In the last few years, employees have started leaving their jobs in a phenomenon called the Great Resignation.
These persistent turnover rates may hinder a company’s growth.
That’s why a robust employee retention strategy is the key to turning the Great Resignation into the Great Retention.
In this article, discover what an employee retention strategy is and how to implement it in your business.
What Is an Employee Retention Strategy?
Definition
An employee retention strategy is a plan that companies build and use to increase employee retention and keep their top workers.
The program’s aim is to mitigate turnover risk, which is a common challenge for HR departments worldwide.
While some employee turnover is inevitable, when a business has high turnover rates, it creates considerable expenses while decreasing profit and business growth.
Building a retention program that prevents voluntary turnover rates can save a lot of time and money since it’s easier to focus on the professional development of current employees than train new hires.
Now that you have a better understanding of what an employee retention strategy is, you can see its importance.
But stay with us to clarify these benefits.
Tips, tricks, and inspiration delivered straight to your inbox.
Why Is Employee Retention Important?
Employee retention is important for many reasons.
First of all, due to the high training expenses. In fact, according to SHRM, the average cost-per-hire is around $4129.
Furthermore, high turnover impacts employee morale and productivity. When your staff regularly watch co-workers leaving for new jobs, it decreases their motivation as the workload piles up.
As a result, it creates a downward spiral that leads to more departures and stress, affecting a company’s bottom line and reputation.
On a more positive note, a retention action plan does more than keep employees with your company. It enables:
- Higher job satisfaction
- Stronger teamwork
- Increased employee productivity
- Less work-related burnout
Even if you have high retention rates, every organization needs to work on improving its company culture or develop new initiatives to increase employee satisfaction.
But why do employees leave in the first place? Let’s find out the answer together.
Why do employees leave companies?
Most of the time, exit interviews provide valuable insight into the mind of a departing employee and help you determine what needs to be improved to retain your workers.
Here are some of the reasons why so many people leave their jobs:
- Low salary: When a company offers low pay, it hardly keeps employees motivated to work.
- Feeling burnt out: 77% of workers say they’ve experienced burnout at their current job, causing them to leave their positions for new opportunities.
- Work isn’t challenging: It’s hard to acquire new skills when you know your job responsibilities by heart. Your workers might be ready for a challenge when there’s nothing new to learn.
- Poor relationships with management: An employee’s relationship with their manager can affect their performance and may cause them to leave for greener pastures.
- No clear goals: Most employees want to work on meaningful projects with a clear purpose. If your company’s mission statements are vague, then employees might want to look elsewhere.
So, how can you prevent employees from leaving?
Discover the secrets to creating a compelling retention strategy by continuing your read.
9 Employee Retention Strategies to Implement
If you feel like you’re at risk of losing your best employees, prevent them from looking for other work environments with these nine retention strategies.
Strategy #1: Offer competitive salaries or hourly wages
Offering fair and competitive pay should be on any company’s list of priorities.
To drive this point home, a Payscale report discovered that many companies plan to increase base pay by 3% in 2023. If you’re not offering top pay, you’ll likely lose your best workers to your rivals.
At the end of the day, proper compensation will not only help to retain employees, but also assist them in affording the cost of living.
Fair compensation is vital when a person’s responsibility increases too. Regularly evaluating and adjusting salaries makes employees feel valued for their hard work.
Even if you can’t afford to increase an employee’s pay right now, there are other incentives you can offer, such as bonuses or health care and retirement plans.
Strategy #2: Facilitate career development opportunities
The truth is, most employees find their work boring.
If a company doesn’t invest in its growth and it’s stagnant for a long time, chances are employees will look for more promising work opportunities.
A business is strong when it recognizes the value of upskilling and training its current employees and provides more challenging experiences within the organization.
While an onboarding process is important to ensure a great employee experience, investing time and resources into educational content will keep your workers happy and strengthen your business.
For example, you can help employees discover their potential through job shadowing. This means that you introduce them to another team member’s role that they might be interested in pursuing in the future.
Or you can promote an employee after a certain period based on a careful assessment of their performance.
Author’s Tip: Congratulate an employee on their new role with an amazing promotion gift.
Strategy #3: Focus on employee engagement
Employee engagement refers to how engaged an employee is with their work and how they feel about their job.
A disengaged worker often has lower morale, which directly impacts your company’s productivity and turnover rate.
That’s why engagement is key to any employee retention strategy, as it gives employees a voice, makes them feel listened to, and shows them that their opinions matter.
Let your employees give an honest assessment, whether that’s through pulse surveys or one-on-one sessions.
