Why Employee Turnover Is Gutting Frontline Businesses

The key to gaining excellent employees… is not losing them in the first place.

Frontline workers are scarce.

Data suggest three undeniable trends in frontline industries: job growth, wage hikes, and labor shortages. Workers are becoming more expensive and less plentiful, and American companies need to develop strategies to retain their existing employees.

The facts:

· United States unemployment is at 3.6% — the lowest since 1969.

· Frontline workers are in record demand.

· Wages are increasing fastest for blue-collar workers.

· Employee turnover is higher than ever.

The labor market has created a perfect storm for frontline employees. Because of high wages and heightened demand for their services, frontline workers can easily quit with an expectation that another firm will quickly hire them. As a result, employee churn is at a record high.

Turnover is expensive.

Low productivity, fractured workplace relationships, and recruiting expenses are obvious detriments of employee turnover. The total cost, however, is more expensive than executives may realize.

The facts:

· Leading analyses place the cost of replacing one frontline employee between $2,000 and $7,000.

· So-called 100% turnover industries now account for 25% of America’s workforce.

For organizations with large workforces and high turnover, the cost of churn can reach millions of dollars per year. So, how can employers cut off this drag on their businesses?

Frontline employees quit for avoidable reasons.

Most executives wrongly think that employees leave due to low pay.

The facts:

· 78% of blue-collar workers quit due to nonwage factors — lack of engagement, poor relations with managers, and scant opportunities for career advancement.

Because less than one quarter of workers leave due to wages, most turnover in the United States is avoidable.

Continuous employee feedback can unearth reasons for turnover.

Performance reviews, suggestion boxes, and town halls are unnatural processes that do not support honest, comfortable feedback about workers’ pain points. Even annual surveys have their flaws; they are long, boring, and often mandatory. Yet, these are still the main strategies that companies use to communicate with workers.

Continuous employee feedback, however, is the cutting edge of frontline human resources.

The facts:

· Employees desire constructive criticism, and sharing suggestions creates a “feedback culture.”

· Companies that implement continuous feedback systems often reduce their turnover by 15% or more.

In closing: turnover is prevalent and expensive. Frontline employees quit for avoidable reasons. Many of those reasons can be identified through natural, anonymous insights directly from employees. And companies that fail to modernize their employee communications will be left in the dust.

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