Are Your Turnover Rates Hurting Your Cost Containment Strategy?
If you’re like the majority of organizations today, you’ve developed a cost containment strategy with the goal of increasing productivity while reducing costs. Achieving greater productivity starts with optimizing your workforce – the drivers of productivity. But what happens when your workers leave?
A high turnover rate not only creates costs associated with finding new hires, but it can also affect your organization in ways that are not so easy to quantify: productivity, morale and innovation can all be affected by turnover rates. While some turnover is regular and expected in any industry, with an estimated cost of 16% to 213% of the salary for each employee that leaves, high turnover rates can’t be ignored when developing and implementing a cost containment strategy.
Is your organization looking to increase cost savings? Then take a proactive approach to improving your organization’s retention rate. Keep reading for three ways to optimize your workforce and achieve sustainable cost savings.
3 ways to improve turnover rates and contain costs
1. Evaluate your labor needs
Workforces are not one size fits all. Start with an in-depth analysis of your current production levels and processes to identify workforce gaps. Set defined objectives and goals and establish a realistic implementation timeline for new strategies to measure your success. Then, harness the power of workforce data to measure the ROI of your changes. With an optimized workforce management model, your turnover rates will decrease resulting in increased cost savings.
2. Hire smarter
According to the Wall Street Journal, the first step to reducing your turnover rate is hiring the best candidate for the role. Take the time to draft an appealing (and honest) job description of the position and its benefits. Careful consideration of each candidates’ skill set and cultural alignment coupled with a mindful vetting process will ensure you find the right fit. Remember that each employee is an investment in your organization; few (if any) employees are going to be a perfect cultural and skill-level match from the start. Look for candidates who, given time and proper training, have the potential to develop into skilled team members.
3. Stay competitive
Finding talent is difficult; keep your employees invested in their position by offering more than a paycheck. Non-monetary benefits like company culture, development opportunities, tuition reimbursement programs and flexible hours are important to candidates. To attract and retain top talent, you need to offer them something they can’t get somewhere else.
Managing turnover rates is an essential component of any successful cost containment strategy. Next, ensure you’re getting the most ROI by evaluating your workforce management model to confirm that it enables you to meet your organization’s goals and priorities.