5 Top Reasons for Employee Turnover in Staffing Agencies
July 5, 2022
When your staffing agency has a high turnover rate, it can make it difficult to meet clients’ needs and maintain standards of quality. Employees naturally come and go, but sometimes the turnover rate is above the relative average. So, if your turnover rate is more than 20%, it’s time to dig into the potential causes.
Keep in mind that juggling the different needs of temporary workers and more permanent administrative staff can prove complicated. For any staffing agency, there’s a constant flux of temp workers—that’s the nature of the industry. However, you want to be sure the same instability and capriciousness doesn’t occur among your front of house staff.
What’s more, it’s still important to retain your temporary workers until their assignment is completed, and the client is satisfied. But addressing both sides of staffing is challenging.
Whether it’s for temporary workers or admin, read on to learn the top five reasons for high turnover rates and how to avoid them.
If you find your staffing agency has an uncharacteristically high turnover rate, it’s time to investigate the potential catalyst. One of the most common reasons for a mass exodus of employees is poor benefits. In 2021, 43% of workers who quit their jobs cited low or non-existent benefits as the reason.
Ask yourself: do you offer health insurance? Paid time off? Paid maternity and paternity leave? These are just some of the benefits that workers have come to expect in this day and age. This line of questioning applies more to your administrative staff, but it’s gradually becoming more commonplace for staffing agencies to also offer some degree of benefits to temp workers in order to woo them amid fierce competition.
While these offerings may increase your upfront costs, benefit packages will save you money in the long run because employee turnover is expensive. Most estimates put the cost of replacing a single employee somewhere between one half to double an employee’s salary. Therefore, if an employee makes $40,000 a year with your agency, replacing that person can cost anywhere from $20,000 to $80,000.
Employees rightfully expect to be compensated fairly and on time. While an agency may accidentally issue incorrect or late paychecks, this faux pas has the same result as if it were intentional: one survey found that 49% of employees will leave an organization after just two paycheck errors.
Paychecks are especially complicated in the business of staffing, because there are often different pay grades for temporary workers. With the labor shortage, temp workers are frequently assigned multiple roles for the same client. Yet these roles often come with different pay grades and keeping track of them manually can be something of a nightmare.
For instance, a temporary worker might work for $15 an hour as a secretary, but then $10 an hour in the mailroom for the same client in the same office. Calculating this all can prove arduous.
Luckily, with the help of our innovative time and attendance software, you don’t have to figure it out on your own. Whether it’s through smart kiosks or mobile apps, our clock-in-clock-out software tracks employees across different roles and pay grades to automatically calculate pay for you and issue faultless, timely paychecks to staff.
Few opportunities for advancement
Workers want to see how they can grow in a company, which allows them to set goals and aspirations. However, oftentimes employees find themselves stagnant in a role that lacks opportunities to climb up the corporate ladder, so-to-speak. Around 63% of workers who quit their job in 2021 listed ‘no opportunity for advancement’ as the primary reason.
As a staffing industry leader, it’s your job to structure your company in a way that allows promotion and advancement. By setting and outlining clear expectations, your employees can know exactly what they need to do to excel, and how they can be rewarded for excellent work. Be sure to outline opportunities for pay increases and chances to learn a new skill set, along with offering new managerial positions.
Lack of flexibility
In the aftermath of the pandemic, remote working has become the new norm. Approximately 74% of working professionals expect remote working to remain the standard across industries. Stubborn employers unwilling to acquiesce to demands for more flexible working options will likely find themselves understaffed.
If you insist on retaining an in-person office, which may be a good idea to host client meetings, consider offering a hybridized option: two days from home and three days in the office or vice-versa. You can even set a rotating schedule in which employees are in-person or at-home on any given day of the week. Employees want a better work-life balance, and when they can achieve it, they’ll be more motivated and more dedicated to work. No more burn out.
Stone Age technology
It’s crucial to keep your staffing agency up to date with the latest tech developments to stimulate employees and provide learning opportunities. Remember, businesses with high employee engagement experience 23% more profitability and 43% less turnover on average.
And what’s the number one key to engagement? New technology and on-the-job training. Companies that insist on using outdated technology—or heaven forbid, paper and pen—face an uphill battle.
With Generation Z now set to enter the workforce in droves, it’s time to take the leap to bring your staffing agency into the 21st century, or you risk losing your youthful employees only months after you’ve hired them.
Remember, it’s currently a buyer’s market—there are more vacant jobs available than workers willing or able to fill them. If you don’t meet this suite of expectations, your personnel will inevitably find another staffing agency that will challenge and compensate them adequately.
The competition for labor is tough out there; don’t make it harder on yourself.