6 ways to reduce employee turnover

6 ways to reduce employee turnover
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Employee turnover refers to the rate at which employees leave a company within a set period. If you find that employees are leaving your company at an alarming rate, there is likely an issue within your organization. It might have to do with your company culture, incentives, management, or something else entirely. Employee turnover can be devastating to a company or organization of any size and in any industry.

At any business, some amount of employee turnover is to be expected. You can build a highly successful organization, and some employees will still be lured away by other opportunities or companies. Also, you can expect that employees may decide to stop working at your company due to a major life change, such as moving to another country, or a pivot in their career path that leads to them switching industries.

However, these situations can also arise because employees might not feel valued or feel like the work environment doesn’t fit their values anymore. If too many employees leave a company, then that company may have a severe employee turnover problem.

So, what steps can be taken to retain employees and keep them interested in working for your organization? 

Encourage your employees

If we are going to talk about employee turnover, we have to speak about the employee’s need and desire to feel valued. No one wants to work at a company where they feel like their accomplishments are always being downplayed. Employees want to work in an environment where they can be productive and be recognized for that productivity.

That doesn’t mean you are expected to throw a lavish party every time your team achieves its goals, but some recognition and praise can go a long way. Of course, you should also be rewarding critical employees with more tangible benefits like raises or paid time off. The right encouragement can go a long way towards reducing employee turnover in the long run.

Offer the right incentives

There are many situations where a company might not be able to understand their employee turnover problem, but there are other cases where it’s a bit more simple. If your company is not offering the going rate for compensation and benefits in your industry, you shouldn’t be asking why your employees are leaving, but leaders and HR professionals should be asking why they aren’t offering more incentives.

Great incentive ideas to help reduce employee turnover

Some businesses can lure in talent thanks to additional perks, such as healthcare and dental, free meals, onsite gyms, or offering free childcare. Overall, your company should be making sure that you are rewarding your employees with as many incentives as possible to ensure they feel rewarded and appreciated. A compliment and a pat on the back can feel great to an employee, but some real incentives can make them feel better about themselves, their career, and their professional and financial future.

Hire more people instead of overworking your existing staff

Many businesses don’t understand the importance of hiring enough people. While a company is scaling, it should be actively hiring to fulfill the new necessary roles. Some leaders may cut costs by avoiding hiring and simply ensuring that their employees work harder and longer, damaging employee morale and company culture in the process.

Let’s say that you are the leader at a company where three people have recently left. Instead of hiring people to fill their roles, you have decided to split their responsibilities among existing employees. These employees may eventually suffer from burnout after taking on these new duties as well as their own, and it can even possibly lead them to leave the industry altogether. In this situation, replacing these employees will only cost more money when you could have hired new employees in the first place.

If you hire enough people, then your existing employees won’t be overworked. This can help solve the employee turnover cycle that will only continue if you try to avoid hiring enough people for your company’s roles.

While there’s nothing wrong with introducing some new responsibilities to an employee, leaders should ensure that their employees are never too overworked or overwhelmed. Existing employees can even help companies hire new talent through employee referral programs.

Don’t be afraid to fire employees when necessary

There’s a good chance that your business or organization will end up hiring people that don’t really fit there. It might be their personality, or they may not be as interested or passionate about their role as you had anticipated. There might also be personality differences or productivity issues that you did not foresee, or were not obvious previously.

There will be some situations where you hire an employee only to find out that they are toxic. They might add to workplace negativity or simply lack work ethic compared to their colleagues. Their comments may hurt other employees, or their lack of motivation might send the wrong message to clients or customers. If you aren’t seeing any improvement in this person and their work, it may be time to let them go.  While it might seem brutal, it will likely be a decision that you do not regret.

When we are talking about employee turnover, we have to recognize that some individuals simply do not share the same values as the rest of the employees. When it is clear that it is time to let an employee go, it is best to make the decision quickly and efficiently. 

Company culture is crucial

One of the biggest mistakes that organizations make is hiring folks who ultimately don’t fit their company culture. Will these employees add value to your company with the right skill sets, values, and traits, or will there eventually be a time where it is clear that they aren’t as productive because they don’t “fit in” to the company?

Even one negative employee can significantly affect employee morale at a company, so making sure that employees contribute something to the organization is crucial. If you hire someone that fits more within your company culture, there’s a good chance that they will be more productive than employees who do not fit as well. If your organization is known for positive company culture, it makes it much easier to attract the top talent in your industry.

One way you can ensure that you are recruiting the right people is to offer job simulations to make sure that they are qualified. These simulations may reveal more than just technical skills. They can show you how a candidate makes decisions, whether they are emotionally intelligent, and how they perform under pressure. These simulations can offer insight into where the candidate stands concerning your organization’s values and core principles.

Flexibility is key

The entire concept of “work” has changed since the global COVID-19 pandemic. Millions of people had to learn how to work from home. Many of them started appreciating that they can remain productive without worrying about the time and money involved in a commute to the office. For those downplaying the rise of remote work, consider that somewhere around 40% of employees would consider quitting if it meant a full-time return to the office.

If you have taken the time and effort to hire the best employees possible, it might be time to make some concessions and compromises. You might be able to suggest that employees come in one or two days a week, where face-to-face meetings may be more necessary. If your employee wants more flexible hours, it could be time to let them work more on their terms. It may even lead to increased productivity.

Of course, this doesn’t mean that you have to give in to all employee demands. However, it is essential to note that for some employees, flexibility matters more than salary. As a result, it just might be the case that offering some flexibility can reduce employee turnover dramatically. This is especially true for younger employees, including millennials and Gen Z workers.


All industries and sectors are affected by turnover at some point, whether it is based on market trends, commodity prices, or overall business trends that are affecting revenue or reputation. Every founder wants to believe that none of their employees are thinking about leaving because they are focused and motivated at their role, but countless factors can lead to someone deciding to pursue other opportunities or roles elsewhere. While there’s no surefire way to ensure that your employees don’t leave your company, these strategies will help you in your quest to reduce turnover.

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