Four out of five (78%) business leaders rank employee retention as a critical business need. Yet managing employee turnover is still one of the biggest challenges of the Human Resources (HR) department for many organizations, if not all. High employee turnover inevitably leads to a whole new phase of recruitment, which is both time-consuming and an expensive process.
As per SHRM, the entire cycle of severance, recruitment, training and lost productivity can cost a business anywhere between 90% and 200% of the old employee’s annual salary. Besides being an expensive affair, high employee turnover can also affect the morale of the remaining employees.
However, did you know that more than 75% of voluntary turnover is preventable? It is mostly a result of a combination of multiple push factors, like a lack of career development opportunities, an unfavorable work environment, unapproachable management, a mismatch between job requirements and skillsets, dissatisfactory compensations and benefits of HRMS, and a low work-life balance.
Fortunately, most of these factors can be addressed with the help of a robust human resource management system (HRMS). HRMS can be instrumental in understanding the key catalysts of high employee turnover and strategizing to reduce it. Here’s how:
What leads to Employee Turnover?
There are various reasons for employee turnover, they leave their workplace for better opportunities, increments, better benefits, progress in career growth, work-life balance and because of their manager. Additionally, the major factors come from undefined company culture, which includes whether the company values their employees, they believes in work-life balance. Retention of employees can be predicted by culture, benefits, salary and personal growth.
Why Is It Important to Reduce Employee Turnover?
It is crucial for any organization to minimize employee turnover as it directly impacts the company’s growth and profitability. Employees with efficient skills are assets for the companies. It helps in delivering effective business plans, better collaboration, smoother operations. However, finding the right talent for the company is one of the challenging tasks.
Analyse your turnover rate and reasons.
Finding the exact rate of and reasons for employee turnover is crucial—a task that can be simplified with robust HRMS. A comprehensive feedback system, integrated into the HRMS, can not only help to understand the factors that are leading to employee discontent, but it will also help to identify those who are most likely to leave the organization soon. A cloud HRMS with embedded analytics can suggest prescriptive methods to implement strategies that can improve employee morale and increase retention rates.
Monitor the long-term employees:
Leveraging an HRMS to conduct employee satisfaction surveys and feedback sessions, especially with senior employees, can help identify the key factors driving their contentment and prioritise changes that need to be made in the organisation for the benefit of employees. Action based on this information can reduce employee turnover.
Ensure your hiring process is in line with your business forecasting.
While planning for expansion, companies often overlook factoring in the growth in their workforce, which is necessary for accommodating new business requirements. An HRMS, integrated with core business processes and forecasting systems, can help executives understand the number of required hires and predict how the associated costs of onboarding and training would reconcile with the annual budget. Such forecasts help HR take a calculated approach to recruitment and ensure that employee turnover remains low.
Find the right candidate.
A crucial element of reducing employee turnover is hiring the right candidate. The right customizable HRMS system can make recruitment a responsive, predictive and effective process. The recruitment module of an HRMS automates tasks such as profiling, shortlisting and screening candidates, briefing new recruits on role responsibilities and onboarding while ensuring that the recruit is the perfect fit for the available position.
Support development:
Investing in the training of your workforce is the most effective way to reduce labour turnover. An HRMS can be leveraged to conduct and manage training sessions to ensure your workforce development efforts are on track. From pre-training objective setting, post-training questionnaires, follow-up surveys, and discussion sessions between trainees and line managers to skillset tests, each step in the training process can be coordinated via the software. It will, in turn, enhance employees’ skillset, enabling them to excel in different roles and design a progressive career plan.
Help to strike work-life balance:
Employees usually plan their lives around work schedules. Employees can use an HRMS to communicate their schedules ahead of time and vice versa. Self-service portals can make it easier for employees to apply for leaves, time-offs, loans, etc. and get quick approvals with minimum delays. Thus, they can plan events around their work accordingly and achieve a better work-life balance. This can reduce employee dissatisfaction rates, which often result from delays in approvals. A better work-life balance can also boost employee morale, which in turn can curb employee turnover rates.
Leverage predictive analysis for smarter people analytics:
HR seldom uses the mammoth employee data they collect. Having an HRMS with analytical features can help to draw valuable insights from that data to identify employees’ behavioural patterns, risks and opportunities. Predictive analytics can help HR leaders make evidence-based decisions, enabling them to address areas of concern and reduce resignations, terminations and panic hiring. To understand the full potential of predictive analytics in HR, take a look at this video:
Turn to artificial intelligence (AI) for improving employee retention.
AI can help HR understand employee performance, attitude towards their job, and the health of the larger business culture. The technology enables HR executives to track the behavioral patterns of each employee, leading them to understand who is likely to resign soon. AI algorithms, embedded in employee feedback modules, can automatically channel concerns to HR and even suggest plausible solutions for the same. This eventually enhances employee satisfaction and improves employee turnover. The following video sheds some light on how AI is simplifying HR tasks over time:
Today’s employees are curious to know what their employer sees in them, how their company values them, and what plans it has in store for them. They seek to achieve personal development along with the advancement of the company. With the right key module of HRMS, stakeholders can understand their employees better. By strategizing to reduce employee turnover, they can truly make employees the biggest asset of their company.
