Employee turnover is a drain of resources for any business and is a problem across industries. The average turnover rate across all industries is currently 10.6%. And with the average cost of replacing an employee being 1.5 times their salary, it's no wonder that reducing turnover is a top priority for many business leaders looking to both improve company culture and save costs.
While there are numerous strategies companies can employ to decrease turnover, one of the most effective is outsourcing HR functions to a reliable partner.
In this blog post, we'll discuss how outsourcing HR can help decrease turnover by expanding the benefits your company offers, improving the leadership in your organization, and streamlining onboarding and recruitment.
Outsourcing HR functions can drastically improve the employee experience and help reduce turnover because it helps you elevate what you offer your staff and support them with their lives outside of work. Let’s look at some of the ways you can achieve this benefit.
For many small and mid-sized businesses, offering quality benefits such as healthcare or retirement plans can be cost-prohibitive. However, HR outsourcing can make this more affordable. A reliable HR outsourcing partner can provide access to a broader range of employee benefits, enabling your company to offer better options to your staff than if you were to manage HR functions internally, helping you remain competitive within your industry and providing employees with a greater reason to stay with your firm long-term.
Your HR partner has better access to comprehensive healthcare and retirement benefits, which you can offer while under their umbrella. Their benefits give your employees the choice of which benefits they want. They also remove any concern your business leadership may have about having enough employees (and enough signing up) to qualify for these better benefits.
In addition to improving employee benefits, HR outsourcing can also offer guidance to improve your recruitment strategy and leave better first impressions. If you start on strong footing, candidates will view your company more favorably and as a great place to work – making them more excited to work there for an extended time. An experienced HR partner will have the skills and expertise necessary to coach your internal HR team to vet candidates thoroughly and ensure that you're hiring for cultural fit and experience. By ensuring that employees are a good fit from the beginning, you can reduce the chances of them wanting to leave your company shortly after being hired.
Once choosing a candidate, they can handle onboarding easily and virtually, helping them complete all the necessary paperwork before their start date and freeing up your internal team’s time to plan for their start so they can quickly become productive members of the team.
Finally, HR outsourcing can provide companies with crucial guidance on compliance issues – and, in many cases, uphold this themselves by managing payroll. This is particularly important for small and mid-sized businesses, as they often lack the internal resources to adequately address these issues or even keep up with any changes. Regulations are constantly being updated, or new updates begin rolling out, and that pace of change is too much to keep up with when your priority is growing your business.
HR outsourcers are compliance experts and keep up with changing regulations, putting them in the perfect position to help ensure that your company meets baseline compliance standards. This will reduce the risk of legal issues or fines that could arise from employee complaints. They can alert you to any upcoming changes, coach you on what internal processes to update, or implement them without you needing to worry at all.
Aside from offering great benefits and leaving a better impression, it helps employees stay. Let’s look more into why this is so helpful. Quality benefits reduce turnover, enhance the work experience, and create a strong incentive for employees to stay – because it makes the cost of leaving greater. When considering a job change, employees evaluate what they’ll gain versus what they’ll lose. If their current role gives them quality benefits, such as good healthcare or parental leave, employees may be less inclined to leave for a position that does not or even begin looking for a new job.
This is especially true for employees who are starting families. Quality healthcare and parental leave policies can influence their decision to stay with their current employer.
If your company is unable to compete with larger firms on salary, investing in better benefits can be an excellent way to keep valuable employees from leaving. For many people, quality benefits are more important because they equal out to cost savings down the line. A higher salary but more out-of-pocket health costs for their family doesn’t increase their purchasing power.
Quality benefits also improve job satisfaction and employee morale by making them feel cared for and supported. Employees who feel cared for are much more likely to feel appreciated for their jobs, which can be an influential factor in their decision to stay with your company.
While quality benefits are crucial, effective leadership's role in employee retention should not be overlooked. Employees often don’t leave their jobs—they leave bad leadership.
The cost savings HR partners can incur with better benefits and time savings by handling tedious tasks such as payroll and benefits administration. HR partners can free internal HR teams to focus on improving employee engagement and facilitating leadership training. A good HR partner will have the expertise necessary to guide companies as they train leaders with effective management techniques. The additional time that gives your internal team lets you focus on your leadership. Those cost savings can then be invested into training measures to keep your leadership sharp.
Good leadership and management help improve engagement as much as quality benefits do. The support you can provide from the highest levels of leadership will seep into all levels of your employees, creating a better environment for everyone.
Questco is an experienced HR outsourcing partner specializing in helping companies reduce turnover and improve the employee experience. Our team can help your company implement effective benefits strategies, provide essential compliance guidance, and train leaders to be supportive and effective.
From healthcare to retirement plans, our benefits offerings are tailored to meet the unique needs of your company and its employees. We can also assist your internal HR team with improving employee engagement and overall satisfaction.
If you want to start reducing turnover and improving the employee experience at your company, reach out to us today!