Around four million US workers switched jobs every month between January and March 2022 — translating into an annual employee turnover rate of 30%.

This is a problem that’s going to keep growing. According to the Pew Research Center, one in five workers (22%) are likely to look for a new job within six months.

Employee turnover disrupts operations and employee morale and affects your business’s profitability. In 2021, turnover costs reached $700 billion for employers in the US. Replacing the average employee costs 33% of their base pay.

Tired of hiring, training, and losing employees? Keep reading to learn ways to improve employee engagement and retention — and reduce the drain on your time and your budget.

Employee retention vs. turnover

The terms retention and turnover are often discussed together. What’s the difference? Essentially, retention means keeping employees, while turnover means losing employees. They’re two sides of the same coin — and you want that coin to land on the retention side as much as possible.

It’s important to note that employee turnover isn’t always a bad thing. Sometimes, businesses grow and change, and that affects turnover rates. However, turnover often happens for negative reasons like employee dissatisfaction, and too much of it takes a toll on a workplace.

What are the differences between retention and turnover rates for businesses?

Both turnover and retention rates are worth monitoring, but there are some differences in what they indicate and how they’re used. Here are the three main differences between these metrics.

1. Decision-makers

Turnover can be involuntary (meaning the employee has no choice about leaving) or voluntary (where the employee makes the choice).

Think of how the retail and hospitality industries will hire more employees temporarily for busy seasons. When the season is over, and the temp hires are let go, that’s involuntary turnover. This type of turnover affects a business differently than employees voluntarily leaving for better opportunities.

Usually, it’s voluntary turnover that businesses focus on trying to reduce. Breaking down turnover into different types can be helpful in this regard.

Meanwhile, retention generally can’t be split into groups. It’s a more holistic metric indicating the proportion of employees who stay in their roles over a certain period. By default, the employee and the employer are responsible for this decision since neither has ended the working relationship.

2. How often they’re calculated

Retention rates tend to be determined annually, while turnover rates are often calculated monthly or quarterly. This is crucial for shift-based industries because there are frequent changes in a business’s staffing needs.

3. Purpose

Businesses look at retention rates to see how long the average employee stays at their company and how to increase that time frame. They look at turnover rates to understand how often and why employees leave — and how to reduce voluntary turnover.

6 causes of employee turnover for shift workers

Here are some of the most common reasons employees leave their shift-based jobs.

1. Seeing the job as a stepping stone

Some employees may have different career paths when applying for jobs in industries like retail, hospitality, or fast food. A common example is working while in college and then moving on after graduating.

2. Seeking better opportunities

When there are better opportunities outside of your business, people will leave to pursue them.

According to the Pew Research Center, 60% of workers who left their jobs between April 2021 and March 2022 saw an increase in earnings. Compare this to 47% of those who stayed with their current employers.

Whether it’s better pay or other benefits, sometimes switching jobs seems like the surest way to improve one’s work situation.

3. Disliking the current workplace culture

Workplace culture has a bigger effect on employees than you might think. A bad environment can easily lead to employee dissatisfaction and burnout.

The company culture as a whole and individual-level relationships like those with managers can have a major impact on people’s workplace experience — and their decision to leave. Research shows that 50% of employees leave an employer due to a bad manager.

4. Mounting frustrations

Shift work comes with a variety of problems and stressors, and it can be easy for employees to become frustrated. Whether it’s rude customers or having issues clocking in or out, dealing with these problems daily can wear anyone down.

5. Dealing with shift inconsistency

Inconsistent shifts make it hard for workers to live their lives, especially if they have other responsibilities like school, parenthood, or caring for a loved one.

A Harvard study of 30,000 employees at 120 of the biggest retail and food service companies found a lot of shift inconsistency and unpredictability. Two-thirds of workers got less than two weeks’ notice about their schedules, and many had less than a week’s notice.

Last-minute changes were also common, with 14% of employees having a shift canceled and 70% reporting a time change in their shift in the month prior to the study.

Furthermore, a quarter of employees were expected to be on call, and 50% were expected to do back-to-back closing and opening shifts (shifts that are less than 11 hours apart).

These shift inconsistencies had major impacts on people’s lives and job satisfaction. The same study found a six-month employee turnover rate of 28% within those businesses.

6. Wanting career advancement

Many shift workers want to advance their careers and pursue more challenging opportunities. When no advancement opportunities are available at their workplace, people will look elsewhere.

6 ways to encourage retention at shift-based workplaces

Here are six simple ways to change turnover into retention at your shift-based business.

1. Create a positive work environment

A positive environment can help keep employee engagement and morale up. You can try to implement a better culture on three levels:

Individual
Leadership
Entire company

On the individual level, employees should be allowed to give feedback and address common problems they report. This could include clarifying expectations, improving work-life balance, and formally recognizing hard work. You can collect employee feedback in several ways, including through meetings or a platform like Deputy.

On the leadership level, ensure managers act as leaders, not just bosses. Leaders nurture, motivate, and guide teams in a positive direction, while bosses only delegate and often create resentment.

