How to avoid turnover contagion

As the UK economy slows, employers large and small are having to adjust.

The days of rapid growth in employees are over, at least for now, as smaller companies do their best to keep costs down until the sunshine returns again – whether that be with a hiring freeze or actual redundancies. But any company changing its headcount might find it is suddenly losing more employees than it was bargaining for – thanks to what we call ‘turnover contagion’.

Our recent Talent Insights Report found recent reductions in headcount was the number one reason cited by employees who were hoping their next job would be at a new organisation – i.e. people who are looking for their next job elsewhere. It was cited as a top reason by 42% of these potential leavers.

It’s not that difficult to work out why. When staff are made redundant or are not replaced, the staff that are still there can suddenly feel a lot less secure in their job than they did previously. The temptation to jump to a safer ship kicks in. Another top reason was “I think I can get a more secure role elsewhere”, cited by 30% of these potential leavers.

It isn’t just our research either. A study from SHRM showed that an employees’ decision to leave is influenced by their coworkers, especially in tight-knit teams.  

This chimes with an overall rush to security we saw across the survey. 

Asked what would encourage them to stay in their current role, 18% of workers said: “an assurance of job security”. Other proxies for security were even more popular – the top reason cited was “a salary increase” at 45%. People who get pay increases generally don’t feel like their job is about to disappear, as they feel valued by a company.

But not every firm can afford to give employees bonuses or pay-rises to make sure they know they are valued. Indeed, doing this at the same time as reducing overall headcount could be particularly problematic. So how should employers going through a reduction in headcount make sure the employees who stay know they are valued and secure?

Tell them! Proactive and thoughtful communication with employees at these tough points is key – make sure the people who you need to keep your business running know how much you value them. Be honest about the state of the business without giving them undue cause for concern. Some of your best people might not have any idea of how much you value them, and a simple personalised note can do a lot to amend that.

If you can, make clear that their job is safe, and the current redundancy round or other headcount reduction is over. Make clear that you don’t see the company shrinking forever, and there are still big opportunities for their career within it. Offering some sort of training or other development opportunity is a great way to show these employees that you’re there for the long term with them. Don’t just quietly assume your best people know that you want them to step up at some point – make clear that this is a goal and help them achieve it. Good HR software like Employment Hero will help set these goals in stone, not just as half-hearted commitments made every three months at quarterly review meetings.

Formalising and anonymising feedback can also do a lot to prevent problems before they metastasise. Employment Hero offers anonymous happiness surveys for employees to complete which are a great tool for getting an overall picture of employee wellbeing and workload. A key resignation might result in a serious increase in workload for one team that you need to know about and if possible soften.

These rough economic times won’t last forever. Getting through them with your team intact will require some work, but it will be worth it on the other side.