Employee Retention Strategy

Employee retention is an important topic for companies, especially since voluntary turnover rates continue to be problematic. The U.S. Bureau of Labor Statistics reports 77.2 million hires in 2022 — yet voluntary quits were at an historic high, totaling 50.6 million.¹

Recruitment, hiring, training, and turnover can cost organizations a significant amount of money. So it makes sense for today’s employers to focus on developing a solid employee retention strategy. Most companies understand the basics of how to keep employees from jumping ship. So, why is it still so difficult for many organizations to develop a strong retention strategy that works? Where is the disconnect between knowing what to do and doing it?

The answer lies in the details. While organizations may grasp the basics of how to attract and retain top talent, they fail to successfully create a culture that bolsters employee job satisfaction. Or they focus too much on a single strategy rather than a diversified approach. Here we’ll explore 5 strategies companies can use to boost employee retention.

1. Promote a positive company culture

A positive company culture where all your employees feel valued and a part of something bigger than themselves can help improve your employee retention rate. Take your time to hire the right employees rather than race to fill vacant positions with any candidate who applies.

Employees who believe they fit with a company’s culture are more likely to perform better and remain for the long term. But how do companies ensure their new hires will match their cultural goals? It begins with the hiring process. Here are a few helpful tips:

• Clearly define the culture and values.
• Communicate the cultural expectations to potential candidates.
• Use personality assessments during interviews.
• Include cultural goals in the training process.

When organizations hire new employees who share the same values and beliefs, it makes the experience better for both employer and employee. Employees searching for more than just a job are more likely to stick around when they fit with the company’s culture.

Make the work environment fun

Incorporating fun into the workday increases employee engagement and leads to greater creativity. This is because it provides an outlet for employees who feel stressed and anxious at work. Often the pressure to succeed and perform creates an environment that can lead to burnout. To offset this, add fun elements to the workday.

• Celebrate birthdays and anniversaries.
• Gather and socialize outside of work.
• Participate in charity work as a group.
• Share meals and treats during the workday.
• Initiate an office sports league.
• Host holiday parties.

Ask employees for other ideas. Enjoyment can go hand-in-hand with hard work, productivity, and success. It also boosts morale, promotes collaboration, and does wonders for positive workplace relationships. In fact, it’s often a positive driver for employees who want to see their organizations succeed.

Encourage work-life balance

A healthy work-life balance is a valuable concept when it comes to reducing employee turnover. Analyze the number of hours your workers put into completing their jobs. If it’s more than 40 per week, how can you reduce it? Can you cut out meetings? Streamline your review and approval process? Perhaps the bottom line is that you need to hire more staff to relieve overworked employees from their existing burdens.

Encourage employees to take time for themselves. Insist they don’t work through lunch hours. Add a competitive PTO policy. Offer remote work options and flexible schedules. Not only can these approaches help employees to decrease their stress levels, but they’ll also be an important consideration for employees thinking about changing jobs.

2. Provide challenges, individual development, and career advancement opportunities

High employee engagement indicates job satisfaction, a factor in high employee retention. And 1 of the biggest drivers of increased employee engagement is pride and ownership of work. Employees who are provided challenges, trusted to work independently, and receive career advancement opportunities are more likely to stay engaged.

Providing ways to help employees learn, grow, and acquire new skills builds an environment where satisfied employees want to work harder and perform better. Here are some tips for getting it done:

• Allow employees to work autonomously whenever possible.
• Avoid micromanaging and overbearing oversight.
• Provide opportunities for growth and development.
• Seek to promote internally before looking externally to fill leadership vacancies.
• Develop a mentorship program.

Pew Research Center reports 1 of the top reasons why people quit their jobs in 2021 was a lack of opportunities for advancement. Professional development opportunities motivate employees to engage, grow, and succeed with the organization.

3. Appeal to employees’ humanity

Many people choose jobs based on more than the ability to collect a paycheck. The best employees will stick around when employers respect and value them as individuals. By placing emphasis on factors relating to their humanity, you can become a top workplace where people want to be.

Trust and transparency

If there’s 1 thing employees highly value in an organization, it’s honesty. If leadership tends to keep things close and lacks transparency, this can breed distrust.

How can companies create an atmosphere of employee trust and respect? The same way they would with anyone else. Include employees in conversations about company goals and intentions. Provide recognition for their efforts. And be transparent and fair about internal issues that can be shared with staff without risk.

Encourage open communication and feedback

Gathering employee feedback helps organizations understand what their teams need. Conduct employee surveys to learn what you can do or change to boost employee happiness and create a positive work environment. But don’t just talk the talk. Walk the walk. The best employees will stick around if they see you care enough to consider their observations and suggestions. Welcome your team members to openly communicate and express their needs, suggestions, or any other input they may have to offer.

Improved management and leadership

Poor management or leadership is a primary reason why people quit. But those leaders who place value on building a reputation for communication, respect, and transparency tend to keep valuable employees. Be mindful in daily decision-making when it comes to the well-being of employees.

4. Offer competitive compensation and benefits

If you are still giving pay raises that barely keep up with the rate of inflation, it’s time to re-think that. Employees expect fair and competitive salaries, along with annual pay raises. Those who receive an inadequate salary or wage may not hesitate to job-hop for better compensation. Is it really a good strategy to recruit, hire, onboard, and train employees for your competitors? Consider what you can offer in terms of competitive pay and benefits.

5. Create a succession plan

Collectively, U.S. businesses spend billions per year on replacing departing employees. Many conventional estimates generally agree that it costs 1-2 times an employee’s salary to replace them when they leave.

Succession planning is a strategy for identifying future leaders in your company and can lead to fewer resignations. Who will take over when those in leadership positions resign, retire, or leave the company for some other reason? The best people to fill these positions will be those you’ve already nurtured for the role.

When employees witness and experience promotion from within, employee retention tends to rise with the employer’s investment in advancing their careers.

Good retention strategies begin with you

Human resource management pros typically understand that increased employee retention and decreased turnover make good financial sense. Yet some organizations misunderstand the value of investing in employee satisfaction.

When something doesn’t work, it’s time to do something different. It all starts with recognizing employees as individuals, appreciating their value, and helping to facilitate an enjoyable work environment. Implement retention strategies that support these fundamentals. When organizations are proactive about their employees, it creates a strong, loyal, and satisfied workforce.

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1 U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey News Release March 2023