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Four ways to combat high turnover

Tackling high turnover is vital to the success of businesses operating in the service industries, write Augusto Giacoman and Deniz Caglar for Strategy+Business

There is a direct link between employee retention and high profitability in the service industries.

Managers spend 10% to 20% of their time on recruiting, onboarding and training new employees, with high turnover equal to two to four months of an hourly employee’s pay. It also has a negative impact on productivity – an experienced employee is up to 50% more productive than a new hire.

Nevertheless, according to PwC’s Augusto Giacoman and Deniz Caglar, business leaders “underestimate the financial and cultural costs of employee turnover” and because they “misunderstand the root causes of turnover” are unable to effectively address the problem.


Giacoman and Caglar have developed what they call “the turnover remedy”, a four-step solution to eradicating high turnover.

1) Smarter recruiting. Some hires have a lower turnover rate than others, e.g. candidates referred by current employees. Incentivise employees to refer appropriate candidates.

Managers must look beyond experience and skills to ensure potential employees are a good fit for the company’s culture.

It is also important to be honest about the nature of the role.

“Companies must avoid wasting resources on mis-hires or they’ll find themselves back in the same spot, scrambling to fill openings,” write Giacoman and Caglar.

2) Comprehensive onboarding. The process of integrating new employees into the company is often “short-changed” – but employees on their way out of the door often cite not understanding what was expected of them or how to execute their tasks and feeling like managers and coworkers didn’t invest enough time getting them up to speed as reasons for quitting. 

Use seven-day, 30-day and 60-day checklists to ensure new employees understand work procedures, administrative requirements and management expectations.

Ensure seamless integration by appointing an experienced member of staff to act as an “onboarding coach”.

3) Continued training. Offer employees the opportunity to learn new skills. “This clearly communicates a culture that invests in its workers and gives them the tools to succeed,” write Giacoman and Caglar.

4) Cultivating good managers. Front-line managers are key to staff retention. Invest in training to make them better leaders who can build trust, inspire teamwork and guide colleagues.


Administer the turnover remedy now, and in the future you will benefit from cost savings and increased productivity.

“Understanding how costly turnover is and what actually drives it, then addressing those specific issues with the turnover remedy, will go a long way toward combating a problem that has dogged the service industry for years,” write Giacoman and Caglar.

Source Article: The Remedy For High Turnover
Author(s): Augusto Giacoman and Deniz Caglar
Publisher: Strategy+Business