How to Reduce Employee Turnover: Prevention Strategies That Work

U.S. turnover rates have shown signs of improvement in the last few years. Voluntary turnover sits at around 13%, down from 17% in 2023. However, the cost of turnover is rising. Tight competition, market concerns, inflation, and more are eating up that four percent. 

Plus, many employees are staying due to economic uncertainty, not job satisfaction. More workers than ever are keeping an eye on job listings. They’ll never stop searching for fairer compensation, more flexibility, and a better culture. 

Don’t wait for your competitor to post an opening your team can’t resist. Today, we’re discussing how to reduce employee turnover from a preventative standpoint. 

What’s the difference between retention and turnover?

Employee turnover refers to replacing people who vacate a position. Employee retention is about keeping current employees engaged in place. 

Examining retention is a great way to check the health and quality of your culture, job satisfaction, and workplace happiness. Addressing turnover means getting real about productivity loss and money wasted due to preventable issues.

Turnover and retention need one another. Great retention rates will naturally lower turnover. Lowering turnover will inevitably lead to a retention boost. 

What’s the difference between voluntary and involuntary turnover?

Reducing turnover often means reducing voluntary turnover. This is when people resign, retire, or quit of their own accord. Involuntary turnover includes employees who were fired or laid off. 

Because involuntary turnover is more likely to be a cost-saving measure, it isn’t always bad for business the way voluntary turnover is. Voluntary departures are much more likely to require replacements, which is where those costs become problematic. 

Furthermore, if we look at the most common reasons why people quit, high turnover can harm a company’s reputation. It can reduce the quality of future applicants and make productivity loss a long-term issue.  

The warning signs of preventable turnover

A voluntary turnover rate is sure to include people who resigned due to personal reasons, like moving. So, from voluntary turnover, let’s break it down to preventable voluntary turnover. Here are signs that the professional environment is creating quitters.

• Increased absenteeism. More frequent sick days and call-ins. May accompany physical complaints like feeling exhausted or headaches.
• Lower engagement. Missing meetings, less enthusiasm, fewer voluntary contributions.
• Productivity loss. Any measurable increase in missed deadlines or quality of work. 
• Survey responses. Poor scoring for compensation or satisfaction with resources or management. Customer satisfaction may dip where applicable.
• Conflicts. Frequent disagreements or avoidance among employees. 
• Problems with management. Fewer check-ins, no feedback loops, increase in complaints from either side. 

Diagnosing poor turnover rates

The first step in diagnosing the cause of a turnover rate is spotting the patterns. Perhaps it’s a particular department that’s prone, or people tend to leave after a specific number of months or years. This can add context to remarks you pick up from exit interviews (another useful source). 

If you’re already tracking and measuring engagement, or using a recognition tool like HeyTaco, these insights are helpful, too. 

Uncovering the roots of high turnover

Insights specific to your organization are important and unique. Still, the majority of cases will come down to one or more of the following factors:

• Lack of appreciation
• Management
• Compensation
• Limited growth opportunity
• Inflexibility
• A toxic culture, or no real culture to speak of
• Poor communication and unclear expectations

How to reduce employee turnover: Strategies for prevention

Strategy 1: Make recognition a small, everyday habit, not a reward. 

HeyTaco’s recent white paper, "Designing Recognition for Engagement," cites some encouraging studies that link the benefits of recognition to a reduction in turnover – up to nearly 60%, by some estimates. However, when we discuss recognition to reduce turnover, we’re not talking about special awards and gift cards. Those are occasional perks along the way. 

Employees who feel valued receive rapid recognition for small wins. They get noticed by their team lead for correcting a minor mistake. They receive cheers from peers when they finish a weekly task. They get a thank-you from managers when they take a moment to answer a coworker’s question. 

Peer recognition tools that managers use alongside the team are a quick way to make this happen. When recognition is informal and easy, it feels more authentic. When it’s plentiful, people feel more seen and valued. 

Strategy 2: Become more awesome at onboarding. 

Various estimates over the years suggest that up to 20% of turnover happens in the first 45 days of hiring. There are a rich variety of reasons for this. But ultimately, many workers end up feeling like they were catfished by an employer. What they anticipated and what they experienced are miles apart.

Create a more comprehensive onboarding plan that encompasses a full 90 days. Be clear and honest about what to expect, leverage microlearning to avoid overwhelm, and use the buddy system. Making support as accessible as humanly possible and spacing out training and info dumps isn’t hand-holding. It’s how you reduce productivity loss included in the cost of turnover.

Strategy 3: Take a good look at management.

