10 proven employee retention strategies to reduce employee turnover
According to a Gallup poll, more than half of US employees are on the lookout for a new job. If your team members feel overworked, underappreciated, and stuck in their role without a clear career advancement path forward, the allure of greener pastures elsewhere may feel too tempting to pass up.
The good news: with the right strategies, companies can reduce turnover and improve employee retention. In this post, we’ll take a close look at why not just finding, but keeping talent is so important and spell out tried-and-true strategies for retaining your employees.
What is employee retention?
Employee retention is the effort to encourage people who have been working for a company to keep working at that same company. Retention can minimize turnover, keep employees engaged, and help workplaces run more efficiently. Strategies include everything from offering competitive compensation packages to managing workloads to avoid burnout.
Why is employee retention important?
Retaining employees can make or break companies and is one of the most important HR metrics they can monitor. Here are the biggest reasons why.
Cost efficiency
Recruiting, interviewing, onboarding, and training new employees costs money that you don’t need to spend if you retain existing employees. And with a revolving door of staff, you’re repeating this process ad nauseam and likely taking productivity hits, since newer employees typically need time acclimating to how a company runs and work less efficiently than more seasoned members of your workforce.
According to the Society for Human Resource Management (SHRM), the total cost of hiring a new employee can be up to four times the departing employee’s salary.
Building stronger teams
Teams need time to gel. And individual employees typically need time to gain the skills and experience needed to meet the work demands of a new employer. Employee retention helps companies maintain continuity while ensuring employees have the needed skill sets to deliver consistent, quality work. High-performing teams made up of employees comfortable working around one another can improve morale and make it less likely anyone churns.
Retaining institutional knowledge
While new hires can offer companies fresh perspectives on old problems, an employee who’s been at your company for three years is more attuned to the intricacies of day-to-day work—sometimes known as “tribal knowledge”—than one who’s been on board for three weeks. In fact, one study found that 42% of the skills needed to perform a job are only known by the person currently in that job.
Retention efforts can motivate your most outstanding, knowledgeable, and culture-affirming employees to stick around, which means your workforce has the experience needed to chart a path forward.
10 employee retention strategies
How exactly can companies keep employees around? Consider the following employee retention ideas:
1. Provide career growth opportunities
To retain your best team members, look for any opportunity to help them develop their careers. That includes providing supplemental training to upskill employees, mentorship opportunities that teach entry level team members about skills and experience needed to someday become senior leadership, and even paying for additional education. If employees can envision a realistic career trajectory within the same company, they’re less likely to seek better career advancement opportunities elsewhere.
2. Enhance employee recognition
Acknowledging a job well done can go a long way. Employees tend to be more engaged when companies notice and recognize their hard work. And they’re likely to quit if they don’t feel appreciated.
So make sure you’re spotlighting stellar work across the company. Consider award ceremonies tailored to goal milestones or company values, sending thank you notes—both privately and company-wide—to celebrate outstanding achievement, and rewards like extra vacation days or gift cards. Managers should also take the time to thank their high-achieving employees during performance check-ins and team meetings.
3. Offer competitive compensation and benefits
One of the best ways to better recognize employees and decrease attrition: great pay. Make sure total compensation is competitive with market rates (taking into account your employee’s location and seniority level), provide bonuses or raises along with high performance, and be transparent about how salaries are calculated.
You should also strive to offer a robust benefits package—including quality health insurance, retirement savings, generous PTO, and possibly more fringe perks like wellness stipends—to retain top talent.
4. Promote work-life balance and flexibility
Employees have a healthier work relationship and better job satisfaction when there’s a clear delineation between professional and personal lives. If their workloads constantly consume nights and weekends, they may feel overwhelmed and leave for a role with a better work-life balance.
So encourage employees to unplug outside of work hours and use their available PTO. You should also consider offering flexible remote work schedules so employees can work when they feel most productive, while carving out the necessary time for personal matters as needed.
It also helps when managers and executives lead by example and refrain from demanding people’s time outside of work hours. Managers should also strive to occasionally check in with employees to assess workloads and adjust expectations if plates are too full.
5. Create a straightforward onboarding process
Onboarding can have huge downstream effects on the employee experience. A clunky process—where employees don’t have clear expectations for their first weeks on the job, struggle to make inroads with new team members, and can’t access important information—can lead to costly turnover. In fact, one survey found that 20% of salaried employees quit before their 100th day on the job.
When considering how to retain employees, make sure your onboarding processes are up to the task of leaving a good first impression. Employees should sign required documents, receive work devices and app logins, and have their first day marching orders ahead of time (onboarding software is your friend here). And supervisors and HR managers should take the time to welcome the new team member into the company by introducing them to colleagues and setting clear expectations for what on-the-job success looks like.
6. Build a positive company culture
In a Glassdoor study, almost two thirds of employees mentioned a good company culture as a reason not to leave their current job. Uplifting cultures that retain employees look different company to company, but likely share some traits in common: celebrating team members’ successes, providing mentorship opportunities, promoting a healthy work-life balance, and aligning day to day responsibilities with a meaningful mission employees feel invested in.
Also keep in mind that employees from underrepresented backgrounds are more likely to feel more engaged and comfortable in a workplace culture that values diversity and inclusivity.
7. Conduct stay interviews
Stay interviews are one-on-one conversations between employees and their managers that aim to clarify how engaged employees feel at work and identify areas for improvement. They help companies identify issues early before they snowball into turnover-threatening problems, improve the employee experience, and build trust between employees and leadership. These should be low-stress meetings where employees feel comfortable speaking their peace. And they can often be the difference-maker in retaining or losing talent.
