How to Reduce Employee Turnover

Employee turnover is a term used to describe the rate at which employees are hired and terminated. Turnover is a concern, or should be for all business owners and managers. Every time an employee leaves and has to be replaced, businesses suffer. When calculating the cost of 'turning over' an employee, one must consider several things: time used to interview replacements, lower productivity of inexperienced employees, training time and materials, etc.

My 10 years of managing low-wage employees taught me just how important it is to keep the employees already in the ranks, even if it's easy to replace them. For me, it was enough to recognize that my stress levels were significantly lowered when I had experienced employees around. Over the years, I made it my mission to learn why employees quit jobs and use that information to reduce my turnover. Read on to find out what I learned.

Most employees who quit their low-wage jobs aren't leaving for a better paying job. Naturally some are, and there's little to be done about that except to wish them well. If you are a manager who's been blaming your employee turnover problem on the low wages imposed by your corporation, you won't like what I'm about to say. You're wrong.

The primary reason employees leave low-wage jobs is because of environment. While it's not always a manager or the team directly, it's usually something they are missing that creates an hostile environment.

What managers must remember if they hope to stem the tide of employee turnover is that these low-wage jobs are usually not terribly fulfilling or pleasant. People are working long or odd hours for low wages and the jobs they are doing are smelly, boring, or physically draining. In return, employers are offering wages that cannot hope to support one person, let alone a family. Neither the job nor the wages are likely to change for the better, so managers must effect what changes they can.

To understand how to create an attractive or comfortable work environment for employees, we must first understand why our employees are working in these jobs. While the job itself isn't usually pleasant, there are some positive things about it which will attract employees. First, there's flexibility. Students, parents who need to be home with their children during normal business hours, or people who are working a second job are attracted by the flexibility schedule offered by low wage jobs. The second reason people will take a low wage job is because they lack experience or training for anything else. The last group of people who will take a minimum wage job don't lack experience or training but literally can't find anything better. In the interest of reducing turnover, I generally recommend against hiring people in this third group, regardless of how attractive a candidate they are - they won't be around long enough to be worth the training investment.

Probably, nothing I've introduced so far will come as a shock. For a shock, continue reading my plan to create and maintain an environment that employees will like.

First, employee requests for time off should never, ever be denied unless they are abusive to other employees. Usually, 'abusive to other employees' is code for 'requests every weekend off' or something similar. Why is this so important? Several reasons. First, remember that one of the three reasons people work in these crappy jobs is because of the flexibility. When you regularly deny requests for time off, you are taking away a primary motivation for continuing in that job. Shooting yourself in the foot is an apt expression. Some will argue that they can't run their business if everyone is always taking time off. I'm here to tell you that you're wrong. You can't run your business if you don't provide for your employees' needs. Their job is not prestigious, fun, interesting or well paying. If you don't give them the time off that they want, all you are giving them is a little money for an unpleasant job - they can get that anywhere. If your employee pool tends to request off a lot of days, hire more people. In the matter of holidays, I often had nearly all my employees requesting off. I solved this problem by going to each of them and explaining that if they could work two or three hours of their choosing, I would appreciate it. I never was understaffed for holidays, because my employees worked as a team and while not all of them could work every holiday, enough could that my shifts were covered and no one felt abused.

Second, managers must consider their employees' priorities important, or at least understand and respect the employees' priorities. Commonly, low wage jobs are filled by high school students and former stay-at-home-parents. Many managers I knew went astray in their handling of employees because they couldn't relate to that employee's priorities. To a 16 year old, a weekend party or play is more important that a low-paying job. Managers have often sacrificed much in terms of family, social life, or recreation for their job, and they often have difficulty considering their employee's winter formal more important than their own high school reunion (which they skipped for work.) Reality check: to a teenager, their social life is vitally important, and it should be. An unwise manager might succeed in forcing employees to sacrifice their priorities for work. Shifts will be covered for the short term, but the long term direct result is high employee turnover. A smart manager will realize that while they have sacrificed a lot, they have been rewarded for their sacrifice. The employee gets little reward for the same sacrifices.

Third, train like your life depends on it. Employees with spotty training will never feel comfortable in their jobs. They will know they are probably doing something wrong. They will feel the frustration of their coworkers when they mess up. This will lead to them feeling alienated from the team. They will go home feeling bewildered and uncomfortable. They will feel like failures (even though the failure isn't theirs) and will soon leave to find a job where they feel comfortable and successful. Training is more important than any other thing a manager does directly with employees.

Fourth, be nice. Specifically, ask your employees to perform the needed tasks and thank them for doing their jobs. Notice when they do something right and comment on it. Don't hold back on correcting bad behavior, but notice good behavior just as often. For illustration, I'll refer to one of my former jobs. I worked as a department head for a ritzy health club. Every week, my boss and I had a meeting where he would tell me what my department had done wrong during the prior week. I'm an excellent trainer and manager, so I took these issues seriously and corrected them. The next week, no comment would be made about whether I'd succeeded in the earlier goals, we'd simply discuss the new list of negatives he'd compiled.

This company regularly handed out movie tickets and other goodies to department heads, but never for specific achievements, simply as a general thank you. After four months, I confronted my boss at our regular meeting. I asked how he thought I was doing. He told me he thought I was doing a great job. I asked, "In what way?" He was confused. I explained that in four months, he had not found one specific thing he could compliment me on. I went on to say that if this lack of positive reinforcement was a true reflection of my performance, I thought he should probably fire me because I'd not done a single thing well enough to merit comment in 4 months. He was confused, pointing out that the movie tickets and thank you brunches were rewards for a job well done. This wasn't good enough for me, or for anyone. They could have kept the 'extras' and simply noticed that I'd successfully tackled every single issue they'd put on my plate and I'd have been satisfied. Five months later, I quit that job. My boss still had not been able to find a single task I'd done well enough to merit comment. In general, I liked the job, I liked my employees, my coworkers and my customers. I even liked my boss, but I couldn't continue in a job where I never felt successful, despite my success.

I think there are two reasons why managers fail to appropriately notice positive achievements of their employees. First, the employee is only doing their job. Second, they fear that they will be seen as 'kissing ass' (a comment one of my subordinates made to me when I told him he had to practice positive reinforcement.) For the first, it's true, the employee is only doing their job - and if you are giving them excellent benefits and heaps of money, you can probably skip the praise. If they are minimum wage, dish out the thanks. For the second, it's all ego, a common but undesirable trait in management. Employees who are regularly noticed positively by their managers don't think less of their managers, and they don't lose respect. They go home feeling happy that someone noticed they were doing their job well.

These are only four of a zillion ways to reduce turnover in a low-wage environment. The wonderful thing is, they are all proven effective and easy to implement. If you've been having problems with employee turnover, I guarantee that following this advice will make your work life easier.