How to Reduce Employee Turnover

Most company leaders will readily admit their people are the source of their success. But employees don't always stay as long as those leaders would like. To achieve growth, customer satisfaction, creativity, and innovation, employers must consciously address how to reduce employee turnover. The employee turnover rate in January 2023 reached 3.8%.¹ Agencies monitor this knowing that high employee turnover is a costly proposition for businesses. In a plentiful applicant market, replacing staff can be lengthy and expensive. In a tight applicant market, it can have devastating effects on productivity and profit. Creating an environment where staff is engaged with the company, work, and peers can increase employee satisfaction and reduce turnover. Some established motivational models shed light on the causes of employee turnover and how to enhance the employee experience preemptively.

Herzberg’s motivation-hygiene, or dual-factor, theory

Published in the 1960s, Frederick Herzberg’s “The Motivation-Hygiene Concept and Problems of Manpower” asked employees to describe periods in their life when they were happy or unhappy at work. The interview data collected led Herzberg to conclude that 2 main factors lead to job satisfaction.

Motivators

Motivating factors include:

• Work that challenges.
• Recognition and achievement.
• Involvement in the decision-making process.
• The ability to find meaning in one’s work and personal and career growth.

These are all positive factors.

Hygiene

These "maintenance" factors include:

• Salary and benefits.
• Job security.
• Status.
• Company structure, policies, and business and management practices.

While hygiene items don’t necessarily provide job satisfaction, they tend to reduce dissatisfaction. Herzberg referred to these maintenance/hygiene factors as KITA (kick in the as*) factors, meaning they either provide incentives or threaten punishment. Under these, Herzberg created 4 categories of employees:

• High hygiene and high motivation: Employees have few complaints and are highly motivated.
• High hygiene and low motivation: Employees have few complaints, but they are not highly motivated. For them, the job is simply a means to get paid.
• Low hygiene and high motivation: Motivated employees have many complaints. They may love the work and its challenges, but the company conditions fall short.
• Low hygiene and low motivation: Non-motivated employees who have many complaints about their work environment.

Employee turnover prevention strategy

Organizations may use Herzberg’s motivation and hygiene factors to find areas for improvement. Anonymous surveys can help determine satisfaction with the hygiene aspects. Managers can then assess and assign employees to 1 of the 4 categories. Of these, only the high hygiene/motivation category could be considered low risk for turnover. The remaining areas will require employee retention efforts to increase employee engagement and keep valuable staff members.

Reduced employee turnover using the Herzberg model

Once employees have been identified and categorized under the model, employers must act. Organizations will want to identify which employees pose the highest risk for flight and address their specific needs quickly to reduce churn. To combat high turnover, employers can improve KITA issues by providing mployees such things as:

• Competitive pay and benefits.
• A stronger voice in the company.
• Programs to recognize employees and promote motivation factors that drive individual engagement and commitment.

If organizations can address both the hygiene and motivational aspects, turnover should decrease.

McClelland’s human motivation theory

David McClelland’s book “The Achieving Society,” published 1961, identified 3 motivators he believed are intrinsic to humanity. These are the needs for achievement, authority/power, and affiliation. He theorized each of us has all 3 traits, but 1 will be dominant. By identifying the dominant trait for individuals, he suggests, a business can set goals, provide feedback, and find the best way to motivate and reward.

Achievement dominance

Employees need to set and accomplish challenging goals. They make take some risks, but typically the goal setting is calculated to attain their objectives. They enjoy regular feedback on their achievements and progress but generally prefer to work alone or independently.

Affiliation dominance

These staff members want to be part of a team. They want to be liked by everyone and will typically go along with whatever the group wants. They prefer to collaborate rather than compete and don’t like high risks or uncertain outcomes.

Power or authority dominance

These are leaders who control and influence their peers. They are competitive and like to win, even arguments. They look for recognition and status.

Employee turnover prevention strategy

Once you’ve identified the dominant trait in each employee, managers can set goals, provide feedback, and dole out rewards that capitalize on the way each employee likes to be perceived. For achievement-dominant staff members, provide challenging projects that are attainable. These employees are problem solvers; they thrive when they're creating solutions. They may work best on their own but can easily be paired with other high achievers. Regarding feedback, they prefer the truth unvarnished. They look for recognition of what they’ve accomplished as well as ways to improve. For affiliation-dominant staff members, integrate them into a team if possible and provide them with low-risk work. They prefer balanced feedback but are more open to a correction that’s tempered with emphasis on their best traits. These are workers who are embarrassed being singled out, even for praise, in front of others. They want to be recognized privately if possible. Employees whose dominant trait is power work best when they’re at the helm. They thrive on competition and do well with projects and goal-oriented tasks. They are influencers and can easily convince others. These workers want direct feedback; they know their strengths and value. Keeping them engaged may require continuous challenges that include advancing their career path.