For the entire company, define what a positive culture means for your business. Without a clearly defined culture, it’s hard to maintain a consistently positive environment or a sense of common purpose.

2. Give employees the best tools for everyday tasks

Businesses can address everyday frustrations by providing employees with the necessary tools to do their jobs. For example, using Deputy gives employees an easy way to clock in and out — even from their phones.

Deputy also integrates with other HR programs to make your job even easier.

3. Provide comprehensive training

Training shouldn’t only occur when an employee starts working for you. It should be an ongoing process. Continue to train employees even after they’ve developed the basic skills to do their jobs.

You can even offer tips that help employees maintain their well-being and work-life balance in the face of shift work. For example, you can advise employees on how to get quality sleep even though they may be working odd hours — this is crucial for second- and third-shift workers.

Of course, the training during onboarding is also essential. Investing time and effort into quality training at the beginning of an employee’s role will help them feel valued and build their confidence.

4. Offer clear career advancement paths

Another way to encourage retention is to maintain open paths for career advancement. When an employee shows interest in a different role, don’t focus on losing them in their current position. Instead, encourage them to look into the role and provide the resources they need to advance.

If they change roles, you get someone eager and loyal to do their new job. If they decide to stay in their current position, they know there are different possibilities for them within the organization.

5. Provide incentives

Incentives are crucial for employee retention. Common incentives include:

Higher pay
Better benefits
Wellness programs
Free food
Better paid time off policies
Comfortable break rooms
Bonuses and rewards

Providing good incentives makes people feel appreciated, increases employee engagement, and makes people more likely to stay with your company.

6. Keep shifts consistent and collaborative

In the Harvard study mentioned earlier, 75% of workers said they want more stable and consistent schedules.

While it’s not always possible to please everyone, try to make scheduling as collaborative as possible. This can mean scheduling around an employee’s personal needs, like parenthood or school, or consistently communicating with employees about scheduling.

Deputy can simplify scheduling decisions for both you and your employees through our easy-to-use scheduling platform with desktop and mobile flexibility. No need to shuffle papers or use static spreadsheet templates while trying to juggle multiple employees’ schedules.

Changing a turnover moment into a retention moment

Here are a few examples of critical moments when an employee can be retained or lost — and how to handle them.

An employee doesn’t get the promotion they wanted

Change this disappointing conversation into a hopeful one by being open and honest with your employee.

If you feel like your employee isn’t ready for a promotion, explain why. Then create a plan, including a training schedule, with actionable steps to better prepare them for the new role they want.

If the promotion was denied due to budget, don’t be afraid to tell them that. While it may not be the answer they want to hear, they’ll appreciate your honesty. Offer to continue training them for the new role so they’ll be a shoo-in when the budget opens up.

An employee is struggling with a coworker/manager

Everyone has a bad day, especially when working with many different people in a single shift. But if an employee is consistently having problems with a coworker or manager, you need to address it.

Talk to both sides individually and see what’s happening. Is it a simple misunderstanding or something bigger? Does the manager need more leadership training? Does the employee not fully understand the work process? Finding the answers to questions like these can be crucial to maintaining harmonious relationships and retaining employees.

In more difficult cases, shift-based businesses have the unique opportunity to solve this problem by having people work different shifts or in different departments. Suggest someone work a different shift (only if the employee agrees) or have them work in different areas during the same shift.

An employee is experiencing a life change

If an employee is going through a major life change like going to school or having a baby, getting them to stay at your company may be hard — but it’s not impossible. Have an open conversation with them to understand their new needs.

Do they need more flexibility with their schedule? Do they need time off temporarily? Are they looking to change careers?

Depending on their needs, you may be able to work with the employee to retain them during this change. If you can’t, then you both leave the conversation feeling good. Who knows — they may come back later on because they appreciate the consideration you showed for their needs.

Improve employee retention with Deputy

Deputy is designed to make shift-based operations easier for both employers and employees. Our software features include simple clock-in and clock-out mechanisms, easy scheduling (including breaks/vacations), demand forecasting, and the ability to collect feedback from employees.

Our platform can improve efficiencies and greatly reduce the everyday frustrations shift work can bring. Take a tour of our features and see how Deputy has streamlined other businesses’ operations.

Disclaimer: The information provided in this publication is for general informational purposes only. Deputy makes no representations or warranties of any kind, express or implied, with respect to the software or the information contained in this publication. While, Deputy’s software is designed to simplify shift work by assisting with hiring, onboarding, scheduling, time and attendance tracking, payroll integration, and wage and hour compliance, it is not a substitute for payroll or legal advice, nor is it intended to relieve you of your obligation to comply with the legal requirements applicable to your business. It is ultimately your responsibility to ensure that your use of Deputy complies with all applicable laws and regulations. Please review our Product Specific Terms for more information about your compliance responsibilities.

How Shift-Based Businesses Can Prevent Employee Turnover