Improving employee retention is a goal for employers across industries. In today’s competitive and candidate-driven market, it is very easy for highly skilled workers to find another job. Moreover, traditional obstacles like long commutes are not important in the age of a digital workplace.

The fact remains – employee retention is a costly business. According to SHRM, total costs associated with turnover can range up to 200% of employees’ annual salary. Moreover, decreasing employee retention negatively affects business’s performance, and it can become difficult to manage.

For all these reasons – we are examining the most successful employee retention strategies you can apply in your company. Take a look at most common challenges that lead to employees quitting their jobs, and how you can address them for a positive outcome.

↘️ Did you know that one of the reasons that employees quit is lack of appreciation for their work? Before you start, get our Employee Recognition and Rewards Solution Buyer’s Guide to help you acknowledge your coworkers, increase happiness, and improve employee retention in your company.

What Is Employee Retention

First things first – let’s define employee retention! Simply, it is the ability of an organization to keep its employees working at it for as long as it can. It can be expressed as a simple figure – for example, company X has an approximate annual retention rate of 89%, meaning that on average, 89 out of 100 employees keep working there every year.

Although it is a plain statistic, it is a very important one. As explained above, employee retention is not only a cost-saving strategy, but a way to improve business performance and ensure stability. This is why many HR Professionals’ effort is aimed at reducing employee turnover.

6 Successful Employee Retention Strategies

There are some industries that are famous for their low retention rate. For example, the retail industry has a seasonal effect and it also has many lower-paying positions in many locations, which all contribute to decreased retention. However, employee retention is becoming a growing challenge for traditionally high retention industries such as the financial industry and energy and natural resources industry.

All industries share the same challenge of an aging workforce and influx of new generations to the job market. Millennials and Gen Z are changing the rules of the workplace: read on to find out how you can improve their employee experience and retain them in your company.

Updating compensation and benefits policy

What’s the problem?

The job market has never been more open. When recruiting, employers are communicating the compensation range and benefits package. Moreover, websites like Glassdoor offer employees information on standards in their industry and in their position.

With a myriad of information at hand, employees can get dissatisfied with their companies’ compensation and benefits policy and realize they would be better off someplace else.

How to fix it

Compensation and benefits policy is a building block of a Total Rewards strategy. Addressing issues in this area can significantly improve employee retention. After all, your employees are only looking to get paid as much as in the next place.

Today, there are many benefits that are even more desirable than an increase in base pay. For example, the remote work option is more attractive than ever, ensuring less time spent in traffic and better work life balance.

It is no surprise that 82% of employees say they would be less likely to quit if they had more flexible jobs. 

↘️ Read how you can leverage compensation and benefits to improve your employee experience.

Improving work-life balance

What’s the problem?

According to experts like Josh Bersin, employee burnout is both a new and an old problem. Especially after the 2020 pandemic and insecurities it brought, many are working hard to make themselves essential to their employers. However, the constant race is taking its toll: employee wellbeing is deteriorating, and work from home is eliminating boundaries of work and private life.

How to fix it

Employers have many techniques at disposal when it comes to improving work-life balance. For one, they should cut the competition culture at its core and insist on employees disconnecting after work. Moreover, it is a good idea to introduce a mandatory PTO policy, as well as to offer work from home options to those that want it.

After all, improving work-life balance will only positively affect your employees’ productivity. Since only 8% see compensation as more important than work-life balance, you can strongly influence your employee retention numbers by addressing work-life balance issues.

Recognizing employees’ work and milestones

What’s the problem?

It is simple – employers are not recognizing their employees’ work. Many managers still believe that there is no need to thank their team members for good work. In many workplaces, work anniversaries are not commemorated properly, especially if they are not the “big ones”. Lack of appreciation leads to decreased employee motivation and drives employees to look for other opportunities, thus decreasing employee retention.

How to fix it

Did you know that a whopping 32% of workers leave their jobs because they are unsatisfied with the recognition for their contributions?

In other words, employee recognition plays a huge part in employee retention strategy. Here are some useful resources that can help you learn ins and outs of employee recognition.

↘️  Employee Recognition: The What, Why & How (+ Creative Ideas) 

↘️  5 Reasons Why You Should Recognize Your Employees’ Work

↘️  20+ Employee Recognition Program Benefits and Ideas

↘️  Employee Recognition Ideas Your Employees Will Love

↘️  Social Recognition: Why to Encourage it and How 

Teaching managers how to manage

What’s the problem?

One of the most common reasons that employees quit is poor management. According to Gallup, 42% of employees quit because of managers who overwork them and have unrealistic expectations of them. As you can see, this is a huge contributing factor to decreasing employee retention.

Independent of their management style, leaders should support employees to do their best work. Sadly, 58% of managers say they never received any management training. 

How to fix it

Managers should be properly trained – for one. In order to improve employee retention, managers can really do the most. They are the ones communicating with employees on a daily basis. Moreover, managers are the ones that employees expect more recognition and feedback from.

Therefore, invest in your managers! Train them leadership skills, empathy, and collaboration management. Moreover, enable managers to conduct employee surveys and measure progress as they implement new initiatives.

Offering development opportunities and plans

What’s the problem?

Employees are ambitious and want to learn. They do not want to stay in the same position forever. Moreover, most employees want to learn and get the chance to improve their position, compensation, and benefits. According to Gallup, an impressive 87% of Millennials say that professional career growth and development opportunities are important to them in a job.

However, many employees still feel they are not reaching their full potential. Many also do not know how they can advance their careers, nor do they feel like they have support to do so in their own companies.

How to fix it

Introducing strong employee development policies and creating individual employee development plans can significantly increase employee retention rate. In other words, you need to outline to employees what is expected of them in order to land a promotion. After all, 93% of employees say they would stay at a company longer if it invested in their careers. 

Improving communication

What’s the problem?

Many employees experience communication difficulties in their companies. They might not communicate or collaborate well with their colleagues, or they rarely talk to their managers. Perhaps they want to hear more about the company’s direction from their leaders, or need clarification on a new company policy.

Either way, poor employee communication can lead to total apathy or even irritation. In other words, employees can get frustrated with poor communication, which can drive increasing employee turnover statistics. 

How to fix it

86% of employees believe that workplace failures are caused by lack of collaboration or ineffective communication.

Therefore, why not improve your internal communication strategy and positively affect employee retention? Here are some quick tips on how to do it:

• • Do not overcrowd your employees’ inbox. Segment your audience and send targeted messages only to those who need to read them. Try out an employee communication platform like Nurture to streamline your communication efforts.
  • Send out a regular employee newsletter and let everybody know what is the most important company news.

• Include your C-level executives in your communication strategy. People want to hear more from their leaders.
• Enable your employees to communicate effortlessly no matter where they work from.

Improve Employee Retention by Offering Top Notch Employee Experience

There is another crucial factor for increasing employee retention: technology. Nowadays, employees expect lean, user-friendly yet robust apps in all areas of their work.

At the same time, employers and HR Professionals need powerful solutions to design best experiences for their employees. There is no one-size-fits-all solution in the employee experience area, as every company encounters different challenges.

Therefore, get in touch with our experts and see how our Employee Experience Platform can help you increase your employees’ happiness, productivity, and retention.