No company ever wants to talk about their turnover, even in industries where turnover is common. The tech industry currently has the highest rate of turnover. While tech employees are normally salary, it’s important for hourly companies to take note of how this industry is fighting turnover. For one small tech company in Massachusetts, the solution was embracing it.
Strategies the Company Uses
Paragus, a small outsource IT services firm in Massachusetts, had a problem. Employees pointed out to the CEO, Delcie Bean, that it seemed like an employee departure was being announced every other year. This was having a discouraging impact on the 30-employee sized company.
While loosing around 13% of your employees is normal in the tech industry (Paragus was looking 10-15%), Bean felt the need to push back against turnover.
He already thought the company had great perks: unlimited time off, a 40% employee stock ownership plan, dogs in the office, etc. But employees were still leaving for bigger employers who could pay them more. Paragus couldn’t match their salaries, although that was the first suggestion.
So, Bean wanted to know what embracing turnover looked like.
Paragus created a Wall of Fame to honor employees who contributed positively to the company. They even began to have farewell parties for employees who were quitting and referred to them as graduations. More importantly, they made it clear during interviews that they would not be able to match the salaries of other competitors, which was the reason people were quitting.
While turnover is still a challenge, Bean saw some interesting changes. Acceptance rates for job offers increased from 90% to 99%. What’s also fascinating is that Paragus is seeing employees who quit reapply. Since 2016, around twenty to thirty employees resign, but around eight have reapplied and returned.
Embracing turnover doesn’t mean ignoring it. It means planning for it and strategizing ways for it to impact your company the least. Employee referral programs like Refered helps you do just that. Refered creates incentives for your employees to stay and recommend other qualified employees, keeping you ahead of the turnover rate. Request a demo today.