How to Lower Employee Turnover Rate

A high employee turnover rate is a serious problem for businesses. When an employee quits, the employer must exhaust time, energy and resources to find and recruit a replacement. And once a replacement has been recruited, the employer must train that new employee. To put the problem of employee turnover into perspective, statistics show that it costs employers about 200 percent of an employee's annual salary to replace that employee. For an employee earning $50,000 per year, that's $100,000. There are ways to lower employee turnover rate in your business, however, including the following.

Employee Recognition

Don't underestimate the impact of employee recognition, or lack thereof, on your business's employee turnover rate. Many employers neglect to recognize their hardworking employees, only to discover that their employees quit to find employment elsewhere. Whether it's a verbal "Thanks for the hard work" or a personalized email, you should recognize and thank your business's hardworking employees for everything they do.

Performance-Based Rewards

Another tip to keep your business's employee turnover rate in check is to offer performance-based rewards. What does this mean exactly? Well, performance-based rewards are incentives given to employees based on their performance. You can use a multi-tiered reward system, for example, in which employees receive a bonus for every 500, 1,000 or 1,500 products they sell in a month. This encourages employees to put their best foot forward while lowering your business's employee turnover rate in the process.

Hire the Right Employees

Of course, it's essential that you hire the right employees. If an employee lacks the skills, experience and other qualifications for a particular job, hiring him or her only increases the risk of a turnover. That employee may feel under-skilled for the job -- and that's because he or she is. And if the employee feels under-skilled, there's a good chance that he or she will quit. Therefore, you should invest the necessary time and energy into finding the right talent for open jobs.

Create a Positive Workplace

Finally, you should create a positive workplace in which employees enjoy working. Negativity in the workplace can lower workers' productivity, increase the risk of conflicts, turnovers and more. To prevent this from happening with your business, focus on creating a positive workplace. This means encouraging and motivating employees to perform with positive reinforcement as opposed to threats of demotion. Additionally, make sure employees are provided the appropriate personal protective equipment (PPE). Failure to provide employees with PPE instills a negative attitude while increasing the risk of work-related injury and illness in the process.