Retaining top talent on your team is increasingly a challenge for organizations. Here are 10 tips that you can action to make your best people want to stay.
You’d think the biggest hit the job market could take was from the pandemic-induced layoffs. Turns out, the shocker came only afterward with employees voluntarily quitting their jobs.
This phase, dubbed the Great Resignation, brought on about 4 million resigns in the second half of 2021 — an almost 20-year high.
The problem here? It’s not just time-consuming to replace employees who quit but also costly. In fact, demand for talent is going to increase over the next decade as the US workforce is expected to grow only slightly (0.7%), thanks to population changes.
One thing that can save your business from these challenges though: implementing employee retention strategies. That is: instead of worrying over where and how you’ll find replacements for departing employees, focus on retaining your existing people.
In this guide, we’ll talk about just that as we look into reasons why employees leave and then share nine proven retention strategies to reduce employee turnover.
Let’s dive in.
Pew Research Center research reveals the top reasons why employees left jobs in 2021 – the year that saw the most folks voluntarily quitting their jobs.
These reasons include:
Limeade research also reveals burnout as another reason why 40% of employees depart.
Yet another survey reveals 82% consider quitting their jobs because of a bad manager. A Visier survey of 2,100 UK employees also confirms this — revealing 43% have left a job because of their manager.
The takeaway? The retention strategies you implement should be centered around growing employee engagement — making them feel valued and respected, giving them opportunities to grow, and compensating them fairly while assigning work that doesn’t burn them out.
The costs of hiring new people tend to be higher than the cost of retaining them. In fact, making a new hire in the US costs an average of $4,000, making it a leading reason for retaining talent.
Besides, organizations lose more in lost productivity and the time it takes to find and take the new employee through your onboarding process.
Additionally, until you fill the role, there’s an increased workload on other employees as they take on the extra work of the person who quit.
Given this immense impact, a Centre for American Progress study estimates that the actual cost of hiring new people could be anywhere between 20-213% of the leaving employee’s salary with the exact depending on their role and seniority.
Not to mention, 57% of organizations admit they can’t find the right skills at the right price to replace employees that leave. All this makes implementing employee retention strategies uber-important.
So with that, let’s take you through proven strategies to boost employee retention alongside examples of how other companies motivate employees and encourage them to stay:
Making sure employees are paid their worth is the first step to increasing employee job satisfaction. In fact, 37% of job changers say roles offering better compensation attract them.
Take it from Netflix. The streaming giant has flipped the traditional employee compensation formula to retain top talent better. Realizing rock star performers easily deliver about 100 times better than average performers, Netflix offers its employees pay that’s slightly higher than the industry average. As a result, Netflix pays the top median employee salaries among its peers.
The simple mindset that Co-founder, Reed Hastings follows: hiring a few rockstar employees over 10-25 average ones not only increases their employee retention rate but also improves the overall company productivity and work output.
A Limeade survey found that 29% of job changers, the largest group of their survey respondents, received a 10-19% salary increase. 13% even took a pay cut for the new position and 23% shared they were paid the same amount.
The take-home message here? Good compensation alone won’t retain employees — better benefits will. In fact, 88% of employees give benefits ‘some consideration’ or ‘heavy consideration’ before accepting a new role.
One way to stand out here: give up the one-size-fits-all benefits approach. Instead, talk to your employees to provide customized benefits packages that vary based on their age, life stage, ethnicity, and income.
In taking this approach, your organization will be able to provide benefits packages that genuinely meet your people’s needs, growing employee loyalty.
With the pandemic breeding burnout and stress among employees being at an all-time high, taking steps to better employee mental health is a must to retain them.
To this end, you can take various steps. One example comes from Hootsuite’s employee mental health initiative: taking a company-wide Wellness Week where everyone unplugs from work together.
Hootsuite has also recently introduced half-day Fridays in summer months — what they’re calling Owly Quality Time where everyone logs off for half of their Friday.
More ideas for controlling stress at your workplace include:
40% of the employees quitting jobs say they’re looking for jobs offering flexibility to work remotely.
Employees also favor a hybrid work arrangement. In fact, it’s the most preferred with 54% of them saying they’d ideally like to split their time working at home and in the office. Some 37% admit they prefer working exclusively from home. And only 9% want to exclusively work from the office.
Keep in mind though: while quantitative data from employee surveys like these are helpful in decision-making, it’s essential you gather qualitative data as well to learn employee preferences.
What’s more, flexible work arrangements aren’t limited to offering hybrid or remote work solutions. Instead, flexibility extends to offering employee-specific work arrangements such as contract working and phased retirement.
Unilever is leading the space in this with its U-work initiative. According to it, employees are released from fixed employment roles and given the freedom to choose which projects they want to work on. They can then enjoy some of the pay, security, and benefits of the permanent roles — a flexible approach that takes from the gig economy while helping employees strike a balance between their personal and professional lives.
The traditional understanding of the way people work centers around assumptions that they inherently don’t like to work and avoid responsibility, which is why they need to be directed and controlled.
