A mountain topped with a flag, representing the employee retention blog post.
6 Ways Companies Can Improve Employee Retention
A mountain topped with a flag, representing the employee retention blog post.

6 Ways Companies Can Improve Employee Retention

People are the backbone of any organization. But finding great people isn’t enough — you also need to focus on keeping them! That’s the idea behind employee retention. Employee retention refers to how many people stay with an organization, as well as the techniques it uses to keep them. 

In this article, we’ll give you a brief introduction to employee retention, along with a few techniques and strategies to improve it. Keep reading for everything you need to know about employee retention — a definition, why it matters, and strategies.

What is employee retention? 

Employee retention is a simple concept — it’s how well an organization can hang on to its people. It also involves figuring out how many employees end up leaving the company for other opportunities and how long it usually takes them to do so.

Retention is closely related to employee turnover, which is the rate at which employees leave a company — whether they’re laid off, terminated, or they resign. 

Retention is a major concern for most employers because turnover is expensive. Losing an employee, then hiring and training their replacement, can cost as much as 33% of that employee’s annual salary. 

Why do companies lose people?

For your employer, retention might feel especially urgent right now. That’s because of something called ‘The Great Resignation’ —  an unprecedented wave of attrition that’s affecting all industries.

That said, employee retention isn’t a new concern. Why do people leave their employers? Here are three common reasons. 

A lack of potential growth

Today, employees have more options than ever before. Thanks to the internet and the rise of remote work, it’s easier to find a job and many can be done entirely online. That means the job pool for a particular candidate is much larger. 

Additionally, the market — and the skills it demands — are changing more quickly than ever before. Employees know they need to keep moving forward and growing professionally in order to keep up. If they don’t see a clear way to do that with their current employer, they’ll leave and do so elsewhere. 

Burnout and overwork

High expectations can be par for the course for many roles. But when expectations surpass what employees are reasonably capable of, you create frustration and burnout. That leads to resignation letters. Employees cannot feel fulfilled, satisfied, and engaged at work if they’re being pushed to a level of productivity that’s unsustainable, unhealthy, or unrealistic. 

The economic hardships of the pandemic may have exacerbated this problem further, as many companies couldn’t provide financial incentives in line with their employees’ expectations. 

Toxic workplaces and managers

There’s a common saying that people don’t quit jobs, they quit managers. That’s more than a platitude — in one 2018 study, 50% of respondents shared that they’d left a job because of a boss or manager. 

No matter how much you love your work, it’s nearly impossible to be happy in a negative work environment. Poor management techniques, unfair policies, and a lack of transparency can all make people feel disrespected and undervalued, leading them to seek out better workplaces and new opportunities. 

6 strategies to boost employee retention 

It’s one thing to know why people are leaving their jobs, but how can we convince them to stay? Here are six strategies to boost retention by creating a happy, respectful workplace full of growth and opportunity. 

Invest in onboarding 

Companies spend a lot of time, money, and energy finding great people to hire. If you don’t want to keep doing that, set your people up for success with great onboarding and orientation processes!

People need support when they start a new job. They can’t figure out how you do things, get comfortable on a new team, and start doing their best work all on their own. If they don’t get that support, they’ll leave. So don’t forget about your new hires once they’ve accepted your offer! 

Compensation and perks

This is the most common-sense retention strategy. Obviously, people won’t stay in a role if they’re not well-paid, but compensation is about more than a good salary. 

Perks and programs — such as childcare and wellness programs — can be a powerful way to attract and retain talented people. What can you offer people to meaningfully improve their life? 

Keep in mind that the job market is more competitive than ever, and your employees have lots of options. In this climate, a good salary is the bare minimum for better employee retention. Perks should supplement a great wage, not make up for one that’s below average. 

Learning and development

The strongest candidates have goals and dreams. If you help your employees reach theirs, you’re giving them a very good reason to stay. 

Make learning, coaching, and professional development an integral part of day-to-day workflows. Build processes for checking in on everyone’s goals and offering support along the way. That could involve mentoring, job shadowing, or a dedicated budget for ongoing study. 

Crucially, you’ll need to reallocate time and resources for learning from other tasks. If you don’t create space in peoples’ workloads for these initiatives, all you’re doing is contributing to burnout. 

Flexible, reasonable policies

No one wants to deal with strict, unreasonable rules. That’s why employee retention benefits from flexible, empathetic policies that put their needs first. 

Your workplace policies must make clear sense to everybody and emphasize getting work done, not micromanaging where, when, and how that happens. 

If possible, include your people in these policies’ creation to give your workplace an egalitarian, cooperative feeling. Once the policies are in place, welcome feedback on how they’re working, and be open to adjusting as needed.

Create transparency

For people to do their best work, they need to be able to trust each other. That includes people at every level of your company, from interns to senior leadership. 

Feedback is an important part of creating transparency, but it needs to go both ways. Create plenty of opportunities to give employees ongoing, productive feedback, but also to listen to their thoughts on big decisions and other things happening at your company. 

Transparency means that your organization should run as openly and collaboratively as possible. To improve employee retention, avoid secrecy and closed-door conversations, especially about topics that affect everyone!

Help people connect

Warm, caring workplaces where people feel connected to each other are much more enjoyable to work in (even if that connection happens through a screen)! 

Building connection also creates trust and psychological safety, two crucial precursors for innovation and productivity. Employees should never be penalized for finding time to relax, chat, and bond — in fact, you should facilitate that kind of connection wherever possible. Even remote workforces can build connections through strategies like free-discussion Slack channels and virtual happy hours. 

All about people

All these employee retention ideas come down to one thing — creating a healthy, productive workplace designed around peoples’ needs. 

If they put people first, employers might find that retention comes naturally. After all, we put so much time, care, and effort into our jobs. Wouldn’t you rather give that energy to an organization that makes you feel cared for, heard, and valued?