I recently had an interesting discussion with a prospective client about an issue that plagues many organizations: high turnover among non-exempt employees. The organization was struggling to retain talent in critical roles, and compounding the problem was a shortage of applicants for positions.  Her experience is not unique; organizations across industries are grappling with similar challenges in retaining non-exempt talent.

What struck me during our conversation was the client’s deep understanding of her organization and her unwavering commitment to finding solutions. Her team’s internal research identified a strong correlation between high turnover and the low wages paid to non-exempt employees. While compensation is undoubtedly an important factor, focusing solely on wages risks overlooking other critical drivers of employee retention. Our discussion revealed that addressing turnover requires a multifaceted approach—one that balances competitive pay with strategies to foster engagement, career growth, and a positive work culture.

Generally speaking, turnover rates for non-exempt employees are often influenced by external factors such as better pay, more comprehensive benefits, or easier commutes offered by competing employers. However, internal factors should not be underestimated. Creating a positive work culture where employees feel valued, recognized, and engaged can lead to improved retention and foster a more loyal workforce.

Take, for example, industry leaders like Trader Joe’s and Costco. These brands have built reputations not only for their customer experience but also for their employee-centric cultures. They pay competitive wages, provide robust health insurance, offer flexible scheduling, and invest in training and employee recognition programs. These strategies contribute significantly to lower turnover rates and higher employee satisfaction. It’s no surprise that these companies consistently rank among the best places to work in their respective industries.

While there is no “silver bullet” for reducing turnover among non-exempt employees, there are actionable strategies that organizations can implement to improve retention. Here are some key considerations:

1. Competitive Compensation and Benefits: Ensure wages are in line with industry and local standards.  Consider additional benefits such as healthcare, retirement plans, and paid time off. Competitive compensation demonstrates that the organization values its employees and their contributions.
2. Flexible Scheduling: Offering flexibility in work schedules can be a game-changer for non-exempt employees, many of whom juggle multiple responsibilities.
3. Employee Engagement Programs: Recognition and appreciation go a long way in fostering loyalty. Celebrate milestones, reward high performance, and create opportunities for employees to voice their opinions and provide feedback.
4. Career Development Opportunities: Invest in training programs, mentorship opportunities, and clear career paths to help non-exempt employees envision a future in the organization. When employees see opportunities for growth, they are more likely to stay.
5. Fostering a Positive Work Culture: Build an environment where employees feel respected, heard, and valued.
6. Data-Driven Decision Making: Conduct internal research to understand the root causes of turnover. Use surveys, exit interviews, and retention metrics to gather insights and inform strategic decisions.

Addressing high turnover among non-exempt employees requires a comprehensive approach that combines fair compensation with a focus on culture, engagement, and growth opportunities. Organizations that invest in these areas not only improve retention but also build a stronger, more motivated workforce.

As I reflect on my conversation with the prospective client, I’m reminded of the importance of addressing turnover as a shared responsibility between leadership, HR, and operations teams. By fostering collaboration and embracing change, organizations can create environments where non-exempt employees thrive, leading to lasting success for all stakeholders.

It’s also worth noting that retention strategies should not take a one-size-fits-all approach. Non-exempt employees often have distinct priorities compared to their exempt counterparts. For non-exempt employees, competitive compensation, flexible scheduling, and tangible recognition may take precedence, as these factors directly impact their day-to-day lives. Exempt employees, on the other hand, may prioritize opportunities for strategic contributions, long-term career growth, and leadership development.

Acknowledging these differences allows organizations to design retention strategies that are both equitable and effective. By addressing the unique needs of each employee population, businesses can foster loyalty, enhance engagement, and ultimately build a more resilient and motivated workforce.