Taking measures to battle employee turnover is an important way to optimize your organization's operations and make the most of your time and money. Retaining the right talent for your company starts with offering competitive benefits and meeting your employees' needs.
For organizations looking to keep their workers longer, implementing same-day pay can encourage staff loyalty and benefit your team.
Learn more about staff turnover and how to effectively fight it by giving your employees earlier access to their wages.
What Is Staff Turnover?
Staff turnover is the measurement of employees that part with an organization over a specific period.
It can be costly and problematic for organizations of all sizes when they experience high turnover rates. In 2021, the annual total turnover rate was 47.2%, meaning nearly half the workforce in the United States parted ways from their job as a result of one of the following:
These separations fit into two categories — voluntary or involuntary turnover. Voluntary turnover refers to instances where a worker chooses to leave an organization by quitting their position or going on retirement. Involuntary turnover occurs when an employers ask a worker to leave the organization through firing or layoffs.
To calculate the turnover rate as a percentage for a company, follow these steps:
- Begin by taking the number of employee separations.
- Multiply how many current workers your facility has by 100.
- Divide that number by the total separations for the separation rate.
What Causes Staff Turnover?
A few key factors commonly contribute to voluntary staff turnover, including:
Money and benefits are the primary reasons people abandon their jobs. Earnings are a major motivator for workers in many industries, and people want to feel valued by the organization they work for.
Whether they feel unfairly compensated or are looking for another position with higher pay, money is often the reason people feel uncertain about the longevity of staying in their role.
Having bad hiring practices and inadequate management is a recipe for high turnover rates. Bringing the wrong people onto your team can cause a plethora of issues. It is expensive and time-consuming to train new employees, and that money can go to waste if new hires leave early in their employment.
Without good managerial organization and hiring practices, staff morale is likely to plummet, and current employees may feel strained from the turnovers.
No Opportunity for Advancement
It is important for staff members to see their future with a company. When a worker starts feeling complacent in their role, they are more likely to look for other positions where they can grow and further their career development.
People yearn to learn. They want to participate in programs and jobs that teach them new skills or help them sharpen old ones. If they feel they cannot advance in their job, they will likely walk away from it.
Little Work-Life Balance
Thirty-nine percent of people who quit their job say that working too many hours was their primary reason for doing so. Poor work-life balance can leave workers feeling like they have little control over their life, leading to turnover.
Feeling overworked contributes to higher levels of daily stress that lead to burnout. This motivates employees to find less demanding positions and prioritize flexibility.
Undesirable Work Environments
In 2019, businesses in the United States lost $223 billion because of turnover fueled by company culture. One in four employees also noted they truly dreaded going to their job every day. Having an undesirable workplace is a key motivation for why people leave.
Toxic work environments cause workers to feel disrespected and undervalued. Some people even take positions with lower pay to avoid having to endure unfair or uncomfortable work conditions.
Importance of Staff Retention
Retention is an important factor for every organization to consider. Staff turnover is not just inconvenient for businesses. It has real negative implications.
When an employee walks away from their job, they take their industry knowledge and skills with them. Organizations lose the money they invested in recruiting, hiring and training workers. The employer often has to spend more money to find an adequate replacement. Not only can turnover cause businesses to lose a lot of money, but it also wastes precious time and compromises productivity.
Bringing on new employees requires a good deal of time. Companies have to attract and recruit potential candidates, then go through the interviewing process. Once they make a new hire, they then spend time training the employee and helping them to learn the ins and outs of the company. If that worker decides to leave, the time spent on them is often a waste.
To make matters more complicated, turnover can interrupt day-to-day operations and interfere with staff productivity. Other workers are left to pick up the slack and learn to work with new individuals.
High turnover rates can negatively impact employee attitudes and cause feelings of uncertainty. These factors can cause teams to produce lower quality work and compromise the organization's overall culture. Employee retention is important for saving time and money while also boosting worker outputs.
How to Reduce Employee Turnover
If your organization is wondering how to reduce staff turnover, consider the following ways to boost worker retention.
Implement Workforce Management Software
Workforce management software can transform your organization's human resources operation, giving you the structure and support to optimize everything from recruiting to payroll.
This type of software can help your organization stay organized and automate repetitive tasks so your management team can focus on finding and keeping the right talent.
The scheduling capabilities give your team more flexibility. You can optimize schedules and plan ahead. Reduce employee stress by offering shift schedules as far in advance as possible. This gives workers enough time to swap shifts or request time off without causing operational disruptions.
Ask for Honest Feedback
It is so crucial for organizations to have open communication between management and staff. Asking employees for their feedback is an important way to show you value their opinion and work. People want to feel seen and heard by their employers.
Look for ways to make work more stimulating and engaging for your team. Introducing programs for employee development and learning can be very beneficial. A key to employee retention is offering a clear path to advancement. This helps create a culture of growth and honesty essential for the success of any organization.
Offer Innovative Pay
Beyond meeting industry standards for compensation, it is helpful for companies to offer annual pay increases to boost employee retention. Boosting compensation for certain skills is another way to attract new talent and offer competitive wages.
