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Business scenario: Dealing with high employee turnover

May 17, 2017

This post is part of our Business Scenario series. Read the entire series here on the Clover blog, and check back for more tips and tactics.

Do employees leave at dizzying rates? Is turnover straining the business?

With nearly half of hourly employees resigning each year and replacement costs exceeding $5,000 each, the impact can be painful. Service industry employers report that maintaining a stable, high-quality staff is one of their biggest challenges.

While some employee turnover is inevitable, business owners can slow the revolving door by rooting out underlying issues that contribute to the flow. Fixing problems—and scaling up practices that keep people in place—can help improve service, reduce expenses and headaches, and free up time.

Here are a few ideas for boosting retention:

Spot trends in turnover rates.

High turnover is the norm in many restaurants and shops, particularly when they rely on part-time and seasonal workers. But is turnover actually increasing?

Changes in patterns can signal that there’s a problem: onerous scheduling policies, less-than-competitive pay, toxic coworkers, suboptimal working conditions, lack of career paths, or even conflicts with the boss.

Ignoring the problem will only make it worse. One way to uncover hidden issues is to sit down with employees before they depart and find out what’s happening.

Gather honest feedback with exit interviews.

Exit interviews are often used by large companies to diagnose problems. But in small businesses, where everyone knows each other, people are often reluctant to hurt feelings or jeopardize future recommendations.

But conducting interviews doesn’t have to be uncomfortable. Interviewers should aim to break past this natural guardedness and draw out candid information about what’s working, what’s not, and what changes will improve the work environment.

The online career site Monster.com suggests starting the interview with a subtle variation on the “why are you leaving” question. Instead, ask employees what triggered them to start looking for another job. Follow up face-to-face interviews with a short survey (online, email, or paper), which can prompt people to share even more.

Check out these sample exit interview questions that will get employees talking freely.

Hire people who are more likely to stay.

Hourly employees have a powerful impact on businesses, just like salaried workers. They make the difference between an exceptional customer experience and a so-so one. That’s why it is important to get reliable people on board for the long haul.

How did you find the most successful employees? Did you use an online recruiting tool, a sign in your establishment, word of mouth, or maybe a Facebook notice to followers? Try to figure out which strategy brought the best results.

Keep digging for clues about what works. For instance, if college students make up a portion of the workforce, who tends to leave and who stays? More mature upperclassmen can seem preferable to freshman, but older students also have one foot out the door. Freshman, on the other hand, may be more willing to devote years to a part-time job—serious longevity in the retail or restaurant space.

Create a great working environment.

Nothing attracts and keeps employees like a positive workplace. Millennials, in particular—who make up one in three workers and flood the ranks of hourly, part-time staff—enjoy having control over their schedules, receiving meaningful training opportunities, and feeling like valuable contributors on a team.

Learn how an adventure-tourism business in Colorado keeps its young staff of seasonal workers coming back summer after summer by offering management opportunities, paying for training, tapping their expertise, and giving them new duties to master.

Offer pathways to advancement.

As the economy slowly improves, workers are less resigned to stay in dead-end jobs and more apt to seek out better options, including at larger companies. According to Gallup, 51% of workers are actively looking for a new job. In another survey, the main cause driving them away was lack of advancement.

To combat the challenge of high turnover, nearly 40% of small business owners are investing in training and employee development. Like the Colorado adventure company, they’re grooming employees for new positions, giving them new assignments that expand their expertise, sending them for outside training, and finding ways to make sure people feel valued and rewarded.

The path to loyalty can follow many routes. But opportunities to grow and advance are the single most important thing a business owner can give their employees, even part-time hourly staff.

[image: Employees Only Singapore by Edsel Little on flickr]