9 Effective Employee Retention Strategies

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Struggling to keep your employees can result in high turnover rates and affect your company’s ability to reach their goals. Developing an effective employee retention strategy can improve employee satisfaction rates and decrease your turnover rates.

We have put together nine effective employee retention strategies, as well of benefits of employee retention to help you improve your employee turnover rate.

Key Takeaways:

• Having a high employee turnover rate can result in losing essential employees, limit productivity, and effect the companies financial resources.

• Creating positive advancement opportunities and investing in your employees career can help you keep employees longer.

• Having clear expectations and having open communication with your employees can increase their engagement with managers and higher ups and make them feel more valued.

What is Employee Retention?

Employee retention is one of the most important, and most overlooked, facets of running a successful company. Research consistently finds that retaining top talent is essential for maintaining institutional knowledge, high morale, satisfied customers, and even sales growth.

Employee retention is the organizations goal of keeping productive and talented workers and reducing turnover. They do this by creating a positive work environment to help promote employee engagement. When a company doesn’t have a focus on a positive work environment and showing appreciation to employees, the turnover rate tends to be higher.

Why Employee Retention is Important

Employee turnover is a drain on the company’s staff and financial resources. Losing key employees can limit productivity, damage morale, and cost as much as (or more than) the departing employee’s salary during the process of finding and training a replacement.

While the majority of managers assume that employees are most likely to leave a role because of inadequate salaries, the reality is that a number of factors can contribute to employee turnover, including a lack of effective management, a dearth of advancement opportunities, feeling unappreciated, being chronically overworked, and so on.

This means your employee retention strategies need to be aimed at improving and incentivizing all aspects of the employee experience. In addition to paying your employees well (which remains a critical factor in employee retention), here are eight effective strategies to keep your top talent around for the long haul.

Effective Employee Retention Strategies

1. Have advancement opportunities. When employers invest in their team members by providing them with opportunities to learn new skills or knowledge, it signals an investment in their present and future career growth. Employees won’t stick around for a long time if they don’t have an opportunity to advance their career.

   This could look like paying for employees to attend conferences or workshops, offering tuition reimbursement, creating an in-house mentoring program, and so on. It’s also important to promote from within whenever possible.

2. Establish clear expectations and objectives. When employees feel they don’t have a clear grasp of their job duties, company policies, and the performance metrics by which they’ll be evaluated, it can prove tremendously frustrating and damage morale to the point that employees may be tempted to look for employment elsewhere.

   Communicate with employees to ensure they have a crystal-clear understanding of their job duties, company policies, and so on, and provide employees with regular feedback so they know how they’re being evaluated. Just as important? Make sure these policies are employed fairly in order to avoid having them backfire.

3. Offer a benefits package that is truly beneficial. This should include (but is certainly not limited to) high-quality and affordable health insurance, life insurance, ample sick leave and vacation time, family leave, and a retirement savings plan. Beyond these staples, every company should consider what would truly serve the needs of their employees. Some examples include:

   • Flexible scheduling

   • Stock options and other financial incentives

   • Child care

   • Gym memberships and/or fitness coaching

   • Sabbaticals

   Solicit your employees’ feedback to learn more about the benefits that would truly enhance their lives and wellbeing, and consider allowing for customizable benefits options to account for the fact that different demographics of employees tend to be motivated by different factors.

4. Create a culture of open communication Morale improves significantly when team members feel free to speak their minds, share their ideas, address conflicts and other grievances, and participate in the company’s evolution.

   Ensure that your managers are committed to open, transparent, and respectful communication, and encourage this behavior in every member of your team. An added bonus of these practices is that they will enhance trust in senior management, which is another key factor in maintaining satisfied employees.

5. Make employees feel valued. Employees contribute a huge percentage of their daily lives to enhancing a company’s bottom line, so it’s essential that they feel respected and valued. Make sure employees are treated fairly and that management consistently acknowledges team members for jobs well done and for the effort they put into their work.

