In order to succeed, businesses must retain their finest people and top talent.
There are endless career opportunities in today’s market, and individuals are likely to leave their existing positions if they believe they can find something better.
Today’s enterprises and HR professionals find retention to be a great challenge. They must consider a variety of strategies to improve employee retention.
In this post, we’re going to explore:
- 4 reasons why employee retention is important
- 7 strategies to boost retention rates
We’re also going to answer some of your most frequently asked questions in relation to employee turnover.
Let’s jump right in!
Table of Contents
What is Employee Retention?
Employee retention is a strategy to keep employees happy at their current company rather than eagerly seeking alternative employment opportunities.
In other words, the procedure by which a corporation guarantees that its employees stay and they don’t leave their positions is referred to as retention.
The flip side of retention is turnover, which occurs when employees leave a company for a number of reasons.
Every company and sector has a different retention rate, representing the proportion of employees who stayed with the company during a specific time frame.
Now, let’s explore why employee retention is essential.
4 Reasons Why Employee Retention is Important
Employee retention benefits your company’s health and success.
Hiring and training new staff takes a great deal of time, effort, and investment, and turnover can have a strong impact on your company’s performance.
High turnover rates cause a slew of issues including increased expenses, knowledge loss, and decreased production.
Let’s break down our reasons below.
Reason #1: Enhanced corporate culture
Your corporate culture influences whether or not your staff resign.
You can associate great retention rates with your cultural efforts.
After all, 72 percent of employees named workplace culture a deciding factor in whether or not they would work for a business.
Employees will feel more connected to their job, their team, and your company culture if you can engage and retain them.
Ideal corporate culture values people, offers excellent benefits, and focuses on diversity.
If you have a low turnover rate, your company culture will be organically adapted and retained in the day-to-day employee experience.
Reason #2: Better customer experience
Employees are happier when staff retention is prioritized.
Employees that are pleased with their current work status transfer that emotion to consumers.
Employee satisfaction is associated with high employee engagement. In turn, increased engagement results in improved customer service.
Additionally, personnel that have been with their organization for a long time can address more complex challenges to increase client satisfaction.
Let’s check out the third reason.
Reason #3: Cost saving
Retaining talented and dependable employees is economically beneficial to a company.
Scouting, hiring, and onboarding new employees is costly and time-consuming, taking an average of $14,936 and a substitute time of 94 days.
Companies with reduced staff turnover costs have more funds to spend in other areas of their business.
Reason #4: Experienced staff
The loss of knowledge assets, skills, and connections, both inside and with clients and stakeholders, is a crushing cost of employee turnover.
The company also loses the potential value that the employee could have provided, known as the opportunity cost.
When senior staff leave, it may influence succession planning.
Even in times of high unemployment rates, these workers – especially top performers or those with in-demand talents – are often at risk of leaving.
Companies that prioritize the retention of more senior or experienced staff get considerable returns since these workers are more likely to handle complicated problems on their own, which ultimately helps the business.
Now that you know why it’s essential to retain employees, it’s time to discover our retention strategies.
Strategy #1: Gain Your Employees’ Trust
Employees are more productive when they have faith in management and those who give them responsibilities.
When people trust the person who is assigning their work, they’re more likely to attain the objectives that have been set for them.
A lack of clear organizational leadership has prompted 46 percent of workers to seek new jobs.
Meanwhile, 79 percent of highly engaged workers have faith in their leaders.
If you haven’t developed an employee engagement program, chances are your staff don’t value you as much as you believe.
Building personal relationships, emphasizing honesty and openness, motivating your team members, giving credit and shouldering responsibility, avoiding favoritism, and showing competency in your job will all be crucial as you strive to establish greater trust with your workers.
Take action by making it your aim to get to know each of your staff a bit better.
Engage in open-ended talks with them, and give them the space to feel more at ease and free to express themselves.
Let’s check what’s next.
Strategy #2: Focus on the Onboarding Process
Having employees feel like they’re a part of your business begins with onboarding and continues during their first year with the business.
According to SHRM, a study from 2007 mentions that newly recruited employees are 58 percent more likely to stay with the organization three years later if they went through a well-organized onboarding process.
