Bet your bottom dollar—low turnover is good for business

Paul Tiedt | Jul 10, 2018 Paul Tiedt 07/10/18

Good news for the economy: unemployment is down. Bad news for companies: turnover is up. Many individuals in the workforce now have the luxury of being particular about what jobs they take (and keep), prompting more competition in labor. This is especially true for the more qualified, high-quality employees—the ones you’re hoping to have on your team for a long time.

Lengthier tenures have a long list of financial benefits—obvious things like lower recruitment and training costs—but the biggest payoff lies in how long-term employees affect the customer experience. Employee engagement has been linked to increased sales performance. Why? Because happy employees mean happy customers.

But you can’t just close your eyes and wish for more engaged employees. Driving engagement is a process that requires a proactive approach, continuous attention, and thoughtful action. Here are a few of those steps:

Create clarity by aligning expectations from the start

Right out of the gate, establish clear and effective communication with your employees. Make sure each person understands what is expected of them, take prompt action when these expectations aren’t met, and continue to monitor and evolve these expectations over the course of the employee’s tenure.

When a fast-casual restaurant client saw turnover was trending up, they discovered a misalignment between employees’ job expectations and reality. Employee feedback revealed disappointment with compensation, a lack of creative fulfillment, and too demanding a schedule.

The brand decided to take immediate action on these items by increasing pay and providing full transparency of the day-to-day tasks. The results were staggering with a 14 percentage point increase in Intent to Remain Employed and a 13 percentage point decrease in turnover.

Use employee data to pinpoint opportunities + take action

When a client wanted to improve employee satisfaction and reduce turnover, they turned to their employee surveys for insight. They determined specific measures that had the most positive and negative impact on turnover, then compared the locations with the lowest and highest turnover rates. They discovered that follow-through from their employee surveys had a significant impact on turnover—locations where feedback was addressed and improved had turnover 14 percentage points lower than locations with the lowest follow through.

With that insight, they were able to implement these 3 steps across the brand:

  • Identify locations most at-risk for turnover
  • Create a report based on follow-through scores + key driver scores
  • Require all locations review employee survey results with their staff

Employee engagement helps you uncover the soul of your organization, inspire productivity, and help employees reach their full potential. Don’t ask for their feedback if you don’t intend to act on it. Real change comes from action.

Measure engagement at every touchpoint

It’s hard to move the needle on any metric if teams are turning over before strategies can take hold. Our webinar Lower turnover + higher retention = better business shows how SMG helps HR teams tackle the turnover challenge by gaining insights on each stage of the employee lifecycle—from the first interview to the last day.

Watch this 20-minute webinar to:

  • Understand why employees leave + how to keep them engaged
  • Learn 4 proven ways to reduce turnover in your organization
  • Dive deeper into the link between turnover, customer satisfaction, + financial results

Paul Tiedt | VP, Client Insights

Customer Experience Update