We're living in a very different professional era than just a few years ago. And with this change came a shift in what it takes to keep top talent onboard. Remember when ping-pong tables and unlimited coffee were synonymous with great company culture? Well, people are rightfully asking for more thoughtful employee experiences. Band-aid solutions of the past aren't making the cut anymore.
Employees want to feel heard, appreciated, and supported. To do that, managers must stay attuned to how people feel at work so that they can put real change into play. The key to nailing retention is to be proactive at all times, instead of only reacting when turnover is on a hike.
Don't wait to act until you're handed a letter of resignation. If you sense your team is struggling (or if they simply aren't thriving), remember: there's always something you can do to help. Ready to get started? Read on to learn about top strategies to keep employees engaged and happy at work.
Why is employee retention so important?
Before we take a look at what the most effective employee retention strategies are, it's important to understand why employee retention is so crucial. It goes without saying that it's good for business, but what exactly are the benefits of employee retention?
It helps your bottom line
Companies that keep their workforce going strong can reinvest the money they would've spent on hiring new employees. And when you consider that each departure can cost around a third of an employee's annual salary, the potential financial gain is significant.
Losing an employee is costly in more ways than one. In fact, the business impact happens both on the financial and on the human side (which can still impact your profitability down the line).
It increases engagement
Employees who remain engaged with the organization tend to be more motivated and have higher levels of satisfaction. So much so that engaged employees are 23 times more likely than disengaged employees to recommend their organization as a great place to work, according to Gallup.
Numbers like this reflect a workplace that continuously prioritizes employee retention within its engagement strategies, instead of tackling them separately.
It cultivates better customer service
Did you know that there is a direct and positive correlation between companies that retain their best employees and those that also retain their best customers? It's simple, really. Happy, engaged employees who have great experiences at work are more likely to relay their positive sentiments to their customers, ultimately creating a better experience for them as well. This situation is a clear win-win for everyone.
It supports greater efficiency
It comes as no surprise that when employees get to focus on their roles and gel with their team, they're ultimately more efficient. When employees leave the company, it can cause a real disruption for others.
From having to train new employees to asking others to cover tasks that may not necessarily be their responsibility, it can definitely throw off the momentum of the rest of the team.
It fosters a better workplace culture
Solid relationships are worth their weight in gold. Maintaining professional and personal bonds with fellow employees over time fosters a better workplace culture. Employee retention strategies play a big part in this as they create opportunities to build these relationships, foster camaraderie, and keep everyone aligned and motivated.
13 Employee retention strategies for an engaged workforce
While the costs and impacts of employee turnover are evident, the good news is you can minimize or even avoid them altogether. There are plenty of effective employee retention strategies you can implement to keep your entire workforce feeling engaged, valued, and wanting to stay for the long haul.
Did you know? Gallup found that 48% of American workers are actively looking for new job opportunities. The silver lining? That same study highlighted that 52% of voluntarily exiting employees felt their manager or organization could have done something to prevent them from leaving.
From defining core values to presenting a clear career trajectory, to showing your employees that they matter on both a professional and personal level, these effective employee retention strategies can make the world of difference:
1. Think about retention from the start
Retention strategies shouldn't only kick into crisis mode after a wave of employee resignations. If you want long-term success, it's important to focus on employee retention from day one. Just because an employee joined your team doesn't guarantee they'll stay long term. Your onboarding process is what makes them stay past the 90-day mark.
A great employee onboarding experience sets the tone for a person's time with the company. When planned with care and intention, employee onboarding plans help new team members feel valued and connected to the team. This is key to ensuring retention because it boosts their engagement and commitment to the organization.
2. Clearly define your mission and values
When employees feel a sense of purpose within the company, employee retention also tends to increase. And having a sense of purpose starts with defining your company's mission and values. Not only does this give employees something to get behind as a collective, but it also helps attract talent that shares these values.
Having everyone on the same page helps set standards, guide actions, and encourage alignment (which we'll get to next!).
💡Try this: Make your mission and values clear and concise, introduce them from the beginning, and explain how they translate into concrete actions.
