How to Reduce Churn in Your Hourly Workforce

You spent a lot of time and energy hiring an employee to join your team. And it wasn’t as simple as just posting a “Help Wanted” ad in the local newspaper. You were probably very thoughtful about drafting the job posting and promoting it across several social channels. You probably spent money promoting the opening on several job boards and incentivizing employees to spread the word. You likely also interviewed several candidates, conducted drug tests and background checks, and offered a sign-on bonus to the one candidate you ultimately selected. 

And that’s just the beginning.

You also invested time getting the new hire onboarded—by having them fill out all the paperwork required by the US Department of Labor and getting them all the training they needed to perform their job well.

Needless to say, the cost to bring on one new employee adds up quickly. And losing an employee can be quite expensive because you’re losing your investment and forced to make another. According to the Society for Human Resources Management (SHRM), the average cost to get an employee replaced is estimated to be 6 to 9 months of their wage. And for hourly employees, the costs can go up to more than $5,000.

Today, the cost of churn is hitting hard.

The annual overall turnover rate in the US recently reached 57.3%. For the restaurant industry, which is notorious for high turnover, the rate exceeded 130%. 

These numbers are troublesome, but don’t let them discourage you. A study conducted by the Work Institute found that more than 75% of the causes of employee churn are very much preventable. And companies—like Chick-fil-A, Zappos, and Amazon—that hire hourly workers have much lower churn rates because they take proactive steps to better the employee experience—and you can too.

1. Improve Your Interview Process

High turnover rates may be the result of hiring the wrong candidates. To prevent such occurrences, try developing hands-on interviews in addition to the conventional interview process. You do this by giving the candidate an opportunity to perform some of the tasks required to do the job, which will allow them to demonstrate their skills, talents, and knowledge early on. This will also give you a better picture of the candidate and give them an idea of what the job will entail. Make an effort to conduct this portion of the interview during peak periods so they can get a glimpse of the rapid pace of the restaurant. (You can either pay them for this "test task" or let them know up front that they are not on the clock during this part of the interview.)

Before you start any portion of the interview process, pre-screen applicants to ensure that they meet the key requirements needed for the job. At Workstream, we provide smart screening to help you pick out the most suitable candidates based on the qualities you’re looking for in your hourly workers. Screening questions are highly customizable and the entire process is automated to save you time.

2. Strive to Engage Your Employees

Employee engagement is one of those slippery terms used by human resources professionals to bring attention to the need for developing ways to get employees to love what they do. Undoubtedly, engaged employees are better employees. To improve engagement, show employees how much their work means to the company. Explain how their job has an impact on the overall customer experience and business performance. Find ways to make your employees feel a connection to what they’re doing and how it serves a purpose (beyond their paycheck). Encourage your employees to give feedback often and help them feel heard.

3. Develop Great Leaders

It’s been said that most people do not leave their jobs, but rather that they leave their managers. According to a recent Gallup study, 52% of voluntarily exiting employees say that their manager or organization could have done something to prevent them from leaving their job. Focusing on improving the skills, particularly the communication skills,  of your managers and leadership team can help to reduce your company's churn rate. 

Managers and leaders should provide continuous feedback to their employees, giving the team credit when they’ve done something great and providing constructive coaching and feedback when they falter. One aspect of being a great leader is helping employees see their managers as someone who works alongside them—not just someone who dictates orders. Let employees see the human side of your leaders and managers. 

4. Invest in Your Employees

“Your business is only as good as the employees you have onboard.” In other words, hiring your staff without sufficiently developing them likely won’t take your company very far. By equipping your employees with the right tools and knowledge for the job, their engagement and performance will likely improve. Although this may be costly in the short run, investing in employees can provide huge payoffs in the long run through better performance and lower turnover.

Take the initiative to educate your employees. This doesn’t mean that you need to send them to college, but it does mean you need to help them understand how their role impacts the success of the business. Additionally, consider offering training. This can be in customer service, food handling, inventory management, etc. Invest time (and money!) into employees and watch them blossom. Attending to their development bolsters a sense of loyalty and helps to reduce the chances of them leaving the company anytime soon.

Another way to invest in your workforce is through coaching. McDonald’s currently offers this to every new employee the moment they get hired. By coaching your employees early on, you have the ability to nurture them into effective future leaders.

5. Solicit Suggestions from Your Workforce

This may not seem like a great step for reducing churn, but it’s an effective way to increase engagement and loyalty, two things needed to help reduce turnover. Your employees are a wealth of information, experiences, thought processes, ideas, and dreams. Tap into this extremely valuable resource to get ideas on how to improve your business. Create a suggestion box and read through the team’s suggestions once a week. You may even ask your staff to take the first hour of their shift to brainstorm ideas for solving a particular customer service issue or sales display item. Don't just ask them questions, but truly use what they provide and give them feedback on how their ideas did or did not work in a situation. Doing so will increase their loyalty and appreciation for the company.

Retain Employees

Ready to get started? You don’t have to implement all five strategies at once. Even if you only implement one or two, they’ll make a tremendous difference in your retention rate. And since word-of-mouth tends to travel faster in this day and age, they may even improve your hiring rate. 

If you’re looking for ways to streamline your hiring process, look no further. With Workstream, you can get 4x the number of qualified applicants and reduce your time-to-hire by 70%. Schedule a free demo today to find out how you can start hiring faster—and smarter.