Employees are the very identity of a company. When you have a high turnover rate, your company fails to grow to its full potential and eventually loses to the competition. You fail to retain knowledge long-term, and even the remaining employees lose their morale and confidence in the company.
We recently got in touch with the professionals at Whitham Group, a team of renewable energy recruiters that helps companies in the industry find suitable candidates. Nearly 79% of the candidates placed in other companies five years ago have retained their positions. Half of those even got promoted. “Who better to teach us about the causes of high employee turnover rate than the team at Whitham Group,” we thought.
In this article, we share everything we learned from this pleasant meeting. We’ll also offer ways to respond to the various causes of a high employee turnover rate. So without further ado, let’s get started.
1- Bad Work-Life Balance
No matter how stressful or demanding it is to work in your company, your employees can eventually adapt and reach satisfaction. However, if a job role inherently has a bad work-life balance, your employees will never get used to it.
Long work hours may be profitable to your business in the short term, but you may lose more money by losing employees. This is especially the case for jobs that have a progressive skill level. You need to invest in new employees to train them, and they don’t make you much money in their first few months.
Those that have worked for you long enough to develop their skills make you significantly more money, but if they leave, you have to replace them with new employees. If you add the amount you invest in new employees and the profits an experienced employee makes for you, you have the amount you lose every time an employee leaves. Isn’t it better to invest in existing employees by improving their work-life balance than training new ones?
2- Poor Management
Management plays a crucial role in employee satisfaction. However, a lot more goes into effective management than many companies realize.
First, people in executive positions must have a management style that fits the culture at your company. Executives can naturally have a specific management style, or they may train themselves to adopt traits from a certain manager they have worked with. In most workplaces today, modern management styles, such as the transformational management style, work better than traditional authoritative management styles.
The consistency of the management style also plays a significant role in employee satisfaction and retention. Even if an executive’s management style is unfamiliar to an employee, they can evolve and make peace with it. However, employees need to know what to expect from the management in different situations. An unpredictable executive with an inconsistent management style can be highly disturbing to the team.
The third characteristic of an executive that affects employee retention is social intelligence. A leader’s role is to inspire productive relationships among team members. Surveys show that people with friends at the workplace are significantly more likely to reject job offers from other companies. It takes an executive with high social intelligence to inspire employees to bond.
If you’re looking for a new executive who’s a good fit for your company and can help you retain employees, you probably won’t find one on job boards. We recommend getting in touch with an executive search firm instead. 80% of the candidates in Whitham Group’s database don’t have their resumes on job boards. The finest executives realize the role of executive recruitment agencies in finding them the right companies.
3- Lack of Company Culture
Many startups and small businesses lack any strategies to establish a company culture. It becomes increasingly important as your workforce grows.
Two common problems with company culture are increasing employee turnover rates. First is a complete lack of values and beliefs. An organization is more than just a building, the employees, and a set of legal documents. As Yuval Noah Harari points out in his book Sapiens, all organizations, from governments to paper companies, are sets of beliefs that people hold.
There’s no physical thing that you can point to and say, “That’s Google.” Organizations don’t exist in objective reality; they exist in what Harari calls inter-subjective reality. The stronger your company’s values and beliefs are, the more meaningful it is for your employees to be a part of it.
The second and perhaps more impactful problem is inconsistencies in company culture. If your company values a good work-life balance on paper, but employees often have to work past their shift without overtime pay, it breaks down the brand story you’re trying to tell. Employees no longer find satisfaction in their work and are more likely to switch jobs.
4- Poor Recruitment Strategies
Poor recruitment encompasses all causes of high employee turnover. Poor recruitment of managers leads to poor management and policies inconsistent with the company culture. Recruiting unprofessional employees in sensitive roles also makes work harder for other employees, worsening the work-life balance. You can also use an executive search firm to hire people that would better fit the current state of your company.
The team of renewable energy recruiters at Whitham Group specializes in finding the most suitable candidates for your company. They’re also a leading executive search firm that can help you find the right leaders to improve employee retention in your company.
Want to increase your employee retention with professional executive recruiters? Contact them now!