8. Provide mental health and wellness support
Employees want to work for companies that prioritize their mental wellbeing. Instead of just telling your workforce their mental health matters to you, show them. Consider providing team mental health days, health insurance with therapy coverage, and supportive resources for employees dealing with burnout or difficult personal matters. Wellness stipends that employees can use toward gym memberships can also go a long way.
9. Ensure a fair workload distribution
Employees should not only feel equipped to manage their individual workloads, but also that supervisors parcel tasks out evenly across teams. You don’t want a high-performing employee to leave after noticing a colleague in a similar role does half the amount of work and gets paid more. And while you may want to keep assigning tasks to your best employees, if they take on too much work, they’re more likely to get overwhelmed.
So managers should strive to assign a similar amount of work to every employee. The split may not always be dead even, but the distribution should be reasonable.
10. Regularly review employee feedback
To catch issues before they fester, encourage employees to give candid feedback about their experience, workloads, and overall engagement. This can be done through surveys sent at regular intervals (e.g., 30, 60, and 90-day check-ins for new hires) asking employees to rate and comment on different aspects of their work life and through in-person check-ins. You can also glean helpful feedback from exit interviews if you ask offboarding employees why they left.
Once you get the feedback, look it over and see how you can make them feel more engaged. You don’t want to constantly solicit input only to ignore it.
Common reasons employees leave their companies
Now that we know how to incentivize employees to stay, let’s look at what makes them leave. Avoid the following pitfalls to increase employee retention:
1. Lack of career development
Employees don’t want to feel stuck on a hamster wheel, working in the same role for years without a foreseeable career progression. If you’re keen on retaining talent, make sure you implement career development programs and mentorship opportunities that help employees map out their professional lives.
2. Inadequate compensation and benefits
Employees may also quit to start a job with better pay and more benefits. Keep in mind that this may be connected to a lack of career advancement opportunities; if it’s been years since a high-performing employee got a raise or promotion, they may feel undervalued and keep an eye out for better opportunities.
3. Poor leadership
“People don’t quit their job, they quit their boss,” goes the saying. And it’s often true—unsupportive bosses can set unrealistic work expectations, create a toxic work environment, and be the emanating force sending employees out the door. It’s no wonder why training managers has been the top priority for HR leaders in 2024. If you want your employee retention plan to stick, check whether team members are satisfied with leadership.
4. Unhealthy workplace culture
An “always-on” work environment that constantly doles out excessive work and seldom recognizes jobs well done may lead to turnover. Employees may be willing to work 60-plus hour weeks in the short-term, but leave if workloads never ease up.
5. Lackluster communication
Employee satisfaction may wane if companies fail to fill team members in about important company updates. Team members may also want more input on their performance and find it difficult to track down managers and get honest feedback.
How to improve employee retention and motivation: 3 tools
If you’re looking for some trusted help bolstering your retention rate, consider implementing the tools below.
1. Performance management systems
Performance management software allows companies to set up review cycles, tie raises and promotions to high achievement, and identify trends that can inform retention strategies. Look for solutions that let supervisors set objectives that employees can chart progress towards. You also want a system that makes it easy to coordinate check-ins where managers and individual team members can share feedback.
2. Employee engagement surveys
Employee engagement surveys help companies monitor employees’ job satisfaction and find areas for improvement. You can design these questionnaires manually, but some platforms allow you to automatically send surveys at regular, predetermined intervals and trigger workflows based on responses—so companies make sure they’re listening to feedback and taking steps to proactively address it.
3. Learning and development platforms
Learning management systems can help companies upskill employees by offering pre-built courses designed to help them advance through their careers. Look for self-service portals where employees can learn from their devices on their own schedules and come with questionnaires that track engagement.
Improve employee retention with Rippling
Rippling is an all-in-one platform that can help companies manage every aspect of their workforce and retain stellar talent. Instead of employees toggling between a hodgepodge of siloed solutions for onboarding, setting up their benefits, tracking performance, filling out surveys, and undergoing professional development trainings, they can access all these functions—and much more—from a unified system built on top of a single source of truth for employee data.
With Rippling’s Performance Management suite, employees can seamlessly track progress towards company goals during review cycles, and supervisors can tie pay bumps to on-the-job success. You can also use the Benefits Administration features to ensure you’re offering competitive perks from a single dashboard, Compensation Bands to monitor whether you’re offering equitable, market-competitive salaries, and surveys to source quality feedback on engagement, onboarding, and anything else you want input on.
Frequently asked questions
What are the three R’s of employee retention?
The three R’s of employee retention are:
- Respect: Honoring employees’ beliefs and ideas
- Recognition: Celebrating successes and outstanding achievements
- Reward: Offering favorable salaries, benefits, and work arrangements
How can technology help improve employee retention?
Technology can automate manual work that saves employees, HR team members, and managers time during onboarding, benefits enrollment, and performance reviews. The freed up time can improve employees’ work-life balance and help them devote more brainspace to strategic work, which can boost their engagement. HR technology can also come with online training and development tools, survey workflows. You can also leverage workforce analytics from different software systems to track retention rates across your company.
What role does onboarding play in employee retention?
Onboarding is when new hires first meet their colleagues. A smooth process instills trust, makes new employees feel supported, and sets expectations that impact on-the-job success. If employees feel logjammed by tedious administrative tasks during onboarding instead of taking the time to get to know people they’ll work with, they may churn—one survey found that 20% of salaried employees quit before their 100th day on the job.
This blog is based on information available to Rippling as of September 26, 2024.
Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