Chances are they can provide valuable feedback that you can apply to create an innovative retention strategy since they have hands-on experience with how to better handle tasks.
Aside from ensuring employees remain engaged, it will also make workers feel like they contributed to the company’s success.
Tips, tricks, and inspiration delivered straight to your inbox.
Strategy #4: Be mindful of work-life balance
Well-being is top-of-mind for businesses that want to retain their employees.
Promoting and encouraging a good work-life balance, especially after the pandemic, is one of the main reasons why employees stay with or leave a company.
With the emergence of remote work, this aspect is even more important. Leaders need to understand that people have lives outside of their jobs and encourage employees to set boundaries and take time off.
In addition, managers should respect an employee’s time away to ensure a healthy work relationship.
This means no communication AT ALL while on vacation, so remember to clearly set these expectations.
Strategy #5: Get employee onboarding right
Every new employee should go through a successful onboarding process to ensure they become valuable members of a company—and want to stay with it in the future.
The virtual or in-person training you provide from day one will make the new hire understand:
- What’s required of them
- What the company mission is
- How to thrive in the company’s culture
One more important aspect of a good onboarding experience is hiring for a cultural fit.
This ensures long-term retention due to the fact that employees fit better with the team, making them more comfortable and likely to be productive more quickly.
- To ensure you do onboarding right, take a look at this handy checklist.
Strategy #6: Recognize and reward employee contributions
People want to be appreciated for their contributions, no matter whether they work remotely or not.
In today’s world, an employer’s gratitude can boost an employee’s morale. Thanking your team for going above and beyond to help your company grow can go a long way in boosting retention.
While some companies have a formal reward system to incentivize innovation, you can create a recognition program even if you’re a small company or have a limited budget.
Psst! Ensure your employees feel truly grateful for working with your company by giving them an appreciation gift.
Here are some ideas to get you started.
Strategy #7: Provide flexible work arrangements
A large-scale study found that remote working makes people happier by as much as 20%.
While more research needs to be done on the long-term benefits of remote work, employees who do not have to spend time sitting in traffic or in lengthy meetings are likely to be more productive.
Aside from providing work-from-home options, another incentive could be flexible schedules or reduced workdays.
Businesses that offer this perk can increase employee productivity, as employees outside of a traditional office are less likely to be distracted and interrupted while working.
Offering employees the ability to work anytime, anywhere, and create their own schedule boosts workers’ creativity and encourages them to focus their attention on work.
Strategy #8: Give various job perks
Job perks can come in any number of forms.
It can mean anything from flexible schedules to wellness programs or giving employees discounts on travel costs, gym memberships, etc.
One crucial job perk we want to mention is the value of branded swag.
Company swag is any promotional material a business might give away for free to promote its brand. Swag is suitable for any audience, including customers, employees, or the general public.
Why is swag important? Because it’s a cost-effective way to:
- Increase customer loyalty
- Establish an emotional connection
- Increase employees’ motivation
- Boost employee morale
Strategy #9: Put an emphasis on teamwork
As a leader, you need to make sure that communication is part of your culture.
It’s even more important now with the shift to hybrid or remote work. Whether your employees work from home or on-site, they should feel they can come to you with questions, ideas, and concerns.
You should also encourage employees to be team players and work together to build your business’ success.
Creating chances for collaboration, such as team building activities, not only promotes teamwork, but also increases engagement and drives higher overall performance.
***
With these strategies, you ensure that your company retains its top talent and crushes high employee turnover rates.
Tips, tricks, and inspiration delivered straight to your inbox.
Over to You
Employee retention is critical to any successful company.
We hope that the strategies presented here will encourage you to create an amazing retention plan that’ll help you keep top employees in your company.
Want to learn more about other vital HR terms?
Check out our comprehensive HR glossary that’ll open new horizons for your business.
Frequently Asked Questions (FAQs)
If you have any unanswered questions, don’t hesitate to check out this FAQ section.
Q1. What are the three Rs of retention?
The three Rs of retention are:
- Respect: Businesses must respect an employee’s beliefs and ideas.
- Recognition: Recognizing an employee’s accomplishments on a regular basis ensures that they feel valued.
- Reward: A reward is a motivating factor for making employees work harder, but also shows that the organization appreciates their efforts.
Q2. Who is responsible for employee retention strategy?
Since managers play an important role in the employee experience, they’re also responsible for establishing an employee retention strategy.
Giving managers the resources, training, and technology they need to do their job well ensures your company also thrives in the long run.