Here's the Secret to Reducing Employee Turnover and Cutting Costs Hiring and nurturing the right fit for a position can have a multiplier effect on your business.

By Kenny Au

Opinions expressed by Entrepreneur contributors are their own.

With the contraction of the global economy, businesses are using all the tools they can get their hands on to remain ahead of the competition or simply stay afloat. As a business grows, one of the things it will eventually have to deal with is employee turnover. However, the cost of replacing employees can be a problem for smaller firms.

Workplace-consultancy firm Heidrick & Struggles released a study revealing that 8,000 of the 20,000 people they placed were fired, quit or forced out within 18 months. This underscores that when acquiring new talent, companies should give the candidate some time to settle into their new environment. Depending on the person, this might last for a couple of days or a week, but it's a good way for the candidate to gauge whether the position and company are the right fit.

Related: 5 Tips for Effectively Onboarding and Training New Hires

Set up your new hire so they'll be able to work on day one. Ensure they have the necessary computer, ID card and any other essential tools. If they work remotely, they should already have access to the company's system. And make announcements to let everyone on the team know someone new is joining. This will help afford those who might be directly or indirectly impacted by the new position time to prepare.

Hiring someone for a newly created position has its own nuance, since somebody else will likely be giving up high authority or responsibility and transfering it to that new team member. This can create conflicts, so be transparent about shifting dynamics before recruiting fresh talent.

Enhance company culture to bring the best out of employees

Company management has to create an environment that makes people feel comfortable, but a leader's behavior alone can be a significant factor in how employees feel about their job and the company in general. Behaviors that negatively affect employees can also impact their performance. For instance, a leader might have the habit of interrupting others while they're talking or pushing them too hard when they're stressed out.

Ultimately, the leader sets the tone. A healthy work culture with flexible rules can bring the best out of key employees, who will in turn help the company stay on good footing during a crisis.

Boosting resilience and performance

A growing number of CEOs and senior executives are now turning to meditation to help them deal with their stressful schedules. Studies have shown that it can decrease anxiety and potentially boost resilience and performance, while also enhancing one's sense of connection to others.

Apart from meditation, effective communication can help resolve most conflicts. However, there are differences in how people from different generations communicate. Whether working through something with a colleague who's many years younger or older, it's always a good idea to give sound reasons behind a particular decision.

Cases of bad employee behavior, such as those who badmouth others, need to be addressed as quickly — and tactfully — as possible.

Related: 3 Great Ways to Solve Hiring Challenges

So remember: Accommodating the right employees can lead directly to growth. And not putting too much pressure on, or setting complex targets for, new talent can help reduce turnover and aid new leaders transitioning into modified roles.

Focus on creating a healthy work culture that allows employees to unleash their full potential. Encourage their ideas and motivate them to perform more effectively. And don't forget to effectively convey the company's goals, which will prevent potentially disastrous conflicts within an organization.

Now go field a winning team.

Kenny Au

Entrepreneur Leadership Network Contributor

Podcast co-Host & Investor

Kenny Au is the co-host of the ‘The Human & Machine’ Podcast. As the founder of Elevate Ventures, a venture studio for Web3 industries. He has invested and advised in 50+ venture-backed projects.

Editor's Pick

Related Topics

Business News

Tech CEO, 26, Found Dead in Suspected Murder

Pava LaPere founded EcoMap Technologies in December 2018.

Business News

Sorry, Point-Lovers—Buying With a Credit Card Can Be Costly For Small Businesses

"Swipe fees" — charges imposed on merchants for processing card payments — can add up for small businesses, with some saying it's their third largest expense.

Business Ideas

55 Small Business Ideas to Start in 2023

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2023.