10 Employee Retention Strategies for Keeping Your Best Talent
To reduce employee turnover, and boost productivity with these 10 employee retention strategies. Learn more.
In the aftermath of the pandemic and what has been called the “great resignation” employee retention strategies are top of mind. Turnover—and the need for talent acquisition and training it requires—is expensive. Companies of all kinds want to ensure they can find and keep top talent on board.
Why are employees leaving?
There are a variety of factors that could cause employees to leave an organization, and those factors will vary based on the organization and the employee’s position. Research into the top drivers of attrition during the great resignation, though, can offer some general insights into the primary reasons why employees leave their organization.
Ben Zweig, CEO of Revelio Labs, Donald Sull, a senior lecturer at the MIT Sloan School of Management and a co-founder of Culture X, and Charles Sull a co-founder of CultureX, recently conducted a massive study based on the analysis of data from Revelio Labs and Glassdoor to derive insights into what was driving the high rates of attrition during the great resignation.
What they found was both expected, and counterintuitive.
The study revealed the top five predictors of employee resignation. To do so, they measure the level of influence on attrition for each predictor, relative to employee compensation. So, for instance, a toxic culture is 10.4 times more likely to drive attrition than compensation—and was the top driver. The other four rounding out the list include:
Job insecurity and reorganization—3.5.
High levels of innovation—3.2.
Failure to recognize employee performance—2.9.
Poor response to COVID-19—1.8.
The surprising item on the list is high levels of innovation which is often touted as a plus for engaging employees. The study’s authors, though, suggest that: “Staying at the bleeding edge of innovation typically requires employees to put in longer hours, work at a faster pace, and endure more stress than they would in a slower-moving company.”
A key driver not identified through their analysis that has been pointed to in other research is the lack of opportunity for development and growth. David Cook, head of business development and an HR consultant with Mullen & Mullen, a personal injury law firm in Texas, says: “One of the best predictors of employee attrition anywhere is the lack of growth and development opportunities.”
His sentiment is supported by research from McKinsey & Company indicating that the top driver of resignation was “lack of career development and advancement” at 41%, followed by “inadequate total compensation” at 36%, and “uncaring and uninspiring leaders” at 31%.
Whatever the drivers, it’s important for organizations to have strategies in place to help them both understand and address retention.
Why do employee retention strategies matter?
Employee retention strategies matter because employee development and turnover is costly and losing top talent and institutional knowledge represents a risk to any organization.
In addition, an organization’s ability to retain talent helps to develop a strong employer brand, which will pay dividends by continuing to make the company an employer of choice.
10 effective employee retention strategies for the changing work environment
Here we take a look at some effective employee retention strategies that you can consider implementing in your organization, along with examples to help you consider how to put these strategies into action.
1. Bring the right people on board
Culture fit is important between organizations and the employees they hire. Some companies, like Zappos, feel so strongly about finding the right fit—from both an employer and an employee standpoint—that they’ve offered employees $2,000 to quit if, during the onboarding process, they didn’t feel the relationship was mutually beneficial.
2. Ensure competitive pay
While pay has not traditionally been top on the list of reasons employees choose to stay with a company, competitive pay is important. Employees will leave for positions in other organizations where they can earn more. Research from Randstad indicates that “attractive salary and benefits” is the top reason employees chose to leave their organizations in 2021 (62%).
It’s important for organizations to stay on top of prevailing wage rates, says Matt Erhard, a managing partner with the recruiting firm Summit Search Group. “Given the current inflation rate, a salary that was average for a position two years ago might be unacceptably low today,” he says.
3. Provide great benefits
As Randstad’s research shows, attractive benefits go hand in hand with good salary. In 2021, BetterUp listed the top 20 benefits and the companies that offered them. The best benefits, they said, “support employees’ mental, physical, emotional, and financial health,” and include such things as:
Paid time off
Employee recognition benefits and appreciation programs
The top three companies providing great benefits, according to BetterUp:
They placed their own company fourth on their list.
4. Develop your leaders to lead effectively
As McKinsey’s research indicates ineffective leaders—specifically leaders who are uncaring and uninspiring—can lead to disengagement and turnover.
Cara Silletto, president and Chief Retention Officer with Magnet Culture, agrees, and says: “The number one investment to reduce costly employee turnover is to develop leaders at all levels in order to create a place where people want to work.”
5. Create and maintain a strong culture
Culture matters to employees. They want to work for companies where they feel their values are aligned and where they feel a strong sense of purpose. A company like Marriott International, which has made the 100 Best Companies to Work For list for 25 years,points to their “people-first culture” as being “vital” to that achievement.
6. Offer flexibility and work/life balance
Natalie Fell, an HR and business specialist with Step By Step Business says that work/life balance is “absolutely essential when it comes to retaining employees.” The pandemic, she says, “forced today’s workforce to think deeply about what really matters, so the more a company is able to respect their employees and their lives outside of work, the more likely they are to remain loyal and give it their all during working hours.”
7. Focus on employee development
Offering upskilling, professional development, and in-company advancement opportunities, says Erhard, can keep employees from feeling “like they’ve hit a ceiling within your company.” In addition, he says, “offering employees the chance to grow within your company will help you keep your ambitious high performers on your team.”
Focusing on employee development, Erhard says, shows loyalty to employees, making it clear that the company is invested in their growth and committed to helping them continue to learn and improve.
8. Take the pulse of employee sentiment frequently
Stay interviews or pulse surveys, says Erhard, can help employers identify the real issues impacting employees, rather than “taking shots in the dark at what you think the problem might be.”
Conducting pulse surveys regularly, and comparing results to identify both positive and concerning trends is a good way to use data to help make adjustments that impact retention.
9. Provide regular recognition in both formal and informal ways
Top Workplaces points to Gorilla Glue as a company that ranks highly for employee recognition and that has great employee rewards and recognition programs. They offer: company-wide team building events, cross-functional outings, ongoing focus groups, and a conversational atmosphere.
10. Provide a respectful and healthy work environment
Diversity, equity, inclusion, and belonging (DEIB) is important to employees—more so than ever in an environment where social issues and unrest have become prevalent. In fact, about 80% of workers responding to a CNBC/SurveyMonkey Workforce Survey said that they wanted to work for a company “that values diversity, equity and inclusion.”
Today’s employees value working in settings where they feel comfortable bringing their whole selves to work, meaning they feel that their opinions and ideas will be sought and valued, that they are free to share concerns as well as compliments, and where they will be free from harassment or bullying—from managers, colleagues, and customers.
Your onboarding program sets the stage for the entire employee experience with your company. Delight them and you’ll start them out on a path to engagement and retention. Dismay them and you’ll do the opposite. Make sure you have the right strategies in place to drive employee retention.
While you don’t want to simply “copy and paste” these strategies, they can be a great starting point for conversations around how to build a culture that boosts engagement and retention.