As January labor reports rolled in, payroll provider ADP showed a 32% decline in private payroll growth. CNBC reports that companies added 107,000 workers in the first month of 2024, “off from the downwardly revised 158,000 in December.”

Those mid-size businesses (between 50-499 employees) led job creation with 61,000. Small businesses added just 25,000.

In this ever-evolving business landscape, there are things over which we have little control as business owners. Inflation is the big one hitting small business owners especially hard.

While it can be frustrating, let’s look at what we can control and focus our energy and resources there.

When it comes to employee turnover, a factor profoundly impacting businesses across all industries, we do have the ability to take charge.

Understanding why employees leave can be the key to fortifying your workforce and ensuring sustained growth.

The why often uncovers the solution and allows us as business owners to put things in place that address those points before they become issues.

A key tool and metric for businesses to track is their employee turnover rate. A high turnover rate can cost a business thousands, if not millions, of dollars and impact morale and productivity.

Watch the video below to learn more about this and how to calculate your turnover rate.

The reasons for the recent surge in employee departures are diverse, spanning from a quest for better work-life balance to the pursuit of passion and career change.

According to a Hubspot Marketing poll of 500 professionals, here are some critical factors contributing to the high turnover rates:

Work-Life Balance (41%): Striking a balance between professional and personal life is a significant concern.
Lack of Flexible Schedules (37%): Employees value the freedom to tailor their work hours to better align with their lives.
Career Change (29.9%): Individuals seeking new paths or chasing their passions contribute to turnover.

Since 2020/21, the way we think about work and purpose has shifted. Companies are having to rethink the way they hire, engage, and keep employees.

Addressing the Root Causes: Strategies for Retention

The post-pandemic mindset prioritizes time and meaning. For the business to become an "employer of choice" where employees feel that they are contributing value and meaning through their work, consider the following:

Right People in the Right Seats

When hiring, focus on character traits in addition to skills. Ensure the candidate aligns with company values and culture.

Innate Talent

Look for innate talent and a willingness to learn quickly. Seek candidates with the potential to contribute across various company departments.

Pay Well

Create a compensation package that goes beyond monetary benefits. Consider non-monetary perks and get creative to boost morale.

Orientation Matters

Revamp your onboarding process to instill a sense of company culture, values, and mission. Clarify opportunities for growth and contribution.

Consistent Performance Reviews

Regular and consistent performance reviews keep employees connected and show appreciation for their contributions.

Team Building and Focus Groups

Engage employees through regular team-building sessions and focus groups. Tap into their expertise for valuable insights.

Recognize and Reward

Regularly recognize outstanding performance through bonuses or project ownership. A sense of ownership fosters loyalty.

Set SMART Goals

Establish Specific, Measurable, Attainable, Relevant, and Time-based goals for employees. Involve them in the goal-setting process.

Streamlined Processes

Implement processes for essential business aspects to provide structure, capture issues, and empower employees with confidence.

Adequate Staffing

Maintain adequate staffing levels to avoid burnout. Communicate openly with customers about potential delays.

Professional Development

Encourage personal and professional growth through mentorship programs and internal training.

Fostering Work Friendships

Promote employee social interactions, fostering a sense of community and job satisfaction.

Equitable Pay for Performance

Ensure fair compensation for employees hitting their goals consistently, regardless of title.

What’s Next

Reducing employee turnover requires a holistic approach that addresses underlying issues.

As you ponder ways to enhance your workplace environment and culture, keep in mind the mantra, "Always do the next right thing."

This mindset ensures a win-win situation for both employees and employers, fostering an environment of loyalty and sustained growth.

Unlocking Employee Loyalty: Managing Employee Turnover