In this guide, we share some clever methods to increase your employee retention rate, and keep your team for longer.
Does this sound like a familiar scenario? You hire a candidate for a role and invest months of time and resources bringing them up to speed on the job, only to find that they hand in their resignation within a year.
If this happens at your company — and often — you’re not alone. We’re currently experiencing what is known as the great resignation across the globe, in which more employees are quitting their jobs than ever before.
For example, 47% of British employees said they thought about quitting their job, looked for or applied to another job, or talked to their employer about resigning, according to new research by Ipsos. Additionally, 47.8 million U.S. workers quit their jobs in 2021, according to the U.S. Bureau of Labor Statistics, an average of nearly 4 million each month.
While some employees moving jobs is always inevitable, the pace of change indicates that something is going awry. For businesses across the globe, these high turnover rates are causing havoc, impacting productivity, slowing collaboration and harming the bottom line.
Employee retention rate: why are workers leaving?
It can be challenging to diagnose why workers are leaving your company without making use of tools like employee surveys and polls. However, on a global scale, we’ve seen a few recurring reasons for high rates of employee turnover.
The top five reasons employees quit their jobs in 2021, according to the Microsoft Work Trend Index report, include:
- Personal well-being or mental health (24%);
- Work-life balance (24%);
- Risk of getting COVID-19 (21%);
- Lack of confidence in senior management/leadership (21%); or,
- Lack of flexible work hours or location (21%).
Other common reasons for low employee retention rate include:
- A better salary or more compelling job offer elsewhere;
- A lack of workplace benefits and perks;
- Poor career advancement opportunities;
- A desire to change careers and explore something new, and;
- Feeling stressed a lot of the time.
In some cases — such as wanting to change careers completely — you can’t help that your employee leaves your company. However, with most of these other factors, the responsibility falls with your company to make sure your employees feel seen, heard and valued.
Why is employee retention crucial for an organisation?
Before we dive into our 14 tips explaining how to improve your employee retention rate, let’s first hone in on the all important why.
Put simply, a high employee retention rate makes logical business sense. When your employees stick around and feel motivated, your whole company benefits. This is because these individuals develop a deep understanding of how your company works and what they need to do to drive your mission forward.
Beyond that, a high employee retention rate also improves workplace culture, enhances productivity and lowers costs.
Improves workplace culture
When people are constantly leaving, it harms workplace morale. On the flip side, when people stay in one place for a long time, your employees develop better workplace relationships, friendships and build trust between each other.
It takes time for a new employee to get up to speed with your workplace processes and workflows. People who have been with your company for a long time will probably be pros at getting the job done, making them more productive and efficient.
Training new employees costs time and money. If you didn’t have to replace people frequently, you wouldn’t have to use these resources on people hours, onboarding and training.
14 employee retention strategies for job satisfaction
A high employee retention rate is the gold standard that all companies should aim for. However, as the saying goes, a goal without a strategy is just a wish. You need to have a plan in place to reduce employee turnover. With that in mind, here are 14 crucial things to consider.
Embrace meaningful, long-term onboarding
Too many companies approach onboarding as a paper-based process. Once the candidate has signed on the dotted line and completed their first day on the job, they think onboarding is complete. This is far from the case.
In fact, this approach can leave your new hires feeling overwhelmed and lost. We advise you to take a more thoughtful approach to onboarding, where you focus on supporting your new hires during the first three months of the job.
Consider using project management software to streamline the process, putting in place training placements, assigning new hires buddies who have been with the company for a while, and adding regular check-ins to their diary so that they feel supported.
Review your employee compensation scheme
Employees don’t work for free, and if they’re working hard for your business, they want to be rewarded fairly. It’s vital that the senior management team and HR department regularly review employee salaries against industry benchmarks to make sure that their people are being compensated fairly for the work they do.
If you can’t afford to up your people’s salaries at present, think creatively about other ways you could reward your people, such as with bonuses or healthcare benefits. In fact, 80% of employees would choose additional benefits over a pay raise, according to the Harvard Business Review.
Up the perks
Sometimes, it’s the little things that make the most difference. Little changes in the workplace — like having a fridge stocked with food for everyone or installing a shiny new coffee machine — can show your employees that you care. Consider reviewing what perks you give your employees.
