AI: Preventing Employee Turnover in SMEs

AI and Employee Retention in SMEs

Employee turnover can be costly for small to medium-sized enterprises. New technologies like artificial intelligence may improve retention rates. The estimated cost to replace the average employee for SMEs is around £12,000, so high turnover can damage operational efficiency.

Around 70% of employee turnover is a voluntary decision, so managing engagement and satisfaction is a challenge for enterprises. HR professionals find countering turnover a frustration that can threaten long-term growth. However, measures can be taken to limit the negative impact of turnover.

Monitoring Turnover Rates

Calculating staff turnover can help monitor emerging trends within your SME and report on current rates. To do this, find the average number of employees for the observation period, excluding temporary or seasonal staff. Add the number of employees at the start of the period to those at the end, then divide by two to calculate the average number of employees.

To work out the turnover rate, divide the number of employees who left the company by the average number of employees. Then, multiply the result by 100 to calculate staff turnover as a percentage.

CIPD suggests that the average staff turnover rate in the UK is 34%. A figure higher than this should cause you to revise your employee retention strategy.

How AI Can Help

Artificial intelligence has paved the way for unprecedented control in improving enterprise staff engagement and satisfaction. The AI boom carries implications for employee turnover, and the technology can help prevent staff from looking for other work.

AI Use Cases

Artificial intelligence can perform predictive analytics to forecast potential staff turnover by identifying trends and patterns faster than human HR professionals. For instance, AI could find a correlation between team leader management approaches and employee disengagement. This can help refine your SME’s management styles to improve satisfaction and offer proactive training or support to your management team.

92% of employees recognise the importance of working for an enterprise that values their emotional and physiological well-being. AI tools can use predictive analytics to monitor work patterns and identify early signs of dissatisfaction before adapting the workloads of affected workers. These predictive insights can help stamp out burnout, boost engagement, and lead to higher workforce productivity.

69% of employees claim that regular recognition from their employers would motivate them to work harder and stay longer. Optimising your appraisal system should be a priority if your turnover rates are too high.

Artificial intelligence tools help improve retention by empowering HR teams to craft personalised engagement strategies that improve the quality of feedback and recognition for employees. These real-time feedback loops can alert management to instances of outperformance. The ability of AI systems to identify and reward employees for their efforts can help create a fair reward system.

Artificial intelligence can also drive more engagement among employees by creating bespoke development plans that match individual skills, preferences, and career goals to a program designed to enhance their strengths and overcome any weaknesses. This can help provide a sense of purpose that can prevent instances of ‘quiet quitting’ or turnover.

Employee training and upskilling can be a key factor in retention. AI’s ability to generate personalised, engaging, and accessible learning experiences can form the cornerstone of a more engaged and productive workforce. By delivering tailored content recommendations based on the monitoring of prospective skill gaps and preferred learning styles, artificial intelligence can deliver relevant and effective training materials. Mitigating these shortcomings can significantly reduce instances of staff quitting SME roles, as skill gaps can be a leading cause of employee turnover.

AI can also deliver interactive experiences and simulated environments that offer far more engagement than simple text-based training. Employees can enhance their skills in between workloads with bespoke models. AI training can help employees feel more valued and equipped to grow within their roles, boosting their contentment and longevity.

Retaining employees can be a challenge for SMEs. However, artificial intelligence tools can help deliver greater efficiency in retaining talented staff for longer through predictive analytics and a personalised approach to employee management, training, and appraisals. More SMEs can improve their employee retention, preventing harmful and expensive turnover rates and building a consistent level of productivity. Embracing AI tools can make a significant difference in shaping your plans, and building an employee-first culture with the help of technology gives you the best chance of overcoming the challenges that all ambitious enterprises face as they continue to grow.