High Employee Turnover Even Though You Pay Well? 2 Mistakes You May Be Making & How To Fix Them Quickly And Easily
If you have a problem with employee retention, then you may wonder what you are doing wrong to run employees away. The truth is that as long as you provide employees with a fairly competitive wage and a generally positive work environment, they likely aren't leaving due to the workplace environment. While the unemployment rate is not as low as recent years, it is still at a point where good jobs with decent pay are coveted by many workers. So, what are you doing wrong? Read on to find out what may be causing that constant employee turnover and how to ensure the next employees you hire stick around.
Why This High Turnover is Damaging Your Business
High employee turnover is not only an annoyance, but it can, and possibly already has, damaged your business greatly. Your long-term employees have likely seen an extreme deterioration of workplace morale, and many are likely tired of training and helping out new employees who simply don't stick around. Customers can become tired of never speaking to the same salesperson twice, and they often wonder whether this turnover is caused by employees being treated badly. I
t also costs you money, because paying employees during training does not help you meet your bottom line, and you are doing it over and over again. If you make a product, then quality has likely even declined. You need to end the cycle before it damages your business even further by avoiding hiring mistakes.
Mistake #1: Relying on a Temp Agency to Fill Your Roles
When employees are constantly coming and going, it can be all-to-easy to decide to let a temporary staffing agency fill your positions, so you can focus on your many other duties as a business manager or owner. While you must compensate the agencies when they fill your positions, if you are using their services, then you are likely at a point where the time the agency saves you seems worth the premium employee-placement price tag.
There are several reasons that attempting to fulfill permanent positions at your company by using one of these agencies is not the best idea. First, you have no control over their employee screening process. Sure, they run criminal background checks to make sure they don't send you convicted felons currently on probation, may check a few employee references or contact a past employer or two, but they often don't screen employees too comprehensively.
Second, they take such a large fee for each hour worked by the employee you hire until the end of your contract with them, which is typically 90 days, that the actual employee doesn't get paid that competitive starting wage that you offer employees you hire directly.
Another problem when hiring through temporary staffing agencies is that many candidates really do just want temporary jobs and not permanent ones (whether they are upfront about it to the agency or not), and they are just looking for a place to work for a few months while waiting for their resumes to catch the eyes of those other companies that will hire them directly at a higher wage. By cutting out the temp agencies, you can improve your employee retention while saving a good deal of cash.
Mistake #2: Screening Employees Yourself Less Comprehensively Than You Should
If you currently do your own hiring or have now vowed to start on your own now that you know the downsides of having a temporary agency sending you new employees, then you want to look out for vital mistakes you may be making, or will make, when choosing your new employees. You have to go about the screening process a bit differently than a company who does not have employee retention problems, because you need to stop the current cycle of employees coming and going.
To stop this endless cycle and get your company back on track, you need to make your hiring standards very strict for a while.
Choose only new employees who:
- Have no recent record of job-hopping. It can be all-too-easy to think that that employee who has never stuck around long at recent jobs, but you like in other ways, will stick around after they realize what a great company you run. You can't afford to take this risk right now. Look for employees who are leaving jobs they have held for at least three to five years and can give you a good reason why they are leaving.
- Have decent credit. Screening employees based on their credit reports is a bit controversial today, but there is a reason that these reports are considered by 47-percent of successful companies, many outside of the financial sector. Don't just judge an employee by their credit score, but instead look into the details of the report to get an idea of an employee's reliability and general ability to follow through with commitments. While a large hospital bill a person was unable to pay is excusable, patterns of general financial irresponsibility can signal that an employee is not reliable.
- Show initiative throughout the hiring process. When you need new employees badly, it can be too-easy to hire what seems like a great candidate on-the-spot. Instead, give the candidate that task of calling you a few days after their final interview (give them a day and a general time) to see if they will be awarded the position. If they don't call, then that seemingly enthusiastic candidate is showing you that they really didn't want the job and likely wouldn't have stuck around long.
If this seems like a large endeavor to getting new dedicated employees who are really looking for a company to work for long-term, then the truth is that it will take time and effort on your part that you may not have. However, you can do it the easy (and quicker) way by having an employment screening company like PeopleFacts perform all of the credit checks, background checks, and drug screenings you need, and they can also look into an employee's job history, contact past employers and references for you.
You can choose a company that will simply run all of the checks themselves then just provide you with the data to then evaluate on your own, or, to make it easier, choose one that will take all of your hiring criteria into account (including the above tips) and provide final reports on whether a candidate passes your designated hiring criteria or not. You then just have to perform the interview process and follow-up. You can then work on getting long-term employees into your company and breaking the endless employee turnover cycle.