6 tried & tested strategies to reduce employee churn rate

You pour your heart and soul into building your company, but talented individuals keep slipping through your fingers. It’s annoying and disheartening at the same time, right?


You pour your heart and soul into building your company, but talented individuals keep slipping through your fingers.

It’s annoying and disheartening at the same time, right?

Replacing talent is costly, and the constant turnover sucks the morale out of your company.

But to reduce employee churn rate and keep your star players, you need to think beyond just increasing numbers on the paycheck.

To build a loyal, thriving team, you must invest in their growth, prioritize their well-being, empower them with autonomy, and show them their contributions matter.

Open communication, ongoing learning, and fair compensation will further solidify their sense of belonging.

This article explains six practical, proven strategies backed by expert insights and real-world research that you can implement right away and reduce your employee churn rate.  

Let’s dive right in.

What is employee churn and why it will kill your company’s growth?

Employee churn, also known as employee turnover or attrition, refers to the rate at which employees leave your company.

While some departures are natural and even beneficial, a consistently high churn rate saps your company’s growth and brand image.

High employee churn rates can have severe consequences across various aspects of a company, impacting both its short-term and long-term success.

They include:

  • Financial impact: Recruiting, onboarding, and training replacements require substantial investment, and you lose the productivity and expertise of the departing individual. According to McKinsey research, attrition could cost a company between $228 million and $355 million yearly in lost productivity.
  • Operational impact: Losing good employees and key personnel disrupts your projects and processes. Training new hires takes time, and institutional knowledge walks out the door with each departure. It leads to delays, missed deadlines, and a decline in quality.
  • Reputational impact: High churn sends a worrying message to potential employees, investors, and customers. Potential candidates might see it as a red flag, questioning the company’s culture, work environment, or stability.

On the flip side, functional turnover, where underperforming or culturally misaligned employees leave, can be beneficial. It allows you to replace them with individuals who align with your values and bring tangible skills to the table.

While functional turnover can improve team efficiency, a high overall churn rate, including functional turnover, remains a concern.

The key is to identify the reasons behind your churn rate and implement strategies to reduce employee turnover.

How to put it into practice? Let’s find out.

How to reduce employee churn rate & keep employees from leaving your company?

To maintain a low attrition rate, you need to create a workplace where people feel valued, engaged, and excited to come to work each day.

Here are some actionable tips to build a team that stays, thrives, and propels your company to success:

reduce employee churn

1. Find out the cause of churn

Understanding the “why” behind a high staff churn rate is the first step toward building a thriving, employee-centric workplace.

Pay close attention to a departing employee’s parting reasons. Conducting thorough exit interviews and surveys can help you understand why they decide to leave. It can offer you valuable clues to address and prevent future departures.

Numbers speak volumes. Scrutinize data on compensation packages, benefits utilization, and work-life balance metrics.

Are there any disparities across teams or departments? Are certain benefits underutilized, suggesting employee needs are unmet?

A healthy team dynamic and supportive manager behavior are essential for employee retention.

Closely observe team interactions and manager conduct and identify any red flags contributing to a hostile work environment.

2. Let them grow

Stagnation rarely sparks enthusiasm, and the same goes for careers.

To truly engage your employees and retain top talent, encourage a culture of growth and development.

Here are some ways to cultivate a growth-oriented environment and ultimately reduce employee churn rate:

  • External and internal training: Partner with universities or training providers to offer access to relevant courses, workshops, and certifications. Develop internal training programs led by experienced team members or external experts to share knowledge and best practices within the company.
  • Tuition reimbursement: Assist employees in pursuing further education to show commitment to their professional growth and strengthen their loyalty to the company.
  • Internal mobility and promotions: Establish a merit-based promotion system that recognizes and rewards employees for their accomplishments and contributions.
  • Frequent career development conversations: Sit down with employees to discuss their aspirations and tailor a personalized career path within the company.
  • Stretch assignments and special projects: Give high-performing individuals challenging assignments or projects that push them beyond their comfort zones. It will reduce employee churn rate, broaden their skillset, and highlight your trust in their abilities.

3. Recognize and reward achievements

Being humans, we all crave validation. A pat on the back goes a long way.

Publicly recognizing individual and team achievements through company meetings, internal newsletters, or even social media shoutouts fosters a sense of pride and belonging.

