5 ways to reduce employee turnover
A shortage of skilled workers is making it harder for companies to hire or retain employees, according to global research by staffing firm Robert Half International.
In the US and the UK, switching jobs is very much on workers’ minds. Up to 49% of workers in the UK and 42% of US workers said they are somewhat or very likely to look for a new job in the next 12 months, according to Robert Half surveys. CFOs in the US were equally concerned about employee turnover (45%).
Most of the US CFOs’ companies try to keep employees from quitting. About three-fourths regularly check to make sure employees are happy in their roles (75%) or evaluate performance and discuss career development (73%), the CFOs said, and 67% regularly benchmark compensation and benefits to stay competitive.
But those retention efforts may not be enough, especially for entry-level employees, a group with the highest turnover.
With a US unemployment rate of 4.3% and US unemployment for accountants and finance professionals at 2.3%, “this is arguably the strongest candidate-driven market in 40 years,” said Ky Kingsley, vice president of Robert Half Finance & Accounting in North America.
Many accountants and finance professionals looking for a job in the US have two to three offers to consider and can expect counteroffers, Kingsley said.
Unemployment in the UK has dropped to 4.6% in the period from February to April 2017, the lowest since 1975, according to the UK Office for National Statistics.
The most important reason for workers to switch jobs was inadequate salary and benefits (39%), the Robert Half survey suggested. Only 23% of CFOs considered pay and benefits a top cause for employee turnover.
The outlook in Asia and Australia
Awareness of salaries as an incentive is higher amongst CFOs in Singapore, especially in financial services. Nearly three-fourths (73%) of CFOs in the financial services industry in Singapore plan to give pay rises to all their employees or their top performers.
The continuing war for talent in the sector also has finance leaders in Singapore embracing non-monetary rewards to attract and retain skilled employees. Half plan to offer more workplace flexibility, 45% provide professional development opportunities, and 44% are implementing recognition and rewards programs.
Promptness may be key to attracting talented new hires, too. In Australia, 63% of jobseekers will lose interest in an offer if prospective employers don’t inform them about their status within two weeks.
Ties that bind
DomainTools has been able to keep turnover very low despite fierce competition for skilled professionals, said Kirsten Duke, CPA, CGMA, the company’s vice president of finance and human resources. The Seattle technology company, which employs 61 people, is in a metropolitan area with an unemployment rate of 3.4%, and its employees could leave for jobs at companies that pay considerably more, Duke said.
To stay competitive in its industry, DomainTools gathers data on employee benefits and pay from multiple sources, and heads of the company’s functional groups stay in close communication.
“Compensation and benefits is one of those basic things that you have to ensure you’re paying on market,” Duke said. “People leave for higher pay, but I also believe higher pay doesn’t keep people.”
DomainTools’ strongest employee retention strategies are a very careful hiring process, flexibility in how and where employees work, and continued efforts to help new and existing employees form and maintain personal connections with their managers and co-workers.
Personal connections at DomainTools are fostered, for example, during an annual volunteer day, which brings employees from across the company together. The company also organises an annual four-day retreat where employees and their families get to know each other better. Also, managers are trained to establish a trusting dialogue about career opportunities that work for individual employees.
Personal connections between a company’s leadership and its employees are just as vital, said Gordon Barrie, ACMA, CGMA, an executive coach and consultant in the UK.
Executives need to make themselves available and engage with employees, especially with high performers who have leadership potential, Barrie said. “Ensure benefits and pay are at the right level. Also, lots of dialogue about career and listening to what they need rather than cascading a plan. If you cover these two areas, that’s the main thing.”
Ensuring retention efforts work
To ensure that a happy workforce remains happy and employees aren’t lured away by a higher-paying competitor, Robert Half recommended companies consider these five tips:
Gauge job satisfaction. Don’t presume all is well. Ask people what they think about their work, such as how interesting or challenging they find it. Regular one-on-one meetings are effective, but for brutally honest feedback, such as worker happiness with management, consider conducting an anonymous survey.
Increase salaries. If it’s been some time since you’ve evaluated your company’s compensation structure, benchmark current employee wages against professional salary guides. Strive to offer above-average compensation for your city and industry.
Leverage bonuses. Financial incentives are one way to retain highly skilled team members, especially if your company is undergoing a major change like a merger or acquisition. In addition to merit-based rewards, look for opportunities to award spot bonuses following key projects or periods of extraordinary performance.
Help employees recharge. Even well-compensated staff are more likely to quit if they’re continually stressed and overworked. Increase the chances of keeping staff by allowing them flextime, remote work, on-site amenities, and generous paid time off.
Show employees in-house growth prospects. If employees don’t see an obvious path upward within the company, they’ll make their own way – out the door. Keep today’s top performers and tomorrow’s leaders motivated by regular discussions about in-house growth prospects as well as the company’s willingness to invest in their future.
—Sabine Vollmer (Sabine.Vollmer@aicpa-cima.com) is a CGMA Magazine senior editor.