Decreasing turnover using the McClelland model

This model creates specific ways to work with staff to ensure their job satisfaction and happiness with the organization overall. Managers will need to identify the supervisory tactics that "push the right buttons" to keep employee retention high. It can be tricky, as larger groups may comprise a variety of personalities. These managers may need advice and assistance to meet individual needs in a diverse group.

Job coupling

A publication by the "African Journal of Business Management" outlines job coupling as a retention strategy. This model includes 2 dimensions: “on-job-coupling” and “off-job-coupling.” They delineate 3 factors — linkage, fitness, and sacrifice — as key determinants in educing employee turnover.

Linkage

This determinant describes the informal and formal connections employees have with their organization and its people. These threads connect the staff member and their family to the organization with financial dependence, social networks, and even psychological connections. These can include work and non-work friends, groups, communities, and the physical work environment. The theory suggests the more linkages an employee holds, the more they are “bound” to the organization.

Fitness

How an employee perceives their compatibility with the organization is outlined by fitness. Are their personal goals and plans aligned with the company culture? Do their skills align well with the needs and demands of their job description? Additionally, fitness measures their affiliation with others within their work group and community. The theory suggests employees who find fitness within the organization will show higher job satisfaction and reduced inclination to leave.

Sacrifice

Sacrifice is the price the employee would pay, financially, socially, career-wise, and psychologically, if they left the organization. This could include more than their paycheck. An employee departure may mean giving up seniority that offers wider benefits, potential promotions, work-life balance, and personal relationships and networks. The theory suggests the more sacrifices they would have to make, the less likely they may be to leave.

Employee turnover prevention strategy

Using this model for reducing turnover, businesses could look to provide staff with more opportunities to make deeper, more meaningful connections with the work and their colleagues. These linkages can help employees feel more allied with the organization rather than invisible. Does their work include opportunities to provide outreach or volunteer services or work? They may participate in employee resource committees that add yet another link to the organization and its staff members. Providing chances to interweave employees' personal goals and aspirations with the organization is key to reducing their desire to leave. The fitness aspect may be closely akin to today’s employee desire for work-life integration. Employees who believe in their company's values and social responsibility are better able to align their own beliefs to their work. On a day-to-day basis, businesses must assure staff members are challenged, but not frustrated, by the work they perform. Otherwise, the work may reduce engagement and lower employee morale. In the longer term, advancement should closely align with the employee’s own career objectives. And milestones should be set and met to create a clear career path. Sacrifice may suggest putting employees in a position where they cannot financially or psychologically afford to leave. Providing wages or benefits that could be challenging to match in the marketplace might have such an effect. While this strategy may retain employees, it could also undermine their engagement, trust, commitment, and otherwise positive work environment.

Decreasing turnover using job coupling

The job coupling model suggests both the carrot and the stick are significant in retention strategies. Managers can work to develop more linkages and threads within and outside organizations that provide opportunities to build alliances and networks. Professional associations, licensing, and certifications can all be leveraged to enhance these. Assessment of each employee’s ability to perform their work successfully should be ongoing. But relationships and corporate social responsibility may be integral for employee retention.

Other ideas for reducing employee turnover

As your organization works to reduce attrition, aspects of these models may help increase employee engagement and longevity. In addition, consider these practical, commonsense ideas for minimizing turnover in your workplace:

• Craft your hiring process to recruit and hire the right people for the job.
• Review your onboarding process and documents; revamp as necessary. Even if you hire the right people, without the right tools and information to succeed, there’s a good chance they’ll leave.
• Run superior training programs. A robust and well-organized training plan can motivate and prepare employees to contribute to your organization in ways that offer professional growth and advancement.
• Stay competitive in the job market. Offer the best salaries and benefits possible. Even cash-strapped startups can bring benefits like remote work options and flexible work schedules and PTO to the table.
• Focus on company culture. Toxic employees can be hard to spot and deal with within the bounds of employment law. But the effort will have a positive impact on the workplace. If coming to work is awful because coworkers are insufferable, even premium benefits won’t keep a valued employee there long.
• Recognize and reward employees for their work. Employees are likely to search for another job if they feel a lack of appreciation, recognition, and upward mobility.

Many companies routinely calculate their own employee turnover for valuable insights into the causes and costs. They know that their commitment to meeting the needs of staff members, in their work, connections, and pride in the organization, are key to retaining top talent. Business management has its challenges. And we have solutions. Visit TriNet daily for ongoing HR, workforce planning, and business management tips and resources.

1. U.S. Bureau of Labor Statistics - JOLTS Latest Numbers