesses of 50–500 employees participated showed that 63.3% of them have more trouble retaining their workforce rather than hiring it.
I work with many different sized companies across multiple industries, last year, I worked with a small business specializing in eco-friendly landscaping services. The company quickly gained a loyal customer base due to its commitment to sustainability and quality service.
However, despite its initial success, they faced significant challenges with employee retention and satisfaction. The root cause of these issues was traced back to the lack of regular employee check-ins, they felt that they weren’t being heard and they hadn’t had performance reviews or pay rises in years.
The Issues
Over three years, the company saw an employee turnover rate of 40%, significantly higher than the industry average. Key positions, including experienced landscapers and designers, were often vacated, leading to operational disruptions and increased training costs for new hires.
An anonymous survey conducted by a third-party consultant revealed that 70% of employees were dissatisfied with their jobs. The primary reasons cited were the lack of recognition, unclear job expectations, and unresolved concerns regarding work conditions and career growth.
Employees felt that their concerns and suggestions were ignored. Without regular check-ins, there was no formal channel for them to voice their issues or provide feedback. This led to frustration and a feeling of being undervalued.
Consequences
The high turnover and frequent need to train new employees disrupted workflow and affected project timelines. Clients noticed the inconsistencies in service quality, which impacted their reputation.
The remaining employees experienced low morale, which further decreased productivity and increased the likelihood of mistakes. The lack of a supportive work environment made it difficult for teams to collaborate effectively.
The financial strain of hiring and training new employees was significant. Additionally, the company had to invest in temporary staff to cover gaps, further increasing operational costs.
This is where I came in.
I recommended implementing:
Regular Employee Check-Ins: Monthly one-on-one meetings were scheduled between employees and their managers. These check-ins provided a platform for employees to discuss their work, share any concerns, and receive immediate feedback.
Structured Performance Reviews: A formal performance review process was introduced, where employees received comprehensive feedback on their performance every six months. These reviews included setting clear goals, identifying areas for improvement, and recognizing achievements.
Employee Feedback Mechanism: An anonymous suggestion box and quarterly team meetings were introduced to encourage open communication. Employees were assured that their feedback would be taken seriously and acted upon.
Training and Development: A continuous professional development program was launched to provide employees with opportunities for growth and skill enhancement. This included workshops, online courses, and on-the-job training.
The Results
Within a year of implementing these changes, the employee turnover rate dropped from 40% to 15%. Employees felt more valued and were less likely to leave the company.
Employee satisfaction scores improved significantly, with 80% of employees reporting higher job satisfaction. The regular check-ins and performance reviews made them feel heard and appreciated.
With clear expectations and regular feedback, employees became more productive and engaged. The company saw a 20% increase in overall productivity, leading to better project outcomes and client satisfaction.
The new communication channels fostered a more collaborative and positive work environment. Employees felt more connected to the company’s mission and were more motivated to contribute to its success.
Conclusion
By addressing employee concerns and providing clear feedback and development opportunities, this client was able to significantly reduce their employee turnover and enhance overall productivity. Engaging with your workforce is critical in keeping your business going especially in these tough times.
Anna Ramm
Network HR
anna@networkhr.co.nz
