Hiring a talent that fits your organization’s culture is tough. However, developing effective employee retention strategies is even more challenging. The days of employers wielding power over employees are long gone. Employees no longer feel obligated to work for companies that do not value them.
For some, the COVID-19 pandemic allows them to redefine what meaningful work means and pursue it. So, employee retention is critical for retaining your high-potential talents and top performers.
As a result, organizations are eager to understand what drives employee retention. A recent CFO survey found that challenges with retaining talent outweigh every other internal risk in 2022. And employee retention isn’t only about offering attractive financial compensation.
In this article, you will learn effective employee retention techniques you can adopt in your organization. In addition, you can get to understand why employee retention is critical for your business and the reasons why employees quit a company.
What is an Employee Retention?
Employee retention refers to an organization’s capability to retain its existing employees. Organizations committed to retaining their employees have policies and strategies to reduce employee turnover. They do it by increasing employee engagement and providing competitive remuneration packages.
Those with high employee retention rates have an edge in creating a more stable and effective workforce. They may also be more likely to reach their organizational goals and attract new talents.
A well-established employee retention strategy serves as a critical differentiator over its competitors. The organization’s ability to retain its talent also impacts its ability to execute its business strategies.
In essence, the longer the employees stay with the organization, the higher its retention rate.
Why Are Employee Retention Strategies Important?
The consequences of employee turnover are far-reaching and go beyond short interruptions. Employees’ responsibilities will usually fall on their colleagues’ shoulders whenever they leave their organization. The increased workloads might result in a decline in productivity levels and an increase in stress.
These overworked employees get frustrated easily, which negatively influences their work performance. Lower employee performance undermines the organization’s product offerings or services. And ultimately leads to poor customer experience and risks harming the organization’s reputation.
Without a proper employee retention plan, your organization cannot expand or carry out its strategy. The organization cannot attract and recruit new talents without retaining the right talents.
An organization may also risk losing its culture and identity which separates itself from competitors. Hence, employee retention is integral to improving the organization’s bottom line and culture.
Here are ten benefits of having excellent employee retention strategies:
- Employees are more committed to the goals of their organization
- Create a healthy, inclusive, and flexible work environment
- Increase camaraderie and strengthen the connections between the employees
- Enhance employee morale and productivity
- Reduce hiring expenses by minimizing hiring rates, training new employees, and sign-on incentives
- Build a skilled workforce of the future that is equipped with the necessary skills and qualifications
- Increase company revenue due to lower hiring expenses, increased productivity, etc.
- Increase employee satisfaction and engagement
- Improve an organization’s brand and make your organization stand out in the market and among top talents outside
- Improve organization and customer relationships creating brand loyalty
15 Examples of Employee Retention Strategies
Exceptional Onboarding and Orientation Program
Employee retention starts on their first day at work. A seamless onboarding process makes new employees feel welcome in their new workplace.
They get the impression that they’re working in a company that cares about them. They will also think that the company is setting them up for success in their role. And this will create a safe environment for them to voice up and learn.
It takes around two years for a new employee to achieve the same productivity level as existing employees. So making them feel at ease and competent from the first day.
Partnering a new employee with a mentor is a fantastic addition to your onboarding program. In a mentoring program, mentors will welcome new employees, provide support, and help them get comfortable. Such a program is a win-win situation for both parties. New joiners can learn the ropes from experienced colleagues.
The mentors may benefit from the new joiners’ fresh perspectives. A mentor-mentee program is also beneficial to your existing employees. It may increase your overall employee retention forecast and employees’ job satisfaction level.
Conduct some research (or engage external consultancy) to define a competitive pay range for your personnel. Make salaries consistent and equitable for all. Ensure that your employees are also fully aware of all the other aspects of their compensation package.
For example, the package may include yearly bonuses, reimbursements, stock options, and allowances. Make the qualification process for this compensation transparent to everyone. It helps avoid any potential confusion and conflicts with your employees.
Perks may help your organization stand out to potential new talents and re-engage current employees. It will also improve your overall employee morale. Some additional perks are hybrid options, flexible schedules, and remote work opportunities.
Furthermore, paid parental leave and baby insurance are a big plus, especially for married employees.
With the lingering COVID-19 pandemic and economic uncertainty, it’s no surprise that over half of employees globally reported feeling burned out. Most organizations know the best tools for combating burnout. These include manageable workloads, two-way open communication, and a positive workplace culture.
Some additional measures may include reimbursements for gym memberships, spas or massages, and insurance coverage for counseling and mental health services. You can also offer your employees access to digital wellness or meditation platforms to improve their overall health.
In every relationship, it’s critical to listen closely to what’s being said and what’s not said. Communication is a crucial determining factor in how a team will function. It encourages team members to communicate, collaborate, and resolve problems whenever they arise.
Make sure to invest time and effort in improving communication skills across departments and job levels. Transparent and open communication helps resolve (and prevent) situations that may cause low engagement and high turnover.
Employees who are disengaged are damaging to your organization. They lower overall employee morale, discourage others from performing, and create a toxic workplace environment. Not giving employees a say in the organization will reduce employee engagement.
Employees nowadays want to have a say in decisions that will impact their careers and the future of the business. Hence, giving them a platform to voice up may significantly enhance retention. Great companies do not stop at listening to their employees.
