No one likes it when an employee leaves a company, least of all the manager, but treating the symptoms of turnover has become a steady reality for finance teams looking to combat and reduce the rate at which people leave their organization, with the trend increasing rapidly. It’s not easy to deal with, but employees leave organizations for a variety of reasons, and as the leader of a finance team, you probably see it a lot. Maybe they were offered a salary they couldn’t refuse. Maybe they decided to switch careers. Perhaps they were moving to another town or even out-of-state. Whatever their reason may be, it can feel like a punch in the gut to employers who invest their time and money into an employee over the course of their tenure. Nothing is truer in the accounting function of corporations across the country, and for the executives who run those teams.
Moreover, frequent turnover leaves companies with the lingering thought of ‘What could we have done better?’ So, when the dreaded revolving door starts, how can organizations reduce turnover? Read on for a more in-depth look at what causes turnover, the effects turnover has on a company, and how to retain more employees by diminishing turnover rates.
What Happens When an Organization Experiences High Turnover?
In a perfect scenario, employees find value in their jobs and hold their companies in high regard. Likewise, employers pay their employees a fair wage, offer career advancement opportunities, foster a positive work culture (including frequent team outings), and give their employees the option to choose where they work (in-office or remote) and when they work (flexible hours). Seems like a no-brainer, right? However, not all companies offer the utopian work environment most employees so desperately seek; and more times than not, organizations are limited on what they can afford their employees. Let’s dive in and see why employees are fleeing companies in droves with accountants leading the way.
Read More: Retaining Accounting Talent: How To Make Your Team Stay
Why Does Accounting Turnover Occur?
You hired the perfect person for the open position in your accounting department, or so you thought. They checked off all your requirements, accepted the role without hesitation, and finished the onboarding process without a hitch. No concerns from either party. But, as the months go on, you notice them start to disengage from their work. They’re no longer meeting deadlines, they’re declining happy hour invites, and they’re leaving work earlier and more frequently. Still, you’re not overly concerned – they’re showing up for work. You take that as a reassuring sign that this person is still invested in the company and their position.
However, by the following Monday, there’s an unread email in your inbox from them – a resignation letter. You’re baffled, confused and probably way more stressed than you were five minutes ago, but accept the notice nonetheless. The worst part is that now, it’s time to start the recruiting process over for a second (or third, or fourth) time, posting the job, going through resumes and scheduling interviews—again. And all the while you’re holding out hope that your next hire stays a lot longer than their predecessor.
But as much of a difficulty that staff turnover can be (especially for finance leaders), it is not uncommon for companies. In fact, 22 percent of accounting staff said they don’t intend to stay in their position over the long term. And with Gen Z entering the workforce as accountants, this number will only increase over time. Younger generations are looking for a workplace that provides it all, and let’s face it, if you don’t offer it, then someone else will.
Hiring Gen Z? Find out everything you need to know: Gen Z Is Entering The Workforce — Are You Ready For Them?
Reducing Turnover With a Strong Company Culture
Nothing says ‘sayonara’ quicker than a toxic workplace. And a toxic workplace is just that – toxic; it seeps through you like a bad taste in your mouth. Toxic work environments can lead to employee burnout because it’s a never-ending cycle. A quick solution to this problem is to foster a positive work environment that promotes an open-door policy from the start.
Another factor that can lead to employee turnover is a lack of work-life balance. If you’re pinging members of your team after work hours and expecting them to be at your beck and call, don’t be surprised when they feel checked out of work. Instead, show your employees that you care by focusing on their mental health: offering paid time-off and flexible working hours.
There’s nothing more frustrating to an employer than hiring someone who says they know how to do the job, but when push comes to shove, they prove otherwise. Comparatively, there’s nothing more maddening for an employee who begins working for a new company, only to find out their job responsibilities are vastly different than what was said during the recruiting process. The good news is that it’s easily fixable going forward. Being transparent about expectations for a role during the hiring phase is one way to address this problem.
Nailing the Beginning of the Employee Relationship
A negative onboarding experience can paint an undesirable picture of the company from the get-go. If an employee has a less than superb onboarding experience, chances are, they will leave the company before you can get a return on your investment. Furthermore, 69 percent of employees are more likely to stay at the company for three years if they experience a good onboarding experience.
But even if you start the relationship right, you can still lose your team member over a lack of learning opportunities and a positive growth trajectory within your reporting structure. Most employees want the opportunity to grow either in their position or with the company – whether that’s a vertical move or a lateral move. In fact, employees are three times more likely to look for another job if they feel the organization does not support their career growth. A lack of growth opportunities can send your employees into the arms of another organization and leave you to clean up the mess.
Read More: Lowering Attrition: The Top 5 Elements of Employee Retention
Effects of High Turnover in Accounting & Why You Should Combat it
More people are leaving their accounting teams because of the aforementioned reasons. It’s easy to get disheartened by the never-ending loop of turnover and repetitive nature that comes from hiring the same position over again. While most accounting managers would consider the stack of work piling up to be their biggest concern after an employee leaves, that may not even be the worst of it. Here are three other (negative) effects of high turnover.
Replacing an employee is expensive and can cost a company thousands of dollars in recruitment and training expenses. The organizational costs of employee turnover are estimated to range between 100 percent and 300 percent of the replaced employee’s salary.
When colleagues leave an organization for reasons other than moving or personal, it begs the question of ‘why?’ Employee morale deteriorates to an all-time low because other team members are having to pick up the extra responsibilities (on top of their current ones), which inevitably leads to a loss of productivity and eventually, those employees are more inclined to leave as well.
If a job seeker does their homework correctly, it can be bad news for a company that experiences high staff turnover. With insights tools such as Glassdoor, it’s easy to get the inside scoop about a company – from company reviews to salary reports and more. This can hurt a company’s ability to attract the right talent over time.
How to Combat Employee Turnover
Will companies ever escape the revolving door of turnover that leaves vacant positions in their wake? Probably not entirely. According to Accountemps Executive Director, Michael Steinitz, employee turnover is always going to happen. But just like there’s a war on talent in accounting, there’s also battles to be won in retaining that talent. Scroll down to learn about a fail-proof way to curtail turnover.
Create an Onboarding Strategy They Won’t Forget to Combat Turnover
Onboarding is more than just getting a new hire acclimated to the company – it’s an ongoing process that begins before the employee starts their first day on the job and ends the day they leave the organization. Look at this staggering report that shows that one in five new hires are unlikely to recommend an employer to a friend or family member after their new hire onboarding experience. If that makes you cringe, it might be time to rethink your onboarding strategy, or create one for the very first time.
Hiring a Virtual Team? Read this: How to Onboard Your Virtual Employees For Long-Term Success
The key to designing a stellar onboarding strategy begins with thinking like a new hire. What would they like to get out of the onboarding process? From there, begin developing a roadmap that outlines what they can expect each day, month, and even at the one-year mark. By making sure that your new hire’s onboarding experience is positive, you can guarantee the following benefits for your accounting team:
Virtual Accounting Talent: A Proactive Approach to Reducing Turnover
We’ve talked about how to combat turnover and improve your onboarding experience, but here’s a different approach: partnering with a virtual accounting support provider. Why go through the hassle of trying to reduce your turnover rate with traditional in-house methods when you can safeguard your company by working with a virtual accounting talent provider like Personiv?
Turnover doesn’t have to be commonplace with your organization when you set up a winning strategy and follow all the steps to combat it. Get in touch with one of our experts to see how we can help alleviate those hiring pain points for you.