   While a simple “thank you” is a good first step, you can provide greater rewards in the form of bonuses, raises, promotions, paid time off, and gifts that provide actual value to employees’ lives. If you’re not sure what rewards would most appeal to your employees, go ahead and ask.

6. Create a positive work-life balance. When employees feel as if their job is too demanding and they no longer have a personal life, they may start to resent their job, which can lead to them quitting.

   Provide an opportunity for your employees to work-from-home, if that option is available, and give them a more flexible work schedule. As long as they are getting their work done, it doesn’t matter where they are working from.

   Also discourage management from contacting employees when those employees are not working. This could include of their requested time off or vacation. This lets them know that you value their personal time outside of work.

7. Don’t overburden employees. All the benefits in the world can’t compensate for chronic overwhelm and burnout. Overworking employees can lead them to losing focus and eventually giving up on their projects. Your employees will have the energy (and the desire) to stick around longer if they aren’t constantly overworked.

   Encourage your team members to prioritize healthy workloads and make sure your managers are modeling these behaviors so employees feel comfortable doing the same. While you might fear a productivity dip if your team members scale back their workloads, research suggests that working less, which typically equates to stressing less, can actually result in even greater productivity.

8. Provide employees with meaningful work. When an employee doesn’t feel like their work is meaningful and is just mindless work, they won’t put as much effort into it. This can result in them being less productive and not caring about the job as much.

   That’s why it’s so important to provide team members with varied tasks, stimulating assignments, and opportunities to make a real difference at the company or in their communities. Philanthropic programs, opportunities for community engagement, social programs to facilitate bonding between coworkers, and unification around a shared vision for the company can all help provide employees with a sense of meaning on the job.

9. Understand why employees stay. Most businesses make a habit of conducting exit interviews, but very few of them take the time to understand why some employees choose to stay.

   Soliciting your team for insights into what compels them to remain at the company is invaluable for identifying the policies that are truly contributing to your employee retention strategy and for learning if there’s any room for improvement. The key is to be open to this feedback and to allow it to shape your internal policies.

Benefits of Employee Retention

• Higher productivity. When employees have been with a company for a longer period of time, they are more skilled and tend to be quicker and efficient at what they do. Having to bring in new employees constantly means less productivity.

• Higher employee morale. Employees are more likely to have higher morale and have more pride in their work. When employees feel as if they belong, the turnover rate will decrease.

• Increased employee loyalty. When employees feel as if their employer values and supports them, they will feel more loyal to their company. This means they won’t be looking for work at your competing company. When employees who care about the company typically feel more inclined to finish their work on time and are honest about the hours they spent working.

• Fewer employee gaps. When you don’t have a high turnover rate, you won’t have to take the time to fill their role. It can sometimes take a while to find the right candidate to fill the position.

  When you have fewer employment gaps, you also avoid the risk of overworking the employees that you already have.

• Improved customer relations. Customers and clients can tell when a company has a high turnover rate. Some clients might not want to have to get to know a new person every time they try to buy something.

  When clients have a personal relationship with an employee, they tend to have a higher feeling of brand loyalty. They will be more likely to return to their favorite staff member to make their purchase and catch up with them.

• Positive company culture. It can be hard for employees to relax and enjoy their work when their coworkers are resigning constantly, and they have to continue getting to know new employees. When your employees stay around for a while, the company culture tends to benefit.

  Employees tend to start feeling like a cohesive group and work better as a team, creating a positive environment for everyone. This can also lead to higher productivity.

Final Thoughts

Here’s what employee retention really boils down to: Do you treat your employees with integrity, as if they are human beings with their own needs, personal lives, and goals who are inherently worthy of respect? If the policies and practices of your company all align with that question with a resounding “yes,” then you’re well on your way to retaining satisfied team members for life.

Author

Taylor Berman

Taylor is a freelance writer from Pennsylvania. Taylor got into writing because she enjoys writing articles that help people and loves creating stories that inspire. She earned a bachelor's degree in journalism and public relations with an interest in communications media from Indiana University of Pennsylvania.