The good news is, managers have the power to make a serious impact on their organization’s ability to retain talent. According to Gallup research, 52 percent of employees who choose to leave a job say their manager or employer could have done something to keep them around. Managers who step up in these make-or-break moments are driving employee retention.
Below we look at actionable steps managers can take to raise employee retention, the potential benefits they’ll enjoy from these efforts and the common causes of employee turnover.
Employee Retention Strategies
Here are some employee retention strategies your business can use to create continuity among your workforce.
1. Provide Professional Development Opportunities
Employees are more likely to remain at a company if they can envision a future where they’ve grown or moved up within the organization. Businesses can set up skills training programs, offer online learning courses and connect employees with mentorships. These steps show workers they’re being invested in for the long haul, convincing them it’s worth it to stick around.
2. Support Different Work Formats
Almost half of U.S. workers would want their next job to be remote, so flexible work is essential for retaining top talent. Work with your HR staff to design policies that support hybrid work, remote work and other flexible arrangements.
3. Offer Compensation Incentives
To keep top performers around, companies can offer compensation structures that increase each rung as one climbs up the organizational ladder. Bonuses for those who stay longer or deliver exceptional performances are other good incentives. Embracing pay transparency also keeps employees in the loop about what their peers are making and what they could earn in positions further along their career path at the company.
4. Build a Strong Benefits Package
A well-rounded employee benefits package is one of the easiest ways to maintain loyalty among your workforce. Perks may include a company 401(k) plan with employer matching, generous vacation time, learning stipends and parking or public transit reimbursements. And since over 90 percent of workers want to work for a company that offers mental health support, organizations may want to consider reinforcing their wellness benefits.
5. Encourage Employee Work-Life Balance
With 47 percent of U.S. workers feeling burnt out, it’s no surprise 53 percent are ready to move on to their next job. Companies can reverse this trend by setting clear work boundaries for in-person and remote workers alike. Establishing specific hours for sending emails and designating one day a week as a no-meeting day are ways to encourage work-life balance.
6. Establish a Recognition and Rewards Program
Companies can ingrain recognition into their everyday culture by organizing a formal employee recognition program. Awards can be given to an employee of the month, an employee who embodies a company value and an employee who reaches a career milestone, among other recognitions.
7. Cultivate Healthy Workplace Relationships
Having a best friend at work makes workers 17 percent more likely to confirm they’re satisfied with their workplace. To create more cohesion among employees, coordinate company outings, happy hours and fun virtual events for hybrid and remote members.
8. Solicit Employee Feedback
If you want employees to see a future for themselves at the company, it helps to let them play a part in shaping that future. Employee engagement surveys are a great way to get workers’ input on how processes, benefits, manager-employee relations and other aspects of the company can be improved.
Why Is Employee Retention Important?
Your organization’s ability to retain talent — to keep great people at your organization and help them thrive — touches virtually every part of your business. Employee retention has the capacity to boost everything from team morale and workplace culture, to revenue and customer experience.
Inevitably, people come and go. The stigma around job-hopping is dissolving. Every organization is going to have some turnover but too much puts you at a business disadvantage. Here are a few ways that high employee retention rates helps a company stay competitive.
1. Boosting Employee Retention Reduces Costs
Job postings, candidate screenings, background checks, possible recruiter pay or referral fees: These are just some of the expenses associated with hiring. Then, your organization will need to make expenditures on training, onboarding, corporate equipment, credentials and more. If your new hire doesn’t stick around, all of that investment is lost. Keeping employees longer means reducing your hiring costs and saving money.
2. Longer Employee Tenure Means a More Productive, Experienced Team
It costs money to rehire for a position — and it also costs time. Hiring, onboarding and training are a time commitment for all involved. Every time an employee leaves, the process starts all over again. On the flip side, businesses with high talent retention rates are more likely to have employees who like their jobs, who are engaged in their work and more productive overall.
3. Higher Retention Indicates a Happier Workplace
When employees choose to stay at their jobs over a long period of time, they have the opportunity to build stronger relationships with one another, strengthening the fabric of the entire organization. On the other hand, low retention might indicate that workers are unhappy, and that can become a vicious cycle of negativity: Every time someone leaves, it leads to more work for the people who stay as they pinch-hit to cover gaps, help new team members get up to speed and more. That can add stress, risk burnout and ultimately spur a domino effect of turnover.
4. A More Experienced Workforce Will Serve Your Customers Better
Teams with long-time employees have deep experience working with one another and deep experience in their jobs and at the company. This earned knowledge and developed skill set bolsters an employee’s ability to provide the best service to their customers. New hires, on the other hand, are still learning the ropes. They lack knowledge of the workplace’s dynamics and they don’t have firm relationships with coworkers and customers yet. It will take them a while to get up to speed and contribute at the same capacity as a seasoned employee.
What Causes Employee Turnover?
Employee retention and employee turnover are two sides of the same coin. To inform your employee retention strategies, consider some of the main factors that fuel employee turnover in the first place.
1. Low Pay: Top talent may decide their true value is higher than what they’re getting paid and go to a company where the grass is greener.
3. Lack of Recognition: When employee recognition is a priority, employees are 56 percent less likely to job search.
5. Limited Flexibility: Businesses unwilling to make room for any amount of remote work may see employees walk out the door in search of more accommodating workplaces.
6. Incompetent or Toxic Management: An employee’s time at a company is largely shaped by their manager, with managers being responsible for 70 percent of the variance in employee engagement.
7. Homogeneous Team: An absence of diversity and inclusion initiatives can result in a mostly homogenous workforce, leaving workers of marginalized groups feeling isolated.
Frequently Asked Questions
What is employee retention?
Employee retention refers to the practice of keeping talented employees from leaving their roles by cultivating a positive work environment.
What increases employee retention?
Professional development opportunities, competitive compensation, flexible work options and strong employee benefits packages are a few factors that can drive up employee retention.
Why is employee retention an issue?
Employee retention is crucial to keeping top talent at a company. Companies that don’t invest in employee retention may suffer higher rates of employee turnover, which can impact productivity, employee morale and company expenses.