However, in his book, Brave New Work, Aaron Dignan points out the modern understanding of how employees work:
Psychologist, Edward Deci’s research on human motivation backs this theory, confirming it’s the right one to treat your employees. In fact, his research reveals that people are naturally curious and open to exploring. And so, the more autonomy they have, the more motivated they are.
Meaning, taking this people-positive approach and creating a culture of autonomy and trusting your people helps you improve employee morale.
In fact, Harvard Business Review finds that in comparison with folks working at low-trust companies, folks working in high-trust companies report 74% less stress, 50% higher productivity, 13% fewer sick days, 76% more engagement, 40% less burnout, 106% more energy at work, and 29% more satisfaction with their lives.
The idea is simple: assume and expect the best of everyone — give them responsibilities and let them take their decision instead of micro-managing them. Netflix follows the same. Its culture encourages employees to call their shots with little to no reliance on leadership. This motivates employees, growing their sense of responsibility even more.
Simply offering remote or hybrid work arrangements won’t cut it if you aren’t complementing it with encouraging work-life balance.
Put another, proactively take steps to create a culture that focuses on employee wellbeing. Some ideas to create work-life balance include:
Most of all, provide flexible work schedules. In particular, give parents more control over their schedules instead of expecting them to work through defined hours.
To do so, set clear expectations and goals with your employees. Then leave them with the responsibility to achieve those goals by working whatever hours suit them. This helps employees balance their personal and professional lives, assists you in creating a people-positive work culture, and helps parents with childcare management — improving their productivity.
94% of employees share they’d stay at a company longer if it’s committed to learning and development — making an investment in learning an effective employee retention strategy.
A few helpful ideas to get this strategy in motion:
Use resource management software to keep tabs on employees’ current skills and interests and new skills they want to build. Then assign them projects that’ll help them build that skill.
Instead of assuming which courses, masterclasses, or sessions employees would enjoy, ask them for their feedback. Also, make sure you get learning and development trainers on board from the get-go so they can get feedback from employees who may not open up to their managers.
Learning happens when we embrace the mistakes that we make and learn from them. It’s why Howspace recommends instilling a growth mindset by encouraging employees to shift their thinking from ‘I can’t do it’ to ‘I can’t do it yet’ to get over mental roadblocks to growth.
The team at Howspace also has a Slack channel (TIFU — today I f*cked up) dedicated to people sharing their mistakes and the lessons they learned from them.
Lastly, it’s important you promote multi-directional learning. In that: learning shouldn’t be limited to peers, leaders, trainers, or managers sharing what they’ve learned with others. Instead, encourage everyone to share what they’ve learned with each other for a wholesome learning session.
Recall that managers are another key reason why employees leave.
In fact, a survey reveals majority would leave their workspace if their manager isn’t honest and authentic. According to the same survey, employees say they appreciate managers who:
Keeping this in mind, an effective way to train managers is to provide them with personalized leadership coaching which is proven for helping them develop or improve their leadership skills.
BetterUp even confirms managers receiving coaching see a 52% decrease in burnout, a 31% increase in team performance, and a 9% increase in team innovation.
Top-down changes in your company culture see a success rate of 34% only. However, a people-first approach where you seek and implement employee feedback increases your odds of success by up to 58%.
Therefore, it's crucial to gather, listen to, and take action on the feedback you gather. However, make sure you aren’t limiting yourself to gathering feedback in only a handful of ways.
Instead, source feedback using surveys, polls, and one-on-ones. Make sure you also offer employees the opportunity to share their feedback anonymously. This way, folks who are hesitant in bringing an issue forward or those who are shy can share their thoughts.
What’s more, diversify the channels to share feedback so that employees can communicate their concerns and ideas using the communication medium that suits them the most.
As someone progresses through their career, their skills and confidence naturally grow - but their personal aspirations and life circumstances will also change. If you make the mistake of viewing your employees in a fixed, unchanging way, you risk losing these experienced individuals as they search elsewhere to find a role that feels like a better fit for them right now.
Resource Management consultant and former Director of Resource Management at Baker Tilly, Christine Robinson, says that retaining employees in the long term relies on keeping up-to-date information about your people. Don't just rely on what was true about someone when they first joined the company: ask ask ask!
I think it’s a mistake to have a kind of static, immovable file around someone. The idea of the “permanent record”, so to speak. You might have it on file, for instance, that a particular individual doesn’t want to travel. Well, maybe that was true when they were a new joiner. Perhaps there were personal circumstances at the time that would have made travel difficult. But a couple of years later, maybe things have changed? Perhaps they are in a position now to move on and do something else. When an employee has an opening in their schedule, it’s essentially an opening in their career path - ask them what they want to do. Encourage them to express their aspirations. Be prepared to evolve with the employee; evolve your understanding of that person.
In summary, effective employee retention strategies boil down to making your employees feel valued.
Consider providing employees:
Before you take any steps though, make sure you gather your staff’s feedback on what could inspire their loyalty.
And don’t forget to use a resource management tool like Runn to manage employee workload, see when their next vacation is due, and keep tabs on new skills they want to build. This way, you can curb employee burnout and stress and promote a healthy work-life balance.
