Employee retention is an important goal for many businesses today, mainly because of how expensive turnover can be.
However, most employees today quit their jobs for a host of different reasons, be it personal, professional, or spontaneous. At this point, it’s probably far too late to have any sway in changing the employee’s decision.
Instead, businesses can divert energy and resources towards an excellent employee retention strategy.
In this article, we’ll highlight seven practical strategies to improve retention and explore common reasons why employees leave a company.
This article contains:
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- 7 Practical Employee Retention Strategies
- 4 Major Reasons Why Employees Leave a Company
- Why Employee Retention is Important for your Business
7 practical employee retention strategies
Today, an employee is empowered by multiple platforms and abundant information to move from one job to another. Moreover, notions of employability have undergone a radical shift in recent years.
An August 2021 study shows that 55% of US employees plan on shifting jobs over the next year.
So if you’re an employer struggling with what the media has named the ‘Great Resignation,’ we have some helpful tips for you.
But first, if you want to learn more about why employees quit and why employee retention is critical to your business, feel free to jump ahead to those sections.
Here are seven practical strategies to improve employee retention at your organization:
1. Recruitment and onboarding
Effective employee retention strategies begin with the hiring process.
Retention efforts can begin by setting the right expectations and learning about your potential hires’ priorities at the interview stage itself.
During the onboarding process, HR professionals should aim to go beyond just teaching a new employee about what the job entails. They should also try to provide a clear view of company culture and how new employees can flourish in it.
Here are two simple ways to improve the new employee experience:
- Mentorship programs: A current employee can mentor a new hire and introduce them to different aspects of the company.
- Socialization programs: HR leaders can facilitate shared learning experiences and other introductory activities to improve team culture among new hires.
Effective onboarding can help employees feel like they’re a part of the organization and have been set up for success.
2. Offer competitive compensation
Companies must make sure that they stay competitive with their compensation plans if they want to improve their employee retention rate.
The best employees need to know that their time and efforts are valued appropriately. This means periodically evaluating and adjusting their salaries based on the market rate for similar positions.
If your company can’t afford to increase the wage immediately, it’s a good idea to consider other types of compensation as part of your employee retention program.
For example, you can offer employee benefits and perks like retention bonuses, more vacation time, health insurance, defined benefit plan payouts, tuition reimbursement, etc.
3. Invest in training
Giving your employees an opportunity to grow and develop with training and educational initiatives can be really beneficial for retaining them.
Employees want to update their skillset and tend to leave when they don’t get enough opportunities to do so. Upskilling is particularly important now, given the greater use of technology and overlapping job roles.
Employees are likely to see such initiatives as investments in their career development, boosting employee morale. This sends a clear message about their value to the organization and is a powerful incentive to have employees stay for the long haul.
4. Be an inspiring leader
Exiting employees often quote poor management as a top reason for dissatisfaction. And with good reason too.
After all, interactions with one’s direct managers can make or break an employee’s day.
This is why employee loyalty is closely linked with an employer’s management style. To retain employees, ensure team leaders and managers in your organization:
- Encourage open communication.
- Provide insightful employee feedback.
- Appreciate exemplary work.
- Inspire everyone to work as a team.
This can all have a positive impact on employee recognition within the organization.
Besides, top management can incentivize team leaders by linking staff retention to their KRAs (key result areas). This will give managers a concrete reason to tune their management style to maximum retention.
5. Prioritize employee engagement
You can observe levels of employee engagement by picking on signs such as your team’s performance, collaboration, skill growth, etc. If you want numbers to support your observations, conduct in-person interviews or even employee engagement surveys.
How does meaningful employee engagement help with retention?
Engaged employees are passionate about their work, take pride in their organization, and feel respected by their employer.
Now, let’s take a quick look at some straightforward ways to increase engagement:
- Encourage feedback: Showing employees that their perspectives and opinions are valued and heard is a great way to improve employee happiness and engagement.
- Communicate with your employees: Keeping an open line of communication with all employees by introducing periodic individual conversations or open-ended meetings can be highly beneficial.
- Challenge your employees: A great way to keep employees engaged is by pushing their skills with challenges. However, managers must stay attuned to the ability of each employee and ensure they provide adequate support.
Fostering a growth mindset and viewing failures as valuable experiences is essential to keep your employees engaged.
Want to learn more about employee engagement?
Here’s a great article on the correlation between engagement and productivity.
6. Ensure work-life balance
Some companies have extremely high expectations from their employees, and it’s understandable why this is the case. However, it is important to question whether this can really get the best result from your employees.
A balanced work-life situation is vital for employee satisfaction and wellness.
When employees have less time for their families, health care, and leisure, they are more likely to perform poorly at work.
You’re also likely to have employee burnout when your team is overly-strained, which affects the quality of work and overall productivity. The bottom line is that having happy employees is worthwhile for your business’ performance too.
However, employers must prioritize work life balance, especially when employees are working from home. It’s important to define boundaries so that team members still have enough uninterrupted time for their well-being.
7. Empower your employees with the right tools
There’s an excellent selection of tools available to empower your employees in the workplace. Using them to ease processes and improve productivity can help minimize employee stress.
