10 Employee Retention Strategies for Your Company in 2023 [+ Examples]

employee-retention-strategies
Employee Retention Strategies

Employees play an important role in the success of a business. Regardless of the company level, they run the organization, carry out the mission, and have influence over the customers. There's a saying, “If you take care of your employees, they will take care of your clients”. This has again stressed the importance of workforce management in the workplace. But how can you effectively retain your employees?

In this article, we will dig deeper into employee retention and retention strategies, an important element of an efficient workforce management strategy. You will learn about why retaining employees matters, how to build successful staff retention strategies for your company, and more!

What Is Employee Retention?

Employee retention refers to an organization’s ability to make employees stay with their current company and not actively look for new jobs. The opposite of retaining employees is turnover, when some staff choose to quit for various reasons, either voluntarily or involuntarily. 

For example, an employee who joined your company a while ago finds that the job is no longer challenging for him. He then becomes a passive job seeker and might be attracted by new job opportunities. At this point, you need to come up with some ways to retain employees like him and thus reduce employee turnover.

To calculate the staff retention rate, divide the number of employees that remain in your company for a fixed time period (e.g. a quarter) by the total headcount of employees at the beginning of the year. Then, multiply that number by 100 to get the retention rate in your workplace. 

Below is a simple formula to calculate employee retention rates:

Employee Retention Rate = (Total # of remained employees during set period ÷ Total # of employees) x 100

Why Is Employee Retention Important?

The following are 5 ways that innovative employee retention strategies benefit businesses.

1. Boost employee morale

A work environment with low staff or team retention can dampen employee morale. They not only feel unmotivated at work but also lack a strong attachment to the company. In contrast, companies with effective employee retention programs can lift employee morale and engagement, as well as promote positivity in the workplace.

2. Increase productivity 

A high turnover rate can lead to many internal problems within an organization, one of which is the loss of productivity. The fact is that it normally takes a new hire about one year to reach the productivity of an existing employee and build relationships with other colleagues. 

Low employee turnover, on the other hand, can save an organization from productivity losses by ensuring a positive employee experience and maintaining a healthy work environment.

3. Reduce training costs and time

For companies doing a great job at retaining top talents, they won’t have to spend as much money and time as with the new hires. The reason is that they just need to top up their knowledge rather than learn everything from scratch. 

4. Strengthen company culture

Every company has a culture which can be defined as a set of shared values, goals, attitudes, and practices that make up the work environment. Company culture is closely related to employee engagement and retention in two ways. 

First, good employee retention policies can contribute to creating a better workplace culture, and in turn improve the business’s value. Second, engaged employees who are satisfied with the workplace will turn into your brand ambassador, which helps foster positivity across the organization and attract more talent.

5. Increase revenue

The longer employees stay in their positions, the more knowledge and expertise they acquire, which will generate higher productivity and revenue growth. Especially when it comes to team retention, people who work together for a long time are more likely to deliver better work results and financial returns.

Reasons Why Employees Quit

It's important to know why employees quit their jobs because this could help develop better staff retention strategies. 

Let's take a look at the push and pull factors that influence employee turnover rates:

Push Factors

  • Low salary
  • Insufficient training
  • Long and irregular working hours
  • Bad relationships with managers and peers
  • No or insufficient hands-on support
  • Sense of isolation

Pull Factors

  • Higher salary
  • More opportunities for career growth
  • Flexible work arrangements
  • Better career potential
  • Effective mentorship programs
  • Sense of appreciation

10 Effective Employee Retention Strategies

So how to keep employees happy and prevent them from seeking new job opportunities? 

Here are 10 creative ways to retain employees and boost their job satisfaction within your organization.

1. Onboarding and orientation 

Onboarding is a great opportunity for employers to win the hearts and minds of new hires.

Your onboarding process should acclimate such individuals to their roles and teach them about the company culture as well as how they can thrive in it. The training and support they receive from day one, whether in person or virtually, can help with retaining talent by making them feel like a member of the team, and thus set the tone for their entire tenure in your company.

2. Employee benefits and compensation

It’s essential for companies to pay extra attention to compensations and benefits since these are important aspects of successful employee retention policies. When employees are adequately compensated, their morale remains high, and they won't look for better job prospects. Employers should not only evaluate and adjust employee salaries regularly but also care about employee health care benefits and retirement plans. These are some practical ways to maintain low employee turnover rates.

3. Employee wellness programs

Health and wellness have a significant impact on improving employee retention in the workplace by targeting their physical, mental, and social well-being. 

Below are 10 great examples of effective wellness programs for employees:

  • Weight loss competitions 
  • Smoking cessation programs
  • Mental health therapy
  • Employee assistance programs
  • Healthy food access
  • Gym memberships
  • Flexible work arrangements
  • Educational courses
  • Team-building activities

4. Mentorship programs

This is not only a great way to attract talent but also helps improve retention in the workplace. Mentorship programs offer more promotion opportunities for both mentors and mentees compared with those who do not participate in these. The reason is that the mentor will become more specialized in what they are teaching, while the mentees can learn new skills and knowledge. 

