Does the new year mean a spike in employee turnover?
It’s a well established mindset for many that the start of a new year is exactly that – a new start. Whether it’s making new year’s resolutions or making big life changes, January and February are as a good a time as any to be looking ahead and thinking about what the future will bring – and that includes employees. So, should organisations expect to see their employee turnover rate increase in January and February?
New year, new job?
Is the start of a new year a popular time for employees to look for a new job, causing employers to see a higher turnover rate at the beginning of the year?
The answer, according to many, is yes.
Glassdoor calls out January as the month which typically has the highest employee turnover rate, signaling that many employees are ready to move by the time the new year gets underway.
LinkedIn also reveals that January and February see job postings increase by 15-20%, making it a prime time for job hunting, as well as a popular (and competitive) time for organisations trying to recruit new talent.
A new year will mean new budgets for many organisations, and recruitment is often high on the list of priorities. So whilst it’s a good time to seek out new talent, it’s also enticing for anyone considering a change of roles to start looking more closely at other opportunities out there.
What drives high employee turnover?
Several factors can cause high employee turnover rates, so let’s break them down one by one.
1. Excessive Workload
When employees are pressured to work extra hours, or are faced with a daunting workload, they risk burnout and both mental and physical fatigue – potentially diminishing their productivity and increasing unhappiness. In the process, an employee’s work-life balance might suffer, and they may begin taking more absences from work. To help prevent this, ensure you are:
- Setting reasonable working hours, and tracking overtime
- Creating achievable objectives
- Allowing breaks between different tasks and shifts
- Allocating adequate resources to projects and teams
2. Differing Management Approaches
It’s crucial for managers to provide consistent feedback and discipline to maintain team morale and reduce turnover. Inconsistencies in these areas can make employees feel unsupported or unfairly treated, affecting their job satisfaction and ability to improve. Consistent standards and regular feedback can foster a sense of equality and direction, boosting support and motivation for success.
3. Insufficient Acknowledgment of Team Members
Lack of recognition for accomplishments or hard work can make employees feel undervalued. This can blur the understanding of what constitutes good performance, potentially leading to lower productivity and achievement. Celebrating milestones and providing positive feedback, both publicly and privately, reinforces good work habits and makes employees feel valued.
4. Limited Professional Growth Opportunities
Providing training, educational opportunities, and specific role training is essential for professional growth. Lack of such opportunities can result in stagnation, outdated skills, and reduced productivity. Enhancing professional development can be achieved through:
- Access to training programs
- Offering complimentary courses
- Encouraging educational pursuits
5. Restricted Career Progression
Staying in the same role for too long without advancement can make employees feel underappreciated. Clear career progression paths can boost morale, encourage skill development, and foster loyalty. This also makes the organisation more attractive to prospective employees seeking growth opportunities.
6. Inadequate Salary and Raises
Organisations failing to offer competitive salaries and regular pay increases may find their employees feeling undervalued. This could lead to decreased motivation and therefore a higher turnover rate. Competitive pay helps attract and retain top talent, enhancing productivity and aiding in achieving organisational goals.
7. Inadequate Benefits
Organisations may find that their current benefits offering is being underused – either because employees are unaware of them or do not find them valuable. It’s also important that benefits are tailored, where possible, to suit your workforce, and match those that are available amongst your competitors. Knowing what your employees value (and need), in order to remain engaged and invested in their work is crucial in helping to reduce employee turnover.
8. Weak Organisational Culture
A company’s culture is defined by its values. Poor culture can manifest as a discrepancy between stated values and actual practices. Improving culture involves:
- Implementing fair and consistent policies
- Demonstrating values like empathy and community engagement
- Encouraging positive behaviors and communication
9. Team and Management Mismatches
Misalignments between managers and team members can cause dissatisfaction. Addressing these issues through team reorganisation, aligning personalities, work styles, and skills can improve communication, efficiency, and job satisfaction.
How can organisations retain employees during the ‘new year, new job rush’?
What strategies can HR and business leaders adopt to minimise the number of employees leaving?
Here are some metrics that should be monitored:
Assess the Extent of Turnover
Begin by understanding the current impact of turnover. Often, organisations calculate turnover in various ways, hindering effective comparison across different areas. A uniform approach to measuring resignation rates across all departments and locations is essential.
Identify the Departing Employees
Knowing who is leaving the company is crucial. Are they high achievers or senior staff? The departure of highly skilled and knowledgeable employees can be a significant setback, as they take their expertise and networks with them.
Examine Turnover Reasons
Before resorting to universal salary increases, it’s important to investigate deeper. Understand how various factors like pay scales, time until promotion, length of service, performance, and desired training opportunities influence resignations. This analysis will inform more effective adjustments in compensation, benefits, and professional growth opportunities, balancing cost management with retaining key personnel.
Target High-Risk Groups for Retention
After identifying the groups with high turnover, design and implement retention strategies focused on those most at risk of leaving. This proactive approach can help retain essential talent in the organisation.
With the start of the year being a popular time for many employees to consider their position within a company, and potentially look elsewhere for a new job, it’s vital that organisations do what they can to retain talent. That isn’t necessarily going to be a quick fix but by identifying key areas for improvement, organisations can bolster their team culture, productivity and morale, and avoid seeing valuable employees walk out the door.