This is all the more critical to a remote work environment. It incentivizes employees to stay committed and sets them up for success in their new work situations.
Here are a few different types of tools that can help you achieve this:
- Time tracking
- Productivity measuring
- Project/task management
- Communication and collaboration
Besides increasing employee productivity and job satisfaction, it also helps create a clear divide between their professional and personal life.
Overall, this can contribute to significant improvements in performance and is a great way to retain the best employees at your company.
For instance, Time Doctor is one such tool that will help employees stay productive throughout the workday.
What’s Time Doctor?
Time Doctor is a powerful time tracking and productivity management tool. It has robust features that make it a great fit for small and large companies alike.
Using Time Doctor, employees can easily log their work hours and avoid distractions. They can see how they’ve spent their time at work, giving them valuable insight into their strengths and weaknesses.
For a detailed look at how Time Doctor can improve productivity and the employee experience, check out this list of its fantastic features.
Let’s now explore some of the most common reasons why employees decide to leave their company.
4 major reasons why employees leave a company
Companies must attempt to understand why departing employees felt they had to leave in the first place.
Being aware of these reasons lets you address them for your existing employees. This is why exit interviews can provide a lot of insight when forming your retention strategy.
Let’s now explore some of the most common reasons why employees leave their job:
1. Low job satisfaction
Employees who are passionate about their work tend to be the top performers in an organization.
But tedious and repetitive work, devoid of any meaning or greater context, can soon lead to low job satisfaction and result in slumps in the quality of work. This is an important contributor to both voluntary and involuntary turnover.
Employees who are bored and unsatisfied are likely to look for more meaningful and stimulating opportunities outside of work.
That’s why satisfaction and fulfillment are vital to consider when it comes to retaining your top talent.
2. Career stagnation
Career stagnation occurs when employees lack prospects for individual or professional development. This may refer to salary increments, promotions, or new skill training.
The COVID pandemic has magnified this feeling of hitting a brick wall and is a major reason for ‘The Great Resignation’.
3. Better alternatives
It’s common for even satisfied and good employees to leave their jobs when more promising opportunities are available.
Competitors may also poach employees, especially in fields with a shortage of skilled candidates.
If your organization isn’t competitive with its pay, employee development opportunities, and quality of the work environment, employees are more likely to be drawn to find a new job.
4. Management mistakes
Poor management is another major factor that drives employees to quit their jobs.
Let’s explore three main management mistakes that result in employees leaving:
A. Disproportionate workload
A heavy workload can be problematic, especially when a manager hasn’t considered the employee’s level of experience and knowledge.
Burdening an employee with too many different tasks and projects could strain them to the point of frustration. Their quality of work is likely to suffer, and they may quit because they feel like they’re a poor fit for the job.
B. Unreasonable expectations
Managers may overestimate a new employee’s abilities and start expecting more than they can deliver
While pushing a talented employee to work outside their comfort zone can be a great way for them to grow and prepare for more responsibilities, it can also exert undue pressure on them.
Moreover, expecting an employee to simply know something outside their usual tasks without adequate training or mentorship could have a negative impact.
C. Micromanaging employees
Micromanagement is one of the most common mistakes managers make, leading to high voluntary turnover.
Exerting some level of control over your employees is often necessary as a manager, but it’s vital to examine your actions and know when it’s excessive.
Too little freedom can also dampen their creativity and morale.
All of these significant managerial mistakes are likely to contribute to higher employee turnover.
Let’s now explore seven strategies that you can implement to retain your best employees.
Why employee retention is important for your business
Employee retention is a source of concern for many organizations and is quickly becoming a significant competitive differentiator.
There are a couple of key reasons for this. Let’s take a look.
1. Turnover is costly
Today, many companies report that employee turnover has a negative financial impact due to the cost of:
- Recruiting a new employee.
- Training the employee.
- Overtime work of current employees to compensate for the vacant position.
- Lost productivity.
It’s important to note that the longer an employee stays, the more productive they become.
So, the loss in productivity is felt even more acutely when you’ve lost an older employee.
2. Talent shortage
There’s a severe shortage of skilled candidates in many industries.
For example, in the IT sector, the impact of a high turnover rate is considerably greater as it has such a tight hiring market for replacements.
Retaining your employees becomes even more important in such cases. With your best performers being sought-after by competitors, it can be very difficult to retain them.
3. Bad publicity
Employees leaving your organization on a sour note can be quite destructive to your organization’s reputation. The bad publicity by a disgruntled former employee can make hiring new talent a tougher process.
It’s very easy for potential candidates to use social media to find out anything negative that has been said about the organization. This makes it vital that you pay adequate attention to retaining employees. And if they decide to quit, ensure you maintain good relations with them.
The pandemic has brought on a shift in priorities – employees are now more inclined towards fulfilling and engaging work.
This is why diverting time and energy towards retention efforts is a worthwhile venture.
We’ve explored seven practical strategies for employee retention that are sure to benefit any organization’s long-term productivity and performance. You can implement what’s best for your organization and give your company the best chance to retain your talent.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.