3. Get aligned on company objectives
Much like defining your mission and values gives employees a sense of purpose, so does aligning on company objectives. Every employee should understand why their work matters and how their contributions are pieces of the puzzle.
When people work towards common objectives together, team synergies become more powerful, and great things ensue. True alignment encourages employees to collaborate as a team, have effective communication, and respect what each person brings to the table. This makes your company feel like a well-oiled machine with greater momentum and sense of purpose for all.
4. Set clear expectations
Setting clear expectations for each employee is also key. That includes deciding what success means to you and sharing it with your team. This helps clarify each employee's role and responsibilities and enables them to set attainable goals. Not only does this lead to better performance and employee confidence, but it also paves the way for career growth.
When employees feel they don’t have a clear outline of their role, a path for their professional development opportunities, or expectations in the way in which you'll evaluate them, it can cause frustration and a lack of purpose. If ignored for too long, these feelings can cause people to start looking for a new job elsewhere.
Align expectations and make sure employees feel satisfied at work by booking a one-on-one to clarify roles and responsibilities.
5. Provide fair pay and compensation
Great talent is valuable, so employee compensation should reflect that. If employees are considerably underpaid compared to fair market rates, your turnover will likely rise. While it isn't the primary motivator of retention, salary is the main reason employees seek new opportunities in the first place. And it's especially the case in today's competitive labor market.
It's important to pay your employees well if you want them to stay and grow with your company. If they feel undervalued, they’ll undoubtedly find a company that will compensate them fairly.
6. Come to the table with competitive benefits and perks
As we've already explored, pay alone doesn't make for satisfied employees, and it won't make an employee stay with your company. Benefits, time off, and other forms of compensation are all part of the mix, too.
These days, the non-negotiable staples include:
- Quality health insurance
- Ample vacation time and sick days
- Paid parental leave
- Retirement savings plans
If you want to kick it up a notch, you should also include benefits like tuition reimbursement, flexible schedules, health and wellness budgets, and other financial incentives (like stock options).
Employee well-being is a crucial part of an employee retention strategy. So if you can enhance it with your benefits package, your team is sure to appreciate it.
7. Prioritize healthy work-life balance
Saying that work-life balance is important would be an understatement. Now more than ever, it should be an absolute priority. Gone are the days of neglecting one's well-being for the sake of their job. Today's climate has put the focus back on physical and mental health as well as personal and family time. And employees expect their employer to be respectful of that, and even accommodating.
In fact, a study by Oracle revealed that 88% of employees said their meaning of success has changed since the pandemic, with work-life balance (42%), mental health (37%), and workplace flexibility (33%) now top priorities.
Work-life balance benefits both the employee and the company. When employees feel stressed or lack a sense of balance, they tend to become disengaged. This can lead them to make more mistakes, miss work, or even quit their job, which is exactly what every company wants to avoid.
How does your team rank on the wellness front? Find out and uncover valuable insights with these 30 wellness survey questions.
8. Equip employees with the technology and tools they need
In the spirit of revolutionizing the way we work and communicate these days, we must remember that technology plays a huge role.
Having the right technological tools in place from day one can shape an employee's experience from the jump. Technology can help employees ease into processes, feel in control of their work environment, and enable them to feel empowered, independent, and productive.
This is especially true for remote work. Having the most advanced equipment and tools sets employees up for better performance. When you fail to do so, you're setting them up for frustration, wasted time, and even failure.
9. Train managers to be leaders
Great managers understand the role they play in employee retention. They build trust with employees, provide support and mentorship, encourage career development, and most importantly, know how to lead the pack. Training them to be capable of this to their best ability is pivotal.
When managers and employees have healthy communication, everyone feels part of the team, rather than isolated individuals. It makes for a healthier team that's more committed to the company’s long-term success.
Managers can significantly improve their team's engagement levels with the right leadership tools and listening mechanisms. They'll be equipped to act on pain points straight away, lowering the risk of employee unhappiness and dissatisfaction.
