10 Most Effective Employee Retention Strategies

What once was considered just another minor blow in the workplace has become the most critical variable in the corporate world. Employee retention has garnered a lot of space in the arena.

In 2021, more than 47 million Americans left their jobs voluntarily, a number unprecedented in history, according to the U.S. Bureau of Labor Statistics. There are more retirees than ever, but they aren't moving as rapidly; they're reconsidering work-life balance and career roles, switching industries locally or reorganizing. Rather than leaving the workforce altogether, they are reluctant to return to in-person work. (BLS, 2022)

More importantly, finding new talent is one thing, but keeping that talent engaged and invested is another. This leads to asking the most important question: What makes a happy employee?

This article intends to explore 10 deliberate actions that can contribute to boosting employee job satisfaction and holding on to valued employees.

Defining Employee Retention

Employee retention aims to keep productive and talented workers and reduce turnover by creating a positive work environment that promotes engagement, shows appreciation to employees, offers competitive salaries and benefits, and encourages a healthy work-life balance for employees.

During periods of low unemployment and heightened competition for talent, employers are particularly interested in retaining employees. Organizations use human resources technology to recruit, onboard, engage, and recognize their workers, as well as to offer more work flexibility and modern benefits like financial and physical wellness programs to retain their employees.

Companies need to maximize employee retention to prevent employee turnover to succeed as a business. In other words, companies must make concerted efforts to keep their best employees working for them.

Benefits of Employee Retention for Your Company

Sustained flow of productivity

Professionals who work for a long period of time in an organization add significant value to the company. They understand the company's vision deeply and know how to fulfill their role's expectations. Moreover, all the important skills enabling them to complete daily tasks effectively are acquired.

Reduced company costs

It is financially beneficial for an organization to retain skilled and reliable employees. The average cost and time-consuming process of recruiting, onboarding, and scouting new employees are $14,936, with an average replacement time of 94 days. Lower employee turnover costs allow companies to invest in other areas of their business with more funds. (Mackenzie, 2022)

Reduced training time

In addition to being highly trained, long-term employees feel confident carrying out their daily responsibilities. They have developed effective communication channels with their manager and colleagues and the ability to complete their projects on time. Training and time are necessary to adapt new employees to the new environment and its requirements, which can temporarily impair team productivity.

Best Practices for Retaining Employees

Over the past year, leaders have scrambled to combat turnover. Effective retention strategies have become increasingly essential.

To develop and implement multifaceted retention strategies within an organization, all roles must work together to identify and implement practices that contribute to retention. Depending on the circumstances, a combination of broad-based and targeted strategies may be appropriate.

Communication

The shift to hybrid and remote work has underscored the importance of good workplace communication. It is imperative that your direct reports feel they can come to you at any time with ideas, concerns, and questions, whether they are on-site or remote. Leaders must ensure they are doing their part to foster positive communication among the entire team in a timely, constructive manner. Ensure that you keep in touch with each team member regularly. This will give you a sense of how they are doing and how happy they are at work.

The other thing that matters is implementing consistent check-ins. Employees need human connection and want to know their leaders care about their well-being. According to Harvard Business Review, 40% of global employees say no one checks on them to see if they're doing well. It sounds small, but it encourages employees to do their best and improves company culture. (Greenwood & Krol, 2020)

Training and development

In addition to continuous performance feedback, employees can identify areas for professional growth, such as learning relevant skills. In this day and age, upskilling your employees has become increasingly important as technology continues to change how we work. As business needs change, people upskill to become more competent. (Half, 2021)

Allow your workers to attend virtual conferences, reimburse their tuition, or pay for continuing education, and make it a priority to invest in their professional development. Also, succession planning can be an effective tool for building leadership skills and advancing professional development. (Half, 2021)

Mentorship programs

Adding mentorship to your extended onboarding process, especially in a remote work environment, is a great way to welcome new employees to the company. It will also offer guidance and act as a sounding board for them. Moreover, it's a win-win for everyone: New employees gain experience from their mentors, and they, in turn, give their mentors a fresh perspective.

Mentoring opportunities do not have to be limited to new hires. Increasing employee satisfaction and retention can greatly benefit your existing staff by setting up mentor-mentee relationships.

Growth opportunities

A company needs to offer employees opportunities for growth and get the word out about these opportunities. Employees need to understand how they'll grow, even in challenging times.

As an HR knowledge advisor at the Society for Human Resource Management, Angela Simpson says,

"You have to create new opportunities within the workplace to utilize employees' other strengths. You have to make it interesting so they aren't looking elsewhere for development and growth opportunities."

(SHRM, 2022)

Invest in mental health training and resources

Investing in your employees' mental health cannot be overstated. According to the Made of Millions Foundation, employers who invest in workplace mental health will see a 3x to 5x return on their investment and will be more likely to retain their employees. (Unger, n.d.)

Mental health is improved by promoting work-life balance, opening up communication, and offering mental health-related services like meditation classes.

Achieving good mental health increases productivity, innovation, customer service, and interactions with coworkers and clients. There is a greater need for workplace wellness programs and employee motivation than ever before. These simple solutions can significantly enhance the employee experience.

Flexible schedules

Approximately 41% of employees who quit because of a lack of flexibility did so due to a lack of a flexible schedule, according to a recent survey by FlexJobs. In addition to retaining employees, offering flexibility increases employee motivation, productivity, and retention as it helps employees balance work and life. Additionally, your team can work when they're most productive. Some roles and companies require structured hours, of course. Customer service representatives, for example, need to work during normal business hours, but many other jobs are not as restricted. (Pelta, 2022)

Formulate clear-cut policies and expectations

There are often frustrations among employees when there are no clear job descriptions, organizational policies, or performance metrics. Dissatisfaction can lead to employee turnover. However, it is easy to remedy this by establishing clear communication channels and ensuring all employees understand their roles.

Additionally, employees should receive regular feedback every time there is a scheduled evaluation so they know where improvements need to be made. Additionally, policies should be applied fairly, so no one feels victimized.

During the pandemic, employers and employees had a different conversation, as it exacerbated talent shortages already in place. Companies need a clear understanding of what makes talented people want to work, stay, or leave their firms, more than ever. Compensation will always play a significant role, but what employers need to reflect on is that talent is more than a mere number.

Motivation-hygiene theory

Based on the research of psychologist Fredrick Herzberg, two factors determine job satisfaction: Motivators, also called job satisfiers, include recognition, meaningful work, and personal growth. Job dissatisfaction is caused by hygiene factors, which include salary, benefits, and job security. While hygiene factors can prevent employee dissatisfaction, they are neither considered sources of satisfaction nor motivational factors.

Internal mobility

According to LinkedIn Learning's 2021 Workplace Learning Report, workers in companies with high internal mobility (hires and promotes from within) usually stay almost twice as long as workers in companies with low internal mobility. An employee who moves into a new role internally is also three times more likely to be engaged. (Nuys, 2021)

Targeted strategies

Based on data from several key sources, targeted strategies include organizational exit interviews, post-exit interviews, stay interviews, employee focus groups, predictive turnover studies, and other qualitative research. As a result of this information, an organization can determine more specifically where a problem exists and develop highly relevant and linked strategies for addressing it.

The Bottom Line

Despite having the best retention program in the world, if it isn't resonating with employees, it is a complete waste of time. Organizations can build and maintain a good reputation because of exceptional employees. To prevent the loss of valuable employees, an organization must provide such employees with a reason to remain. Employee retention is one way to ensure this occurs.