Moreover, this is a great way to strengthen peer relationships at work, which can foster a fun, healthy work environment and in turn increase employee retention.

5. Training and development

Investing in training and development programs helps companies gain and retain top talent because they feel both personally and professionally fulfilled. Also, they will feel like they're building valuable skills for their career and becoming more interested in their job.

6. Communication 

Effective communication can boost employee retention in the workplace. As a leader, you need to ensure constructive, positive, and transparent communication across the entire team. You not only motivate your colleagues but also proactively connect with each of them on a regular basis to get a sense of their job satisfaction. 

7. Employee feedback

Honest feedback from employees seems to be overlooked by many organizations; however, this is critical to strengthening your company culture and boosting employee engagement and retention. Not only managers can provide structured feedback to their employees, but employees should be encouraged to share their thoughts on any job-related issues. As such, they will see that the manager respects their insights and wants to act on their experiences.

8. Recognition and rewards

Recognition and rewards resonate as key to staff retention because obviously, every individual wants to feel valued at work. Thus, be sure your HR or management team set up proper rewards systems to incentivize great ideas and outstanding performance. In the new era of flexible work like today, investing in digital rewards and recognition is also one of the most innovative employee retention strategies.

9. Flexible work arrangements

Flexible work arrangements are referred to as both location and working hours. According to a survey by Robert Half, over 50% of professionals working from home would look for a new job if required to return to the office full-time.

So, offering flexible options, whether in terms of location or schedules, can help retain top talent in your company. 

10. Work-life balance

There is a clear connection between flexible work arrangements and the employee's work-life balance. After work, they want to spend quality time with their beloved ones and for themselves instead of performing job tasks. 

As a manager, you should regularly support your employees’ health and not have work negatively impede on their personal lives. These are how to achieve work-life balance in your company, which helps reduce employee turnover and increase employee retention. 

5 Workforce Management Mistakes to Avoid

In the final section, we'll be looking into 5 management mistakes that often lead to low employee retention rates.

⚠️ Ineffective management

This is a huge detriment to employee productivity and loyalty, which in turn can adversely affect worker retention.

Here are 7 signs of poor management within an organization:

  • Failing to explain or set goals
  • Undervaluing employees
  • Not possessing the must-have qualities of a good manager
  • Publicly blaming employees for some issue
  • Withholding information
  • Lack of strategic alignment

⚠️ Offering only monetary rewards

Choosing the wrong incentive scheme might ruin employee retention programs. Many companies prefer financial incentives; however, these are extrinsic motivators and can't create or sustain a long-term individual commitment.

Besides giving employees a cash bonus or pay rise, other creative ways to retain employees might include:

  • Experiential rewards
  • Public recognition
  • Extra leave
  • Flexibility at work
  • Opportunities for professional and personal development

⚠️ Discriminating 

Employee retention rates depend on a healthy work environment, and a healthy work environment should maintain equality.

Workplace discrimination, on the other hand, can wreak havoc on an employee retention effort. Employees feel like they are not being treated fairly due to their age or gender. And then, they may start to feel resentful toward the management team and other coworkers who benefit from the discrimination. This negative attitude can ultimately affect the overall performance of the company.

⚠️ Too many rules and regulations

In today’s constantly changing work environment, this is a big mistake that may hurt employee retention plans. While some rules may be essential for the organization, having too many regulations and procedures may lead to poor work performance and lack of efficiency.

Especially when it comes to retaining top talent like tech professionals, they are expecting their employers to offer remote options or a flexible work schedule.

⚠️ Not offering job rotations

Any employee doing the same job for years might become bored and unmotivated. In this scenario, the management must consider some ways to retain employees such as offering a job rotation and providing such employees the opportunity to do something new. Otherwise, they might quit their current jobs and explore new challenges in their career.

Key Takeaways

Employee retention is a top priority for most organizations. However, retention strategies and policies will differ from employee to employee, as well as from industry to industry.

Whether your company has been seeing low employee retention rates or not, it's never late to develop effective staff retention strategies for keeping your best talent. 

To do so, you need to understand the link between employee engagement and retention. Employees who are engaged and feel happy about their work are more likely to stay with the organization, which in turn reduces employee turnover rates and the costs associated with it.

Additionally, keep in mind that employee retention is not only a matter of money. As a manager, you should make your staff feel valued at work if they perform well, and consider other incentive programs that focus on their wellbeing. 

Found this article helpful? Follow our blog for more! Begin your job and talent search and branding journey today with Cake, the premier talent community providing solutions and the best online resume builder.

— Originally written by May Luong —

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