The costs of high staff turnover can significantly affect companies, not just in financial terms but also in terms of morale for residual staff members. In addition to the obvious direct financial costs of replacing staff, there are other knock on effects, which can be equally, if not more, damaging. Repercussions include the loss of key skills, knowledge and experience from the company, disruption to operations in addition to a negative impact on workforce morale. Such turmoil then places extra burden on both HR and line managers. During such periods of high staff turnover, HR efforts frequently become skewed toward constantly recruiting and training new recruits, which limits the resources they can put into staff retention activities and can, in turn, create a downward spiral effect. When seeking to resolve these problems associated with high turnover, it is essential that companies investigate the underlying causes. Companies should also determine an appropriate level of attrition, by benchmarking against similar organisations and taking into account the real costs of turnover to the company.

Think small
Many issues concerning why staff are leaving the company can be addressed fairly simply at a local level within the company by placing a greater emphasis on listening and responding to employees' concerns and suggestions. This can be done on a company wide basis through surveys and staff suggestion schemes. However, it is often better done on a more informal and personal basis by encouraging open and relaxed communication on a wide range of topics between staff at different levels of the organisation. On a day-to-day basis this can include informal dialogue between line managers and frontline staff, but senior managers should also be encouraged to circulate from time to time among frontline staff and line managers to elicit informal feedback and suggestions. This is something which is relatively easy to achieve and hence, much more common in smaller companies – helping to foster a feeling of belonging and worth among staff.

As organisations grow, this inter-level informal communication is often given less significance in order to preserve the hierarchy of roles within the organisation. This stifling of information through flow may lead to trivial issues being blown out of proportion as they get escalated and gradually morphed from level to level with the company. Likewise, fairly fundamental problems may be overlooked as frontline staff are not encouraged to give any feedback and often remain silent to avoid rocking the boat. Indeed, creating a corporate wide atmosphere of informal sharing of ideas, although viewed by many as a rather utopian ideal, can, even if only adopted on a micro-scale, help significantly reduce staff stress levels and improve interdepartmental communication. Larger companies would be well advised to "think small" again when it comes to fostering the flow of informal communication between various levels within the organisation, as this can have a dramatic effect on improving staff retention in the long run.

Think global
Frequently organisations are faced with much more general staff retention challenges that may be related to more wide reaching influences such as the economy, activities of competitors and even environmental and lifestyle factors such as air quality, healthcare and the perceived achievability of a good work-life balance. All of these issues demand organisations take a broader and longer-term plan. If companies are willing to adopt a more holistic approach to reducing turnover, then this can have a dramatic long-term effect on staff retention by improving the global working environment within the organisation and helping to foster greater cultural change.

This is likely to involve introducing a variety of initiatives aimed at enhancing internal career opportunities, building in a degree of flexibility and cultural awareness to help support a better work-life balance and creating a more attractive and interesting working environment. The ultimate goal of the employer is to offer a working environment which affords such a degree of flexibility, open level of communication and opportunities for learning and promotion that staff view it as highly desirable.

Key issues which staff consider important in terms of job security include:

• Assurances about the future of their organisation
• Specific information about future staff training programs
• Clarification on overtime policies
• Understanding of company promotion guidelines
• More face to face time with executives

No budget - no problem
Many organisations may realise they have such issues in existence but are reticent about embarking on new training programmes due to budget constraints. However, what must be considered is the ultimate cost of losing key staff. Organisations must learn to embrace key staff if they are to avoid losing them. In order to encourage key staff to stay, without any impact on budget, companies might follow the Hong Kong Government's lead in offering more flexible work schedules or providing more opportunities for staff to work on different projects.

Conclusion
Companies make a commitment to making these strategies work within the organisation can dramatically improve staff retention. To ignore them is not only myopic, but also short-changes current employees. This may ultimately mean losing key staff to competitors, which incurs a far greater cost than that of fixing the original problem.

Source:Written by Paul Arkwright (HR Magazine)