In addition, according to SHRM and Sparkbay, 76 percent of participants’ employers are not properly onboarding new hires, and just 47 percent feel their onboarding program successfully retains new employees.
It can take up to two years for a new hire to attain the same level of performance as an established staff member, so empowering them from the start can do miracles for retention.
Assist new workers in making the transition from outsider to insider by:
- Offering training programs related to their duties
- Providing them with resources that help fulfill their tasks and objectives
- Establishing an atmosphere in which they feel welcomed
However, don’t overload them with information and hard work. Slowly provide digestible information about your human resources programs, rules and procedures, benefits and incentives.
Also, get input from staff so that you can continue to improve your onboarding process.
Managers play an important role in onboarding.
Remember, how successfully they are onboarded can determine how attached they are to the company during their career and increase job satisfaction.
Suggest opportunities for managers to get to know their new staff and urge them to schedule one-on-one meetings each week while the new employee is settling in.
Introduce new recruits to their coworkers and assign them a mentor so that they have somebody to turn to if they have any questions.
Building social relationships among colleagues boosts the chance of retention, so plan events that bring individuals together around common interests when big groups of new recruits arrive.
You should also make certain that remote employees aren’t left behind when it comes to onboarding.
Finally, don’t forget to look for strategies to incorporate groups that are coming back to work.
This might include new parents, individuals returning from a lengthy leave, or contract employees who are in full-time roles.
These employees are often left out of onboarding initiatives, yet their adjustments can be equally as challenging as those of new recruits.
Strategy #3: Promote Flexibility
The future of work will include offering flexible work settings in terms of location, time, position description, and career paths.
Accept it and move forward to team-building of employees who design their future workforce, as individuals always want to leave their own marks.
While we’re on the subject of flexibility, lighten up on “academic credentials.”
Consider employing people that don’t quite suit your description; if they have 75% of what you’re looking for, go for it!
More than half of IBM’s employment postings in the United States do not need a four-year college degree. People who fall short on paper still learn what’s lacking with the correct mentality and help.
According to data, offering hybrid and remote work is closely tied to employee engagement.
Engaged employees not only opt to remain with their present company, but they also recommend it to family members, acquaintances, and top talent looking for their next career choice.
Employees that are satisfied and feel appreciated by their employers become brand advocates for your organization.
Flexibility not only retains and attracts people, but also makes them more productive by allowing them to work when and how they want.
In fact, 79 percent of workers report that working remotely has had minimal impact on their day-to-day performance.
Workplace freedom leads to a far less stressful work environment.
Let’s see our next strategy.
Strategy #4: Support a Balanced Work-life Schedule
Many businesses have high expectations of their staff.
However, for employees, this can mean less time spent on personal life, leisure, and family.
According to an OECD study, around 12% of workers in the United States work very long hours.
This is somewhat less than the national average of 13%.
However, full-time employees in the United States dedicate just 60% of their day, or 14.5 hours, to personal life and leisure, which is less than the standard of 15 hours.
Your staff members will do better at work if they’re getting enough rest and have the proper time to care for themselves and their families.
Setting regular work hours, guidelines for work weekends, or work-from-home programs can provide your teammates with the independence they need to give their all every day.
Identify people in your organization who are overloaded with work and seem to be going through burnout.
Allow them some time off, or take everyone outside for a stroll, and examine how your work schedule encourages a good work-life balance.
Our upcoming strategy is working on internal promotions.
Strategy #5: Work on Internal Promotions
According to Robert Half research, almost four out of ten professionals believe their career development has stopped since the outbreak of the pandemic.
For millennial employees aged 18 to 24, this figure rises to 66 percent.
Approximately half of the respondents who stated that their career had halted reported a standstill in pay growth, job promotion, and skill development.
Also, Forbes mentions that internal promotion gives a clear road to increased competitive compensation and responsibility, while also making employees feel appreciated and a part of the company’s success.
Take, for instance, Target: in preparation for the holidays, the Minneapolis-based retailer has announced 5 million more hours for existing store staff, totaling more than $75 million in salary.
