Employee retention is more critical than ever for businesses across all industries. Unlike previous generations who often spent their entire careers with one employer, modern employees are more likely to explore new opportunities if they feel disengaged or undervalued.
With 6 out of 10 workers now engaging in ‘quiet quitting’ (where they remain in their roles but contribute only the bare minimum) organisations must take proactive steps to strengthen loyalty and commitment. To help you retain top talent and build a thriving workplace, we’ve outlined 10 effective employee retention strategies.
What is employee retention?
Before exploring strategies, it’s important to understand the meaning of employee retention. Essentially, it’s about keeping your best people at your company for as long as you can. It’s a form of talent management that provides all the necessary tools for employees to thrive and grow, aiming to reduce staff turnover as much as possible. Aligned with the phrase ‘a business is only as good as its people’, the better your staff, the better your chances of running a successful business.
Why is employee retention important?
Some business leaders may claim to be comfortable with increased staff turnover, but there are many undeniable benefits a high employee retention rate can provide. For example, a consistent workforce brings stability and security, helping employees build long lasting relationships with their colleagues and clients. It reduces the admin of handovers, getting new staff up to speed and can save you a significant amount of money too; onboarding new hires now costs an average of $4,700 (£3,600) per employee. Many studies have found the happier the employee, the better they perform, so it’s crucial to keep them engaged and driven.
emPerform’s Top 10 Employee Retention Strategies
1) Provide a good work-life balance
Post-Covid, there has been a real focus on finding the perfect work-life balance, and it may have the strongest influence on employee retention. For companies, this means offering flexible working hours, remote working opportunities and generous leave policies, so that staff feel looked after and respected. These initiatives can be highly effective, with 89% of HR professionals reporting an increase in employee retention after implementing a flexible work policy. You’ll find for most of these strategies, the key to improving the retention of employees is employee satisfaction.
2) Develop a strong workplace culture
Building a positive workplace culture is one of the most important factors in improving employee retention. A negative environment can have a serious impact and is more common than many realise. Research from Oak Engage shows that 75% of employees have experienced a toxic workplace culture at some point in their careers. While concerning, this also presents an opportunity for businesses to stand out. By creating an inclusive and supportive culture that encourages open communication, collaboration, and mutual respect, employees will develop a strong sense of belonging and feel genuinely valued; this makes them far more likely to stay with the organisation.
3) Introduce employee recognition programmes
Implementing employee recognition programmes is a powerful way to boost morale and improve retention. To make recognition meaningful, gather direct feedback from employees through anonymous surveys, 1-1 meetings, and upward feedback. Understanding their preferences allows you to tailor recognition efforts to align with your company culture and values.
Recognition can be as simple as a verbal acknowledgment at the end of the week or a structured programme incorporating 360-degree feedback. A culture of appreciation strengthens engagement, improves job satisfaction, and reduces turnover with research showing that well-recognised employees are 45% less likely to leave within two years.
4) Prioritise Professional Development
Ambitious employees can be a blessing and a curse; they’re driven, focused and always looking to better themselves, but they are also much more likely to leave for a better opportunity if they feel they’ve reached a ceiling. As an employer, it is your responsibility to provide clear paths for career development through training programmes, mentoring, increased responsibility, and structured progression. Incorporating SMART goals can help employees track their growth and stay motivated. A 2023 McKinsey study found that companies investing heavily in employee training can reduce staff turnover by up to 34%, highlighting the importance of continuous development.
5) Offer competitive pay and benefits
When devising your business’s compensation and benefits packages, you’ll need more than just superficial perks like a new ping pong table. A competitive salary not only attracts top talent but also motivates employees to perform at their best. Regular salary reviews provide an additional incentive, giving employees something to work towards while demonstrating recognition of their hard work.
Benefits such as pensions, health insurance, and bonuses can be just as influential and should meet employee expectations. With free salary benchmarking tools widely available, employees can easily recognise when they are not being compensated fairly, which can weaken retention. Utilising compensation management software makes it easier than ever to implement a fair and consistent pay-for-performance culture that ties rewards to results and keeps employees engaged.
6) Prioritise their wellbeing
The impact of poor mental health and wellbeing should not be underestimated. Beyond affecting employees personally, businesses also feel the consequences; around 12 billion working days are lost each year due to depression and anxiety, with burnout being a key driver of low employee retention.
Employers must take a holistic approach, addressing both personal and professional wellbeing to make sure staff feel happy and supported at work. This encompasses mental health support, psychological safety, employee physical health, social connections, and financial security. By addressing these areas, organisations improve the overall employee experience, boost morale, and create a positive workplace culture where people feel valued and supported.
7) Ensure effective management
Less than 20% of employees receive regular feedback from their manager, which can significantly impact engagement and retention. Without clear guidance and recognition, employees may feel undervalued and start looking for opportunities elsewhere. Consistent, meaningful feedback keeps employees motivated and connected to their roles, reinforcing their sense of purpose within the organisation. However, busy managers may struggle to provide this support regularly.
Using a bespoke performance management tool like emPerform streamlines the process by facilitating goal setting, progress tracking, ongoing feedback, and multi-rater assessments. This ensures employees receive consistent and fair support while allowing employers to manage their time more effectively. When employees feel valued and recognised, they are far more likely to remain with the company and continue to thrive.
8) Use data to understand your staff
According to Gallup, 42% of employee turnover is preventable but often overlooked. By identifying trends within your workforce, you can develop targeted strategies to address specific issues and improve employee retention.
Utilising data from surveys, 360-degree feedback, and performance reviews helps you track employee progress, ensuring that goals, skills, feedback, and development are aligned with both personal and company-wide objectives (OKRs). This data-driven approach enables you to proactively address concerns and support long-term retention.
9) Better your onboarding processes
Poorly designed or complicated onboarding processes can undermine all the efforts made to bring new hires on board. According to Brandon Hall Group, organisations with a structured onboarding process improve new hire retention by 82%.
The most successful programmes set clear expectations, offer mentorship opportunities, and provide comprehensive training to make certain new employees feel supported from day one. A well-structured onboarding experience is essential for building long-term employee loyalty and engagement.
10) Encourage team bonding
Last but not least, employees who get along with each other work more effectively together. It may seem trivial, but making friends at work is a significant driver of employee retention. Gallup found that employees who have a best friend at work are 7 times more engaged and 36% more likely to stay in their role. You can encourage team bonding by organising team-building activities, social events, and informal gatherings that strengthen relationships and create a positive workplace culture.
Retaining your best employees is more challenging than ever, but with the right strategies, you can improve employee satisfaction and reduce turnover. By focusing on key areas such as work-life balance, culture, recognition, and professional development, you can create an environment where employees feel valued, engaged, and motivated to stay with your organisation.
Incorporating tools like emPerform into your HR toolkit can help you set clear goals, track performance, and manage development plans, ensuring your workforce is aligned and working towards common objectives. For more tips on optimising your talent management practices, be sure to explore our resource library.
Book a FREE demo today or contact us for any advice on performance management.
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