Employee turnover is a fact of being in business. According to the U.S. Bureau of Labor Statistics (BLS), more than 47 million Americans voluntarily quit their jobs in 2021. Two years later, many businesses are still struggling to fill open positions. The national unemployment numbers since 2019 have ranged from a high of 14.7% in April 2020 to a low of 3.4% in January 2023.

When evaluating employee retention, a good place to start is employee turnover. That’s the percentage of employees who leave your organization during a specified period. Typically, you want to assess turnover on a quarterly, semi-annual, and annual basis. With dramatic shifts due to COVID and the “great resignation,” consider looking at multiple time periods when calculating your workplace turnover.

Turnover and Tenure

According to Oracle NetSuite, on average, an employer will experience 18% turnover for its workforce each year. About a third of that number is likely due to a reduction in force or termination due to poor performance. Voluntary turnover averages 13% annually. The BLS said in 2022 that the median number of years for employees in 2020-2022 was 4.1 years. For men, it was 4.3 years, and for women, 3.9 years. Twenty-eight percent of men had 10 years or more of tenure with their current employers in January 2022, as compared to 26% of women. Keep these trends in mind when reviewing your own turnover rates.

Effective Retention Strategies

What can you do to keep your best talent, avoid costly disruptions in productivity, and reduce employee turnover? Here are five tips to help increase retention in 2023 and beyond.

1: Create a Positive Company Culture

According to a recent survey by Robert Half, more than one-third of workers would pass on the perfect job if the company did not offer a positive culture.

A strong company culture contributes to recruitment efforts and improves overall retention. It also increases employee loyalty, job satisfaction, work performance, and employee morale.

One strategy is creating an environment where your workers feel safe and included – regardless of their ages, ethnicity, religious beliefs, and sexual orientation or gender identity. A zero-tolerance policy toward bullying and harassment can ensure safety for all. Also, look at your leadership team. Does its composition reflect a broad array of employees? If not, maybe it’s time to review your recruitment and promotion policy. Beyond that, do you offer onsite or online training for employees? Workers want to feel supported, and training that ties in with your annual performance review program helps.

2: Recognize Employee Contributions

Employees want to feel valued but recognition must be genuine. It doesn’t matter whether they’re on-site, remote, or working in a hybrid environment. A 2022 Gallup/Workhuman survey found more than half of employees said the recognition received at work is not authentic (53%) or equitable (52%). That’s a significant number that’s not as widely discussed. It’s worth keeping in mind when you’re looking for ways to highlight employee contributions. That could prompt them to actively look or watch for new employment opportunities. Forty percent said they were not receiving enough recognition from their organization leaders.

What does employee recognition look like day-to-day?

Manager to direct report: Encourage your managers to recognize their direct reports and call out positive contributions in a clear and specific way. Empowering your managers to provide awards (company swag, gift cards, etc.) for those contributions provides a tangible benefit that employees can appreciate.

Employee to employee: A program for employees to nominate peers for recognition encourages staff at all levels to get involved. It’s also a way to encourage employees to identify positive actions and emulate them.

Corporate recognition: Systematic recognition at a company-wide level outside the standard performance review process is also relatively easy to implement. This could include a monetary reward or gift as well as acknowledgment at company meetings or events.

3: Offer Flexible Work Options

Work flexibility and work/life balance have become more important than ever. COVID-19 caused many organizations to shift to remote and hybrid work — some for the long term. According to the MetLife 21st Annual U.S. Employee Benefit Trends Study released in March 2023, nearly one-fifth of employees rank flexibility high among things employers can offer that reflects their care for employees.

Consider a remote work environment or flexible work hours. Maybe some employees can start their workday earlier and end earlier. All employees are able to get in their 20-, 30-, or 40 hours each week, but not everyone is on-site or online during the same hours. Another option is a compressed work week, with employees working their hours in fewer days. The end goal is fostering a work/life balance.

4: Review Compensation and Benefits

We’re in a competitive talent marketplace. That means it’s critical you periodically review your compensation and employee benefits programs. No matter how much employees like their jobs, they may be tempted to leave for better pay or benefits. Review your hourly wages or monthly salaries regularly to make sure you’re staying competitive.

Employees also appreciate a benefits program that allows them to decide what benefits they want. With a multi-carrier exchange like CaliforniaChoice, employees get to choose from 130+ HMO, PPO, EPO, and HSA-qualified options across all four Affordable Care Act metal tiers. Coverage is available from Anthem Blue Cross; Cigna + Oscar; Health Net; Kaiser Permanente; Sharp Health Plan; Sutter Health Plus; UnitedHealthcare; and Western Health Advantage. Plus, there are options for Dental, Vision, Chiropractic & Acupuncture, and Life and A&D.

5: Offer Career Development Paths

Oracle NetSuite says the number one reason employees leave is a lack of growth and development opportunities. Most employees said they would stay if their employer offered opportunities to learn and grow. Employers that offer more training have 53% less attrition. Encourage your managers to connect with employees to discuss what they want in their careers – and how your company can help them get there.

Consider a mentorship program to help your new hires adjust to their roles or to help veteran staff view things from a different perspective.

Individually or collectively, these strategies can help reduce your employee turnover and improve morale, so it’s worth taking the time to determine which of these are right for your organization.