Employee churn is a significant challenge for organizations striving to maintain growth and profitability. In fact, the cost of replacing an employee can range between 1/2 to 4 times their annual salary
As you can see, the impacts of employee churn have massive impacts on a business’s bottom line. Fortunately, CRM can help.
In this article we explore the issues that cause employee churn and outline ways that CRM can help you overcome these challenges and improve your employee retention.
What is CRM?
A CRM (customer relationship management) platform is a software toolset that assists businesses with managing their people (customers and employees), work processes, products, and projects on a day-to-day basis.
Once thought of primarily as a tool for the sales team, CRM has evolved to address the needs of many different business aspects, including marketing, customer service, and HR.
Through the use of advanced automations tools and data centralization, a CRM system can help businesses improve communication (both internal and external), work more efficiently, and track performance.
What is employee churn?
Employee churn — sometimes referred to as employee attrition — refers to the rate at which employees leave a company over a given period of time. Employee churn includes voluntary departures, such as resignations or retirements, as well as involuntary departures, such as terminations or layoffs.
High employee churn can negatively impact recruitment efforts, institutional knowledge, productivity, and employee morale. Addressing the factors that contribute to employee churn is critical to building a stable and productive workforce.
Top 3 causes of employee churn
Employee turnover can be influenced by various factors, both internal and external. We’ll focus on the most common internal issues here since those are the factors you can control.
- Poor management- Poor management can contribute to a lack of clear direction and goals, leading to confusion and uncertainty about your employees roles and responsibilities
That said, poor management is rarely the fault of the managers themselves and is more often a result of disorganized process and misalignment across departments.
Consider these findings from a report by Oracle — Managers account for 70% of the variance when it comes to employee engagement scores but managers themselves suffer from high levels of burnout and low engagement.
- Poor communication- Poor communication between management and employees can result in misalignment around responsibilities, priorities and expectations.
This can be a motivation killer and is one of the top causes of employee attrition. In fact, according to an article in the Harvard Business Review, more than 80% of employees would rather work for an organization that values open communication than one that only offers perks like free meals and great health plans.
Common causes of poor communication include:
- Inconsistent messaging
- Limited access to information
- Lack of clarity and transparency
- Insufficient feedback mechanisms
- Inadequate communication channel
- Ineffective training and development- Inadequate training can leave employees feeling unprepared and unsupported, leading to frustration and dissatisfaction (to say nothing of the consequences to your customer).
What’s more, a lack of development opportunities can hinder employees’ ability to advance in their careers within the organization which can hinder motivation and buy-in.
Check out some of these stats from a report by Lorman:
- Employee retention rates increase 30-50% for companies with strong learning cultures
- 86% of millennials wouldn’t leaving their current position if training and development were offered by their employer
- 76% of employees say that a company would be more appealing if it offered additional skills training to its staff
- 76% of millennials believe professional development opportunities are one of the most important aspects of company culture
Using CRM to reduce your employee churn rate
CRM can help you significantly reduce employee churn by providing your team with the tools and resources they need to thrive.
- Improved internal communication- CRM platforms improve internal communication and collaboration among team members and departments by providing a centralized platform for sharing information, tracking progress, and coordinating activities.
Plus, real-time updates and notifications for stage changes or approvals help employees stay informed about customer statuses and ongoing projects. This can greatly reduce process bottlenecks.
Additionally, with role-based access controls, your information can be protected in accordance with strict industry guidelines such as HIPAA. Of course these same tools can also protect your own proprietary information as well.
- Performance tracking and recognition- CRM platforms can help you track KPIs, such as:
- Sales targets
- # of calls/meetings
- Lead conversion rates
- Average resolution time
- Customer satisfaction scores
This provides your employees with visibility into their performance and progress. It can also help you create more effective compensation plans that actually motivate your team and drive results.
For more on creating better compensation plans check out our article, Rewarding Sales Success: SPIFFs vs. Commissions.
- Training and development opportunities- CRM platforms can be used to track employee skills, training history, and performance feedback, enabling you to identify training needs and provide personalized development opportunities.
Additionally, a CRM platform can store all your training materials, resources, and documentation, allowing employees to access tutorials, videos, or manuals quickly and easily.
FreeAgent CRM is the best CRM for reducing customer and employee churn
FreeAgent CRM is a modern work management platform that provides top-of-field software tools for organizations of all sizes and technical proficiency.
FreeAgent is the best CRM for reducing churn because FreeAgent is:
- Easy to use- FreeAgent’s modern user interface is quick to learn and easy to use, encouraging teams to work within the platform and providing you with a comprehensive and accurate accounting of sales activities.
- User-configurable- With FreeAgent, the power is in your hands. You can customize and personalize FreeAgent to fit the specific needs of your business and teams without external support.
Plus, FreeAgent offers:
- Robust integration- FreeAgent’s flexible toolset and extensive integration library support teams and businesses of all types and structures.
- Generative AI- Uplift your work with Generative AI-powered features. With FreeAgent, you can access AI across any app, allowing you to get the information you need faster.
With FreeAgent, it’s really that simple.
To see FreeAgent in action, get a demo, and discover for yourself how we are leading the way to a better workday.
