10+ Employee Retention Strategies for 2024 to Keep Your Top Talent
We’re living in a unique, unpredictable labor market, with 75% of employers reporting difficulties in filling open positions. Now, more than ever, organizations must do everything in their power to protect their most valuable asset – their employees. Investing finite resources into effective employee retention strategies will play a pivotal role in the success of your organization.
Let’s explore why employee retention matters and the best employee retention strategies HR can implement in the business.
Contents
Why employee retention matters
What are the best employee retention strategies?
Employee retention strategies: Best practices for implementation
Why employee retention matters
Hiring top talent to help you meet your organizational goals is important, but losing an employee is expensive, and not just financially. This is why investing in a proven set of practices, policies and strategies to retain your top performers and reduce turnover is critical.
Let’s explore why employee retention matters in more detail.
- Cost savings – replacing an employee can cost between one-third to double their annual salary when you account for recruitment, hiring and training, which can quickly become expensive.
- Better team morale – when an employee leaves, it usually leaves an open vacancy for a few months, and the rest of the team often has to pick up the workload left behind. This can lead to increased work pressure and stress, which can have a negative impact on performance and morale and lead to even more resignations.
- Knowledge retention – the longer an employee stays at an organization, the more they build up and apply institutional knowledge that is crucial for success, and they are also able to transfer this knowledge to new hires.
- Increased competitiveness – providing employees with opportunities for development and growth is an effective employee retention strategy, which often leads to greater competencies, and can give the company a competitive advantage.
- Sustainable business growth – high employee retention rates mean that you are relying less on hiring new employees to fill vacancies, which can lead to a more sustainable business and long-term growth.
- Better collaboration – the longer an employee stays with an organization, the more familiar they become with its policies and their colleagues’ working styles, which improves collaboration and helps everyone achieve shared goals.
What are the best employee retention strategies?
There are many innovative employee retention strategies that can help you not only attract but keep your best performers. Let’s explore some simple steps you can take in your organization to reduce turnover.
1. Start in the attraction and hiring phase
Employee retention begins during the attraction and recruitment stages. Make sure you have a strong employer brand that attracts the right candidates to your organization. Have a strategic recruitment funnel in place to make sure you are hiring people who have the right skills, characteristics and values to succeed at your organization and drive it forward.
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It’s equally important to be transparent during the hiring phase when it comes to the working culture at your organization and the specific role in question to manage expectations and ensure you are able to deliver what you promise.
2. Strengthen your employee onboarding
Research by Brandon Hall Group found that strong employee onboarding can boost employee retention by 82%. Given that large companies lose up to 16% of new employees within the first six months, a well-structured onboarding process is a key step to minimize new hire attrition and retain the talent you’ve just invested heavily in.
New hires are generally always keen to integrate well into the organization, perform and impress in their new roles. But a poor onboarding process (or lack of one) can prevent new hires from knowing what they need to do to succeed and leave them feeling unhappy at work.
The onboarding process begins as soon as your candidate signs their offer letter and only ends once they are able to autonomously do the role you hired them to do. So it’s important to consider all key stages of the onboarding process: preboarding, the first day, the first week, the first 90 days, and the end of the first year.
3. Offer flexible work arrangements
Following the pandemic, people have started to redefine their priorities, and many employees now value remote or more flexible ways of working. A 2022 ADP survey found that 64% of Americans surveyed would think about looking for a new job if they had to return full-time to the office.
Being able to work flexible hours to accommodate childcare or attend a hospital appointment in the middle of the day, will make employees feel like their needs are accommodated and considered, and that they are more in control of their time, even if they still work the same number of hours.
Other work arrangements such as remote work, hybrid work, part-time, job-sharing and a compressed workweek options can all greatly increase employee satisfaction without harming performance.
Collaboration is essential in most organizations, so establishing some core “in-office” days, or encouraging employees to make their own decision on when to work from home while making sure it doesn’t harm the collaborative values of the organization can both be effective compromises while helping employees maintain a better work-life balance.
4. Create a compelling employee value proposition
Your employee value proposition (EVP) is your unique offering as an organization to your employees. A compelling EVP considers important elements, including benefits, opportunities for growth, work-life balance, and organizational culture. Different things matter to different demographics of people, and it’s important to cater to these different groups and create an attractive proposition that helps you stand out from your competitors.
The key question to ask yourself is, “Why should an employee stay with you?” A compelling EVP will ensure your employees stick around.
Perhaps you are prepared to offer an entirely remote work setup, or unlimited vacation days, an attractive pension plan, or flexi-time. Think about what you are prepared to offer employees, what aligns with your values, and then make sure you follow through on delivering it.
5. Focus on employee development & career pathing
According to McKinsey & Company, the number one reason employees left their jobs between April 2021 and April 2022 was the lack of professional development and progression opportunities. But a workplace learning report by LinkedIn states that 94% of employees are willing to stay with an organization longer if it invests in their development.
Naturally, you should only invest in training if it helps you achieve an organizational goal, however training improves productivity, performance, engagement, satisfaction, and retention rates. Providing opportunities for further growth and development helps your employees feel valued, and see a future with you.
For example, Hilton aimed to tackle a skill deficit amongst new employees through a tailored life skills training named Passport to Success. The aim was to help employees manage guests’ problems with greater empathy while remaining professional. A recent survey of supervisors found that of the Hilton Team Members who received the training, 96% were retained after six months, while 40% were promoted.
6. Prioritize total well-being
Work-life balance is a hot topic right now, and following the pandemic, employees are placing greater importance on their total well-being and striving for a healthier balance in all areas of their lives. Many people are opting for part-time roles or opting to work for organizations that make their well-being a priority and don’t encourage a toxic, “hustle” culture where hefty workloads and impossible deadlines must be met at all costs.