Furthermore, the company said that it intends to recruit fewer seasonal workers than in prior years and instead concentrate on more flexible scheduling, training, recognition programs, salary, and perks for its current employees for career advancement.
Let’s move forward.
Strategy #6: Invest in Employee Training and Development
Providing transparent opportunities for solid career growth is one of the easiest strategies to prevent employee turnover.
The most common reason workers quit a business is because they do not see a rewarding long-term career ahead of them.
Employees will get dissatisfied and search for work elsewhere if you do not provide regular professional development opportunities and a fair promotion system.
This does not imply that you must promote every individual every year; this is unrealistic, and your employees are aware of it.
They do, however, want to know what their career path may look like, to have frequent talks about career growth with their supervisors, and to know that possibilities for advancement are clearly stated and given equitably.
Among the worst ways to lose talent is due to a lack of learning new skills.
These are inquisitive individuals, those that are eager to learn new technologies, procedures, processes, and so on, and these individuals often make excellent workers.
They are quick to take on new and difficult challenges, and come up with innovative solutions.
According to LinkedIn’s annual Workplace Learning Report, 94 percent of workers stated they would remain with a company, whether a small business or a major corporation, for a longer period of time if it invested in their professional growth and upskilling.
Business leaders must prioritize workers’ professional learning and development opportunities by:
- Devoting particular funding for online courses
- Giving tuition reimbursement when required
- Sending staff to industry events, webinars, and seminars, among other things
Let’s see the last strategy on our list.
Strategy #7: Consider Staff Health and Well-being
Few employees are ready to endure excessive working hours and unpleasant working arrangements as organizations throughout the world place a greater focus on employee wellbeing.
Furthermore, research reveals that anxious, overloaded, and overworked workers are more prone to become unhealthy.
Overburdening staff with too much overtime work may result in decreased productivity, bad employee morale, and a greater turnover rate.
Recognizing the importance of employee health and well-being – whether mental, physical, or emotional – will help with retaining your best employees and developing a positive workplace culture, leading to a reduced turnover rate.
Employees value companies that encourage their wellness, whether it’s providing them with health insurance, or something as simple as allowing paid time off and breaks to loosen up and relax.
Adding headcount where needed and assisting employees with professional guidance on making good investment decisions can be a gamer changer.
Conducting regular counseling sessions to ensure sound mental health, performing yoga and meditation classes, or helping to fund their gym costs can help tons.
Employees often quit because they are burnt out – their hours are too long, their vacation time is insufficient, and they don’t have enough time to be entirely human beings and effective employees.
Examine your rules attentively if departing employee feedback mentions this as the cause they’re leaving in exit interviews.
That’s it for our list!
Now Over to You
Our list of efficient employee retention strategies has come to an end.
Hiring the proper employee is typically the first step and bottom line in retaining your workers.
Even so, it’s critical to keep working to make people feel secure, comfortable, and capable of succeeding in their professions.
If you’ve analyzed your company’s retention rate and determined that you want to improve it, use our above strategies to get started.
If you have any further questions, do not hesitate to contact us.
Thank you for reading and don’t forget to read our FAQs!
Frequently Asked Questions (FAQs)
Q1. What’s the difference between employee retention and employee turnover?
Employee retention is described as a company’s ability to avoid employee turnover, or the headcount who quit their position voluntarily or forcibly in a certain time period.
Employee turnover is the overall number of employees that leave an organization during a specific time period. Employees who leave willingly, along with those who are fired or laid off, are included in the definition of turnover.
Q2. What are the 5 main drivers of employee retention?
While businesses must surely attract and secure talents, understanding how to keep those strong employees is equally as important for maintaining a company’s capabilities and quality advantage.
Here are the 5 main drivers that can help increase your employee retention rate:
- Long-term employee benefits/benefits package
- Providing growth opportunities
- Work-life balance
- Means of alignment and communication
- Relationship with supervisor/manager
Q3. What are some drawbacks of good employee retention?
When a business retains specific individuals, it can produce a loss scenario.
Here are a few drawbacks and why keeping an employee can be a bad idea:
- Workplace groupism
- Affected work environment
- Lack of appreciation
- Salary dissatisfaction