Other things to consider include birthday cakes and cards for employees’ birthdays or offering shorter working hours in the summer.
Look after your employees’ wellbeing
Employees who are mentally and physically healthy not only perform better, but they’re happier too. We advise reviewing the benefits you offer employees in this area. You could, for example, provide your employees with a discounted gym membership or offer access to a meditation app for free.
Whether your team works in the office or remotely, communication and collaboration is vital to employee retention. If your employees feel lonely or disconnected, they’re productivity will suffer and they might start to look for roles elsewhere.
There are loads of ways you can improve connection between teams. You can put in regular catch-up meetings, host coffee mornings or even arrange a team outing at an off-site.
Make feedback a two-way, ongoing street
Forget the annual performance meeting and encourage your managers to meet with their direct reports on a monthly or quarterly basis. In these meetings, your managers should talk to your employees about their progress and professional goals, so that your people feel motivated to work and improve.
At the same time, make these meetings an opportunity for your employees to discuss any issues or challenges they might have, so that you can catch and resolve potential turnover issues before they start.
Offer training and development
Most employees want to learn, grow and climb the career ladder. Many would like to undertake training programs and qualifications that support their personal development.
If you don’t already, it could be an idea to set aside an annual budget for each employee, which can be used on training and development. If you don’t have the budget for this, consider how your employees could share skills with each other in-house. Lunch and Learn sessions are a popular way for employees to socialise and share skills.
Employees that work hard should be celebrated. Not only does this make them feel good, but it motivates other people in your organisation to work hard too.
Recognition can be anything from a shout-out in a team meeting to a formal reward system. Do what works for your budget, but make sure the recognition feels meaningful and genuine.
Encourage your employees to work to live, not live to work
Is it common for your people to work past 8 p.m. or on weekends? Have you ever had an employee complain about missing a family event because of work? If this is the case, you may need to look at your approach to work-life balance.
Sometimes it’s inevitable that an employee has to stay late at work, but if this is the norm, you’re at risk of driving up your employee turnover rates. A healthy work-life balance is crucial to employee well being and job satisfaction.
If an employee is constantly overworking, they may start to feel stressed and resentful about the workplace environment, which is terrible for your retention rates.
Encourage hybrid working
In light of the pandemic and prevalence of cloud-based tools, more people are now working from home at least some of the time — and many want to continue to do so. In fact, EY found that half of workers would quit if their employer didn’t allow them to work flexibly.
We advise you to review your working arrangements. Are you empowering your people to work from home? Are you being flexible about the times of day people work? If not, why and what can you do to change this?
Equip your managers
It’s an unfortunate truth that a good or bad manager can be the reason an employee stays or leaves. You need to make sure that your management team has the right skills to nurture and support your people.
Give employees the tools for success
IT issues can hinder employee productivity and make your people feel frustrated. Don’t let bad equipment or software be the reason that employees leave your company. Make sure you equip your people with high-performing devices and software so that they can work efficiently.
Address underlying biases at work and when hiring
Inclusion and diversity are vital in the modern workplace, but many organisations hold deep-seeded biases that they aren’t aware of. You should look to address bias in your company with the aim of creating an environment where every individual feels valued and safe to be themselves.
Your organisation can also implement policies to reduce implicit bias before onboarding team members by having the hiring team use “blind hiring” methods. Blind hiring means evaluating an applicant’s resume without seeing their name, location, image and other factors that might subconsciously impact the hiring team’s decision.
Feedback is key
Even with all these solutions in place, it’s still important that you create a two-way dialogue between the leadership team and your employees.
Tools like surveys and polls are an excellent way to check-in with your employees in an anonymous way, so you can gauge an understanding of how they’re feeling at work and improvements you can make.
Ultimately, by following the tips above, you’ll improve how your employees feel about your workplace. Expect to see shrinking turnover rates and increase employee retention rates within a few weeks of implementing these changes.
In the long-term, we think you’ll also find that these amendments alter your employee culture for the better. With our tips in place, you’ll foster a workplace where employees feel cared for, motivated and keen to show up every day and do their best.
About the Author
Mauricio Prinzlau is the CEO of Cloudwards.net, a data and user feedback driven comparison engine for cloud storage services. In addition, he also loves producing educational videos and reviews to help people get the best services for their needs.