Implementing a management process that identifies your top performers so your organization can pay them accordingly is another effective way to inspire employee loyalty.
Offering same-day pay is a benefit that can inspire workers to stay at the job for longer. Its convenience lets employees access their earned wages whenever they want, giving them flexibility and reducing stress.
How Same-Day Pay Boosts Staff Retention
Same-day pay is a great way to incentivize your staff and give them the flexibility of having around-the-clock earned wage access.
What Is Next-Day Pay?
For years, most companies have paid their employees on a semimonthly or biweekly schedule. With these payment plans, workers receive their paychecks every couple of weeks. Now, you can give your team access to the money they earn almost instantly with same-day pay.
Same-day pay has a lot of other names, including:
- Next-day pay
- Instant pay
- On-demand pay
- Daily pay
- Advance pay
- Expedited pay
- Early wage access
With expedited pay, employees work and get paid the same day — no more waiting weeks to get their next paycheck.
Not having access to earned wages can be stressful for workers. Whether they live paycheck to paycheck or not, it is a major benefit for employees to have 24-hour access to their earnings. Unexpected life events or emergencies can pop up at any time and leave workers needing their hard-earned money. Daily pay makes this possible and is an effective way to boost employee retention while giving back to your team.
How Does Daily Pay Work?
Advance pay works by allowing employees to request access to the money they've already earned but have not received yet. For organizations to offer daily pay, they have to include same-day pay capabilities in their payroll systems.
Payroll software integrates with business bank accounts to allow employees access to their earned wages. Some companies set a predetermined percentage of daily earnings on the same day the work is complete. Any amount of money withdrawn as part of daily pay is deducted from the rest of the employee's regularly scheduled payments.
Benefits of Same-Day Pay for Employees
Introducing same-day pay to your staff can have many benefits for your employees, including:
In 2021, as much as 61% of the United States population lived paycheck to paycheck. And this is not exclusive to those who find themselves near the poverty line. Of workers earning six figures annually, 42% were living off each paycheck as they received it.
Living this way is stressful, and it can be very alarming when unexpected expenses come up. When workers can access their earnings on-demand, this takes away some financial pressure and reduces stress.
Same-day pay can combat the negative attitudes and distractions caused by financial issues since employees can enjoy having more control over their earnings.
People value flexibility, especially when it comes to their money. By allowing employees to access their earned wages whenever they want to, your organization can help boost financial flexibility.
Financial flexibility refers to the capacity to live beyond paycheck to paycheck by managing expenses. Same-day pay makes it easier to do things like pay bills on time or cover unforeseen expenses. Early wage access helps employees to take ownership of their finances and find ways to make everyday life more affordable.
Next-day pay can be a powerful incentive for employees. Not only do workers have a heightened awareness of their earnings, but they also are more likely to understand the value of a day's work. This means they will be more inclined to think twice about taking the day off.
The instant gratification of working and receiving one's earnings right away can lead to fewer employee absences. Likewise, workers will consider the benefit of having same-day pay before looking for a new job.
Increased Job Satisfaction
Pay is a huge factor in job satisfaction. Giving your team same-day pay capabilities is a great way to make employees more content with their work. Earn wages access can show your staff how much you appreciate and value their time.
If your organization is not in the position to offer workers competitive wages, introducing on-demand pay is a great alternative. This gives your team financial benefits without digging deeper into your organization's pockets and compromising employee retention.
Increased job satisfaction is motivating and can boost employee morale, leading to a healthier and more productive workplace culture.
Benefits of Same-Day Pay for Healthcare Facilities
In addition to benefiting staff members, introducing early wage access can be helpful for businesses too. The following are three of the primary advantages of same-day pay for employers:
1. Attracting, Hiring and Retaining Talent
Offering employee benefits like on-demand pay shows talent you care about your workers and their well-being. It is a great way to boost efforts to attract new candidates for open positions. Your organization is also more likely to retain employees who have access to same-day pay.
From hiring efforts to keeping talent for longer, innovative pay practices can transform your business and help you build the best team possible.
2. Better Patient Experiences
When your facility's workers are content with their jobs and have immediate access to their earnings, they can stress less about finances and focus more on the people they work with.
Patients can benefit from having consistent staff members that are happy with their employers. Increasing morale will benefit the entire team and uplift your company as a whole.
3. Boosted Staff Productivity
Financial stress makes it almost impossible for employees to give their best effort and concentrate fully on their work. By reducing stress, you can also reduce distractions and improve focus.
Employers benefit from having a more productive staff. From getting more work done to improving company culture, boosting productivity is a great way to reach further success as an organization.
Try a Demo of SmartLinx Workforce Management Solutions
Staff turnover is a serious challenge for healthcare facilities that rely on their team to care for patients and keep operations running smoothly. Taking steps to combat high turnover rates is essential for creating a work environment your team is excited to be part of.
Offering on-demand pay is a great way to boost staff morale and improve retention. SmartLinx partners with Rain to offer an easily integrated software solution that allows you to share instant same-day payments with your team. We help you enjoy frustration-free payroll management and minimize your payroll hassles.
Are you interested in learning more about SmartLinx? Request a demo today!