August 29

3 Ways to Reduce Staff Turnover Using Training

How much do you think it costs a business to replace a former employee? Try 150 percent of their salary. That includes direct costs like separation payments and costs associated with hiring and training up a replacement. Then there are the indirect costs. How long is it going to take for the new guy to get up to full productivity and start adding value to the company ? Three months? Maybe six? How about 18 months? How much would it cost a business to farewell and replace as much as 40 percent of their workforce every year?

The bottom line is that high turnover is, well, bad for your bottom line. Currently the average turnover rate for Aussie businesses is 18 percent, with the accommodation and Food Services industry turning over on average 40 percent of its a workforce annually. The Agriculture, Forestry and Fishing sector has an industry-wide turnover rate of 20 percent.

Man Having Birthday at Work

This year, 25 percent of Australian workers are thinking of changing jobs. Its stats like these that make small businesses weary of of offering training beyond the induction, and the health and safety training required by law. After all, why invest in training if staff are just going to pack up and leave in a few months. Ironically, 20 percent of Australian workers who left their jobs voluntarily, cited lack of training as a reason for quitting. Fifty percent of workers surveyed by the Australian Human Resources Institute (AHRI) gave lack of opportunities for development and advancement as their reason for handing in their notices.

Training is the solution to both these issues. Companies that invest in training will reap returns that include a committed workforce, improved morale, increased productivity, and improved staff retention rates. If you are looking to reduce staff turnover in your business, here are three ways to use training to do just that.

1. Get Onboard With Onboarding

Surveys in the U.S. have concluded that as much as 67 percent of new hires will stay on past three years with their employer if they participated in a structured onboarding program at the onset of their employment. Onboarding and induction are often used interchangeably, but they are not the same thing. While an induction is a HR focused day with new recruits filling out TFN forms, picking up access credentials from IT, and getting a tour of the lunchroom, onboarding is a process that could run three months or longer. The onboarding process is the opposite of the bewildering info dumps that characterises traditional induction days. Onboarding is a programme that supports a employee transition from new hire to fully functional by providing OHS and role-specific training in bite-sized chunks instead of in marathon sessions on their first day of work. Along with how to do their jobs, onboarding helps new recruits understand the context for their jobs and how what they do contributes towards achieving specific business goals. Onboarding is also characterized by ongoing assessments and spaced refresher courses. In short, onboarding is about helping new recruits find their feet and do their job well. Too often, new recruits are tossed into the proverbial deep end on day one. Employers take the sink or swim approach. Without a structured onboarding program, new recruits will more often than not sink, and before they drown, they will often just quit.

2. Use Training to Reward and Recognize 

Employers of Choice don’t just use training to enhance performance. They know that commitment can be instilled in a team by using training to reward workers and recognise leadership potential. While many may think that what keeps employees from leaving is the size of the pay packet, according to AHRI, the issue of inadequate pay comes in second behind lack of promotion opportunities on the list of reasons why workers leave their jobs voluntarily. The two are indeed related. Workers know that higher wages are dependent on attaining new skills and knowledge, and taking on new responsibilities. Workers want to develop in their role. Employers of Choice know this and so scout their ranks for leadership potential and actively invest in the training necessary to realize that potential. A bonus or some other incentive may be a good way recognize hard work, but nothing instills commitment quite like a business putting their money where their mouth is and investing in the development of their workers.

3. Exchange Career Advancement for Training

All very well and good, but what if your business struggles to create opportunities for advancement? Food services, hospitality, agriculture, and tourism suffer high turnover and huge recruitment costs. These jobs are often low-skilled positions that offer few if any promotional opportunities. Duration of employment in these sectors is often measured in months rather than years. This is where a business needs to get creative. Workers in these industries will often use their current employer as a stepping stone to another job. Because these jobs require a generic skill set, the step is often not up but rather a lateral move. Workers in these industries spend years moving from one employer to the next every few months, but never actually changing careers or moving up their industry. Employers of Choice recognize this fact. Their workers want to break out of the rut they in and the only way they can do that is if they acquire new skills and experience. The employer wants their workers to stick around for a few years rather than a few months. It’s time to cut deal. What creative employers will often do is offer training related to the worker’s career goals. The training may in fact have nothing to do with their existing job. For instance, an office cleaner could be sent on a computer course. A farm picker could go on a chef’s course at a regional TAFE. In exchange for the employer covering the cost of the extracurricular training or education the employee commits to staying on. Commitment largely comes down to reciprocity: scratch your back, and you scratch mine. By accepting that one day an employee will leave, but offering training anyway, the employer is able to delay their exit for a few years and enjoy the benefits of genuinely committed worker.

Whether your business needs to roll out a comprehensive onboarding program, or provide role-specific or safety training, the most affordable way to do it is through a customisable virtual training room. If you would like to learn how a cloud-based learning management system could benefit the training in your business, sign up for a demo today, and see a virtual training room, created by OTrain, in action.

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