We’ve all known at least one manager with expert-level industry knowledge and deplorable bedside manner. Space is limited for such personalities in the modern workplace. An arsenal of soft skills, from effective communication to being approachable, is nonnegotiable for lowering turnover.

If a manager isn’t directly connected to so much turnover, don’t toss the baby out with the bathwater. Assess what can be done to further training, especially those related to the people skills that good managers possess. Hold them accountable for not conducting regular 1:1s and check-ins. 

Strategy 4: Breathe new life into stagnant careers.

How does your organization define career advancement? Pew says that more than half of the quitters they surveyed did so in part because their former employer was a dead end. Communicate advancement opportunities and openings more clearly, but think wider. 

Lateral moves, skill development, and high-quality feedback during career conversations. Coaching, mentorship, workshops. Everyone isn’t asking to be promoted to management. They’re asking for the time and resources to improve. 

Strategy 5: Don’t shy away from looking at pay.

Absolutely perform that market analysis and use tools to review pay equity. In the last decade, employees have made it clearer that they want better pay. 

Does better pay mean more money? Not necessarily. If pay is already fair, what they’re actually looking for is better compensation for other junk they have to put up with at work, from unpredictable conditions to toxic and unforgiving environments.  

Present compensation as a total rewards approach. This means clearly communicated and personalized benefits, wellness programs, career development, and a culture of appreciation. 

Strategy 6: Get to the bottom of burnout.

Lower retention and higher turnover often come after workloads and expectations shift. The first signs of an employee checking out will be similar to what we see with the now-infamous quiet quitting. 

Biopsy workloads and policies that impact work-life balance. Add more flexibility (remote days, compressed workweeks) where possible and encourage people to use their PTO. Incorporate these into the company wellness program. Present them as essential, well-deserved, and easy-access benefits of working at this organization.

Strategy 7: Foster community, collaboration, and belonging.

Improving recognition pours a foundation on which we can create cohesive teams. On a cohesive team, each member feels needed and necessary. This boosts their confidence as much as it does overall team performance. 

Encourage cross-team collaboration and incorporate challenge-oriented team-building exercises. Double up on these ideas for remote employees. People who feel isolated in their roles may be quicker to exit.

Strategy 8: Be the change they want to see.

Lots of organizations with poor to middling turnover rates invite feedback and conduct pulse surveys. What they don’t do is act as though that feedback matters at all. 

It may be true that the company cannot fix every complaint. However, the bare minimum is closing the feedback loop. Devise a process for sorting, addressing, and following up on feedback. It’s the first way to truly demonstrate that an employee’s voice matters. 

Add an additional ounce of prevention this week with HeyTaco.

“My manager must think I’m dumb.” 

“No one even says good morning back to me.” 

“I don’t know how to ask for help, or even who to ask.” 

“They keep giving me extra work, and it never pays off for me. I don’t get so much as a thank you.”

These are very common and real refrains from people who quit. Consistent, quality recognition in all its forms is the fastest intervention. Combine recognition tools with a few other strategies we’ve shared today, and you’ll know how to reduce employee turnover.

Try HeyTaco for free this week, and let employees know better and brighter days are ahead.

How to reduce employee turnover FAQ

What is the leading cause of employee turnover?

The leading cause of employee turnover is generally compensation, followed by a range of issues that a robust recognition program could help address. For example, uncaring managers, zero growth opportunities, and not enough flexibility.

How to calculate employee turnover?

To calculate employee turnover, set your time period, such as the last quarter. 

Count every person who left and divide that number by the total number of employees during that period. Multiply by 100 to get your percentage. 

What should I do when someone resigns?

Conduct a thorough exit interview that can yield actionable feedback, or at least a lesson learned. Remain neutral and do not become defensive. This is the best path toward getting a useful knowledge transfer that will smooth the transition. 

As for a counteroffer, it isn’t advisable in most cases. It sends the message that they were never compensated or appreciated to the best of the company’s ability. You’d be retaining their resentment along with their skill.

How long does it take to reduce employee turnover?

Allow 90 days to implement everything, with milestones along the way. For example, focus on the quick wins during that first month. Do your stay interviews, ramp up peer recognition, and keep doing that analysis on current data.

By 60 days, you’ll have implemented some bigger changes. Manager training, compensation review, and onboarding improvements. At the 90-day mark, larger systemic and cultural initiatives will be underway. 

How do you measure the success of your efforts to reduce employee turnover?

After you’ve employed every strategy, you can track your turnover reduction. Segment to get department-level metrics and look at the following:

• Engagement insights and recognition activity
• Exit interviews/surveys
• Involuntary vs. voluntary turnover rates
• New hire retention and satisfaction rates
• Cost savings