While remote and flexible work options can help to create a better work-life balance, it will still be hard to achieve if employees have too much work and not enough hours in the day to complete it, or are actively encouraged to answer phone calls and emails outside of work hours, and even while on vacation.
Managers should strive to check in regularly with their team to ensure they can handle their workload and communicate openly about it. Unnecessary meetings and admin tasks should also be stripped back so that employees can spend time on their most valuable tasks, which help drive the business forward.
It’s important to be mindful that total wellbeing does not just relate to physical health but also your employees’ mental, social, financial, and career well-being. Focusing on all of these aspects will help employees maintain their health on all levels, and stay productive. Plus, when you actively show employees that you care about their well-being, they are far more likely to remain loyal to your organization.
SAS found the investments they have made in employee health and well-being have led to a significantly low turnover rate (about 4%, while the industry average is 15%).
7. Work on DEIB
A Culture Report by the Achievers Workforce Institute found that belonging plays a key role in organizational success. 40% of those surveyed with a strong sense of belonging rarely consider looking for another job, versus 5% of those with a low sense of belonging.
Promoting diversity and inclusion at your organization can help foster stronger teams and a greater sense of belonging amongst everyone. This can be encouraged through your hiring practices and by creating an inclusive culture. Not only can this have a positive effect on retention rates, but also productivity rates and your employer brand.
8. Offer fair compensation and benefits
While different employees value different things in a job and place of work, compensation remains an essential component of any organization’s retention strategy. Even if an employee feels greatly valued at work, they are likely to look for another opportunity if they believe they are not compensated fairly for the work they do.
It’s important to be transparent with your pay structure and create a simple pay policy to attract and retain the best people. It’s equally important to regularly assess industry compensation standards and have a strategy in place to reward your top performers, for example, bonuses and regular wage increases.
Benefits also play a crucial role. Forbes reports that almost 6 in 10 employees see a company’s benefits package as the most important non-salary factor when considering a job. And perks like lower healthcare premiums, flexible hours, and greater parental leave can often make the difference between an employee staying at your company and searching for a new role.
9. Provide effective performance management
When done in the right way, performance management helps your employees understand what is expected of them so that they can work to improve and progress in their careers.
Effective performance management provides employees with learning and development opportunities, a greater understanding of the role they play in meeting organizational goals, and helps them see their progress at work and understand what they need to do to get promoted. It also helps them feel more valued, which in turn boosts engagement and makes them more open to receiving constructive feedback and doing what they can to improve.
When an employee can clearly see their career path at your organization and understand how to progress, they are much more likely to stay.
10. Recognize employee contributions
A Gallup/Workhuman survey discovered that when employees feel recognized and valued for their work, they are 56% less likely to look for a new job, yet only 18% of employees believe their organization has a strong recognition culture.
Organizations should actively encourage managers to recognize their team’s work and also offer department or company-wide recognition for those who go above and beyond and exceed all expectations.
Zappos is famous for being a company that puts its employees first, and this is a key part of its employee retention strategy. They are proactive in recognizing top-performing employees, and this is one of many strategies that has led to a retention rate of 85%.
11. Foster strong management and leadership
A Goodhire survey found that 82% of those surveyed would potentially leave their job because of a bad manager. So, what can organizations do to improve leadership?
Ensure that performance reviews account for management skills and offer regular training and coaching to managers of all levels, even more so for those who are new and in their first managerial position.
Covenant Healthcare sought to improve the emotional intelligence of more than 200 leaders by applying evidence-based solutions to soft skills. The result was that leaders began to use their emotional intelligence skills to develop and engage their employees, which improved productivity and team unity.
Employee retention strategies: Best practices for implementation
There are some key steps organizations can take to implement employee engagement and retention strategies and maximize their effectiveness.
- Collect employee feedback – regularly conduct stay interviews to find out what your employees like about working at your organization, and identify key areas of improvement. Make the changes needed to improve your retention rates.
- Track employee turnover and employee retention metrics – knowing who stays at your organization and who leaves will help you design more targeted employee retention strategies. For example, if you notice that it’s predominantly women who leave your company after a year (while men stay), then you could take a deeper look at your promotion rates, salary data, and other potential reasons that drive them to leave.
- Encourage open communication between employees, managers, and leaders – if employees feel comfortable expressing their concerns and ideas to managers and leaders, these issues can be proactively addressed rather than building up and snowballing. Solutions that boost employee satisfaction can be implemented, which helps to build a culture of mutual respect and trust.
Key takeaways
- Why employee retention matters: Employee retention is important because it can save you money, boost team morale and knowledge retention, increase your competitiveness, increase business growth, and lead to better collaboration.
- The best employee retention strategies: The best retention strategies focus on all stages of the employee lifecycle, from attraction, to hiring, to onboarding, and beyond. Taking simple steps like providing fair compensation and benefits, flexible work arrangements, performance management, recognition, and total well-being can help you retain your top talent.
- Best practices for implementation: Collect regular feedback from employees who stay and leave, track turnover and other key metrics, and encourage an open line of communication between employees, managers, and leaders to build a culture of trust.
FAQs
Employees are leaving organizations in pursuit of jobs that offer more flexibility, place value on their well-being and work-life balance, and offer more attractive compensation and benefits. If an employee doesn’t feel valued or respected, does not believe they are being paid fairly for their contribution or feels like they have no control over their working schedule, they are more likely to leave.
The five main drivers of employee retention are: cost savings, knowledge retention, increased competitiveness, sustainable business growth, and better collaboration.
Some examples of effective employee retention strategies include attracting and hiring the right people, improving your onboarding process, offering flexible work arrangements, prioritizing total well-being, working on DEIB, providing fair compensation & benefits, effective performance management, and recognition, and fostering strong management and leadership.
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