10. Give employees a voice and make them feel heard
If you want to know how your employees feel or what they need to feel better and more productive at work, ask them! Giving employees a voice and frequent opportunities to share their feedback is worth its weight in gold. Not only do they feel heard, but it also gives managers and employers valuable insights into what is and isn't working within the company.
Encouraging employees to share their thoughts — whether it be about the work environment, management styles, communication, or anything else — fosters a positive feedback culture and creates a feedback loop. By acknowledging the feedback, creating and communicating action plans, and acting on them, managers can build stronger relationships with their employees. This leads to higher engagement and better employee retention.
Thirdbridge fully revamped its employee experience by centering its people strategies around employee feedback shared on Officevibe. Read their full success story to learn more.
11. Foster positive work relationships
They say that your vibe attracts your tribe, and the workplace is no exception! Just like with any friendship or relationship, communication is key. Communication builds trust, and trust is essential for longevity and retention.
For employees to have great relationships with each other, it's important for managers to encourage open communication, build trust within their team, and encourage collaboration.
With today's remote and hybrid options, it's even more important to foster these relationships and keep connections strong, even without physical social interaction.
Does it smell like team spirit at work? Use this quick team spirit assessment template on Officevibe to find out.
12. Nurture a unique company culture
Great company culture isn't something you can force into existence. But it is something you can cultivate, nurture, and grow with the right mindset, values, and approach. Building a unique and positive culture requires consistency and initiative — and it's worth the effort!
Everyone contributes to company culture, so if you want to reap the benefits, be sure all employees feel included. You can foster a positive culture by embracing diversity and open-mindedness.
At the end of the day, your people make your company a success on both a professional and a personal level, so putting a focus on human-generated culture is key.
13. Celebrate successes
There's nothing worse than working hard day-in-day-out with little to no acknowledgment. It makes people question why they do what they do, and if they should start looking elsewhere.
But it doesn't have to be like that. Recognizing people's successes at work and sharing kind words doesn't need to take a lot of effort. And remember: it's not just the big wins that deserve all the shine. Little victories call for recognition too, and they have the power to make someone's day.
Big or small, employee recognition is a powerful tool to make people feel valued. And when people feel appreciated, they're more likely to stay on board.
✨ Add a little sparkle to a star employee's day with one of these eight tips to increase recognition in the workplace.
Implement and assess employee retention strategies
While these are all great methods worth implementing to help increase employee engagement and retain employees, you must remember that no employee retention strategy is one-size-fits-all. It's up to HR managers and leaders to craft the right retention strategy for their company and employees.
The best way to get the ball rolling is by collecting feedback through employee retention surveys, one-on-one meetings, stay interviews, and exit interviews. The data gathered is a powerful tool for recognizing what needs improvement, and taking concrete actions to help everyone feel aligned and engaged, with the ultimate goal of increasing employee retention rates.
Calculating employee retention rates
In addition to having a great employee retention strategy at play, it's also important to calculate, understand, and keep a pulse on your employee retention rate. Here's a simple way to crunch the numbers:
Step 1: Divide the number of employees on the last day of the given period (usually one year) by the number of employees on the first day.
For example: 23 employees at the end of the year ÷ 20 employees at the start of the year = 1.15.
Step 2: Multiply the number you got from step one by 100.
For example: 1.15 × 100 = 115% retention rate.
While there is no magic number, it's good to know that a good employee retention rate is considered to be 90% or higher — or, in others words, the employee turnover rate is 10% or less. A high retention rate is a great sign that your employee retention strategies are effective and that your employees are happy and engaged.
Increase employee retention with an employee experience solution
The strategies shared in this article are sure to help you increase retention if you're just getting started. Once you've implemented them, or if you're more mature in your HR practices, you can take it up a level by building a retention game plan unique to your business.
Tools like Officevibe's employee experience platform can help you get there by allowing you to gather feedback regularly, measure the effectiveness of your retention strategies, and adjust them as needed. By creating a data-driven approach to employee retention, you can continually improve your efforts to retain top talent and create a positive work environment.