Instead, they will turn their employees’ feedback into action. Such action will let the employees feel that the management values their feedback.
Training and development
Employee upskilling is crucial now as technology continues revolutionizing our work. Upskilling your talents allows them to obtain new skills to support the organization when direction changes. Make investing in your employees’ professional growth a top priority.
For example, allow them time to participate in virtual conferences or pay for their continuous education. It is also critical not to overlook your organization’s succession planning strategy. Succession planning is a powerful tool for nurturing existing talents to become your future leaders.
Manage to Retain
Managers’ relationships with their direct reports may significantly influence the employee experience. Great managers behave like coaches. They are assertive and focus on bringing out the best in their team members. They show appreciation and offer constructive feedback.
A coaching approach facilitates mutual trust and fosters continuous learning. A great manager will set clearly defined goals and regularly evaluate their team’s progress. This would let employees know where they are and what to do to achieve goals.
Pathways for Career Growth and Advancement
The world of work is rapidly evolving, and employees recognize that they must keep up or risk falling behind. Yet, the concerns coming from employees are a lack of opportunities for career advancement within their organization.
Having a targeted and transparent career pathing can improve employee engagement. So, work hand in hand with employees to establish goals and create a learning and development action plan. Employees will feel confident and secure when they know their future with the company is full of possibilities.
While organizational culture can appear subjective, its effects on employee retention are undeniable. One of the main factors of employee satisfaction is corporate culture. The ingredients of an attractive workplace culture may differ slightly from one organization to the next. But all of them consist of essential qualities such as:
- clear and well-defined company values
- open and transparent communication
- strong commitment to diversity, equality, and inclusion.
- supportive leadership
Continuous Feedback on Performance
Many organizations are forsaking the yearly performance appraisal cycle in favor of more regular team meetings. Discuss your employees’ short and long-term career aspirations in these one-to-one sessions.
You can use these sessions to visualize their future with the organization and how they can contribute to the organization.
You should never make empty promises to employees. Instead, make time to explore potential career advancement possibilities with them. Then, work together to develop a realistic plan for achieving those career goals.
Effective Change Management
Aside from the current disruption caused by the pandemic, any organization must deal with both good and negative changes. Employees look to their leadership team for guidance and confidence during difficult periods.
If your organization is going through a significant transition, keeping your workforce engaged and informed with the latest updates can reduce anxiety and control the rumor mill.
Make major announcements individually or as part of a team call or meeting. Make sure to give time for employees to voice their concerns and ask questions.
Celebration of Milestones, Big and Small
Another method to improve employee retention involves celebrating outstanding achievements. If you decide to celebrate, ensure it’s a meaningful and enjoyable experience for everyone.
Whether your team completes a big project ahead of schedule or an employee hits their fifth work anniversary doesn’t matter. Make an effort to celebrate your team’s every milestone or accomplishment.
Recognition and rewards systems
Happy employees tend to perform better and will stay with the organization longer. Yet more than 80% of American workers claim they are neither acknowledged nor rewarded in their workplace. Building a culture of recognition entails more than simply acknowledging employees regularly.
It warrants specific and consistent recognition. So, ensure your organization has a compelling recognition program to recognize and appreciate your employees’ contributions.
Why Are Workers Leaving And What are Possible Negative Effects?
For many years, the reasons why people leave their jobs remained largely unchanged. It was usually because of a lack of career advancement, poor management, or a new job opportunity. However, the Great Resignation spurred on by COVID-19 has unearthed some fascinating new trends.
Everyone is seeking higher income or jobs with good work-life balance and working conditions. Because it’s now a candidate’s market, everyone is taking this opportunity to quit their existing career and search for better opportunities elsewhere.
Understanding why employees quit their jobs can help you craft a fit-for-purpose employee retention plan.
Below are seven typical reasons why talents leave their jobs:
- Misalignment of organizational values
- Lack of appreciation unappreciation
- Poor compensation package
- Feeling trapped
- Ineffective communication
- Work-life balance
FAQ About Retention Strategies
What is the best way to motivate retention?
There is no one-size-fits-all way to motivate retention within an organization. The Great Resignation spurred on by COVID-19 has unearthed some fascinating new trends of what employees are seeking.
Everyone is looking for higher income or jobs with good work-life balance and working conditions. Some do it by increasing employee engagement, providing competitive remuneration packages, etc.
Case Studies, Academic, and Research-Based Sources:
- Allen, D. G. (2008). “Retaining Talent: A Guide to Analyzing and Managing Employee Turnover.” SHRM Foundation. This guide provides a comprehensive overview of employee turnover and retention strategies.
- Buckingham, M., & Coffman, C. (1999). “First, Break All the Rules: What the World’s Greatest Managers Do Differently.” Simon & Schuster. This book provides insights into management practices that contribute to high employee retention.
- Gallup (2017). “State of the American Workplace Report.” Gallup. This report offers extensive data on employee engagement and retention in the American workplace.
- Pink, D. H. (2009). “Drive: The Surprising Truth About What Motivates Us.” Riverhead Books. This book discusses the role of intrinsic motivation in employee engagement and retention.
- Kotter, J. P., & Schlesinger, L. A. (1979). “Choosing Strategies for Change.” Harvard Business Review.
- Gostick, A., & Elton, C. (2007). “The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance.” Free Press.