Businesses that incorporate continuous performance management enjoy lower levels of turnover by prioritising these key practices
High turnover has been a hot topic in talent management and HR circles for years. When turnover is low, companies benefit from improved morale and lower costs. Generally, the more complex and higher level the job role, the higher the cost of turnover. Such costs can equal one month to several years’ salary when an employee jumps ship. It is easy to see how these numbers can stack up and severely impact a company’s bottom line.
Today, businesses are beginning to beat the brunt of high employee turnover by becoming more agile. Agility — the ability to rapidly respond to changes in the environment — has been said to be critical to modern business success. With the characteristics of the average agile organisation in mind, modern businesses are doing the following to retain their top talent and promote engaged employees.
1. Giving Employees Control over Their SMART Objectives
Autonomy and independence are key to continuous performance management and agile organisations. These organisations understand how important this autonomy is in relation to goal setting, as employees who have more of a say in how, where and when they work are more engaged. People are also much more likely to accomplish goals when setting goals themselves.
Companies who value agility are putting more power in the hands of their employees. This gives them ownership over their objectives and makes them feel like a valued member of the team. As a result, team members enjoy a sense of belonging that makes them less inclined to want to leave for a competitor.
2. Encouraging Social Connections
Having friendly relationships at work isn’t just fun — it’s beneficial to productivity and can help to minimise turnover in the long run. Psychologists will attest to the fact that human beings are sociable creatures who require a certain level of social connection in order to thrive and perform optimally.
According to one survey, two-thirds of people who had an “office spouse” said the relationship contributed to their happiness at work. Gallup has also shown how important it is to office morale to have a best friend at the company. This is why many companies encourage water cooler conversations or provide opportunities for company outings.
3. Introducing Flexible Working Measures
It has been shown time and again that when a company is more flexible, it can encourage employee loyalty. You only need to consider the logistics to understand why — an employee who is frustrated by a long commute might be able to work remotely rather than look for work elsewhere. A parent who has to be at home by early afternoon might be more inclined to keep their job if they had the possibility of job sharing. Maybe another employee who needs to juggle external commitments would greatly appreciate flexi-working. Not all flexible working options will work for every business, but it is certainly an area where businesses can alter processes to retain valued employees.
4. Providing Ongoing Training
Training begins as soon as an employee is recruited, and it can make a huge difference to employee turnover. Research by the Aberdeen Group found that a successful onboarding program can improve retention rates by 50%. While another study suggests that 40% of employees who receive poor training leave their positions in the first year. Employees need to feel confident and capable in their roles, and training is the only way to provide this. Individuals who feel in over their heads will likely leave for a company where they feel more at ease and able to grow.
5. Reinventing Feedback Culture and Introducing Regular Performance Discussions
Regular and frequent performance discussions are at the heart of agile performance management — single, yearly performance discussions are no longer proving to be constructive in such a rapidly changing business environment. Companies who have introduced regular check-ins have noticed a clear reduction in voluntary turnover. One clear case being that of Adobe, who abandoned yearly appraisals in 2012 and saw their voluntary turnover decrease by 30%.
Regular performance discussions give employees the opportunity to deliver feedback and ask questions. They also give managers the opportunity to encourage, get updated on progress and give recognition. Importantly, it allows a relationship to develop between manager and employee, which is crucial as this relationship has a huge bearing on employee engagement levels.
6. Using Performance Management Software
Keeping track of employee objectives, progress and training can be difficult, particularly as your organisation grows and becomes more complex. As such, companies are making use of continuous performance management software to better enable agile processes and to engage employees, ensuring they remain onboard and are as productive as possible.
Clear Review has helped companies develop stronger, better performing teams all over the world — to find out how we can help you reduce your turnover and boost productivity, get in touch with the Clear Review team today.