It tells employees their efforts are noticed and celebrated, which will reinforce their connection to the company’s success.

Go beyond basic recognition for those who consistently go above and beyond. Tailor performance-based incentives to specific achievements, offering bonuses, additional paid time off, or participation in exclusive training programs.

Get creative with non-monetary perks that resonate with your employees. Memberships to fitness centers, discounts on local goods or services, or even small, personalized gifts can help you retain good employees.

When people feel valued for their hard work and contributions, they’re more likely to stay invested and engaged in their roles.

4. Support their mental and physical health

A Harvard Business Review study found that over half of millennials and a staggering 75% of Gen Z have left jobs due to mental health concerns.

Consider the following strategies to foster a healthy work environment and reduce attrition:

  • Encourage and accommodate flexible work hours or remote work when possible.
  • Provide options for compressed workweeks or adjusted schedules to help employees manage personal commitments or health needs.
  • Offer ample vacation days to allow employees to recharge and take necessary breaks.
  • Implement supportive sick leave policies prioritizing employees’ well-being without fear of repercussions.
  • Establish Employee Assistance Programs to provide confidential counseling and support services for mental health challenges.
  • Promote awareness of available mental health resources and actively encourage employees to utilize them.
  • Conduct regular one-on-one check-ins to understand employees’ concerns and challenges.
  • Don’t stress too much about maintaining an ultra-formal work environment. Allow your team to connect with their peers, share jokes, or be in casual attire as long as they finish the work well.

Erica Keswin, a renowned business strategist and the best-selling author of The Retention Revolution says,

Having tattoos or wild hair colors, wearing heels or flats, rocking natural hair or getting a blowout, going casual or formal—none of these impact our ability to get our work done.

What matters is employees’ mental and physical capacity to act in the company’s best interests.

5. Foster financial wellness

Financial stress can be a heavy burden. It is a significant factor in employee productivity and engagement.

Taking proactive steps to support your team’s financial health can ease stress, boost engagement, and reduce employee churn rate significantly.

Equip your employees with the tools they need to manage their finances effectively. You may offer workshops on budgeting, debt management, investing basics, and retirement planning.

Another way is to provide access to financial advisors or online tools to help employees estimate their retirement needs, choose suitable investment options, and make informed decisions about their future.

Allow employees to set aside pre-tax funds for healthcare or childcare expenses. This will reduce their immediate financial burden and boost their take-home pay.

Consider offering low-interest loans for unexpected expenses or debt consolidation. It will provide temporary financial relief and prevent larger economic challenges down the line.

If you can, offer comprehensive healthcare plans with low deductibles and out-of-pocket expenses. It will minimize the financial burden of unexpected medical costs.

6. Value your employee’s time

When your employees’ days are bogged down by unproductive meetings, excessive workload, and after-hours communication, frustration and burnout inevitably follow.

Replace unnecessary meetings with online tools like instant messaging, video conferencing, and project management platforms. For brainstorming, document sharing, and quick updates, you can simply use online collaboration tools.

Try to save physical meetings for crucial discussions and team building.

Don’t treat everyone as a one-size-fits-all worker. Analyze individual strengths and workload capacity, then assign tasks accordingly.

You may conduct anonymous employee engagement surveys frequently and get their input on company culture, job satisfaction, and workplace involvement to convey your genuine acknowledgment of their time and efforts.

Moreover, set clear expectations for working hours and stick to them. Discourage emails, calls, or other communication outside these designated times.

Allow your employees to disconnect and recharge truly. Otherwise, they will feel pressured even when they are home with their family, which will inevitably lead to a high churn rate.

Break free from high employee churn rate

To reduce employee churn rate, the first bone of contention is to identify the causes of your employee attrition.

After finding the root cause, you should foster a workplace that your employees look forward to coming to.

I am not saying it should be a heaven on earth for your employees. But, it must not be hell either.

To truly understand what’s driving your employees away, listen to your team’s genuine thoughts and feelings. Ask them the right questions about work-life balance, career development, company values, and anything else influencing their decision to stay or leave.

Only then, you will break free from a high employee churn rate.

Good luck retaining your champions!

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6 tried & tested strategies to reduce employee churn rate