Last year, I noticed a line of water in my basement at a time when my area was on the verge of a drought. The lack of rain gave me pause as it meant this small trickle likely meant bigger, more expensive problems. A few hours of investigation and thousands of dollars later, we had a brand-new water main connection from the curb to the house. It could have been a lot worse had I not caught it as early as I did.
What does my water misfortune have to do with employee retention? Rarely is such a seemingly small problem as simple as it looks. Often there are larger, more problematic (and more costly) concerns lurking under the surface. If you don’t listen and take action regarding employee concerns, you run the risk of losing them altogether. But if you prioritize employee retention strategies and proactively address relevant issues, you can stop the initial leak and prevent top talent from looking elsewhere.
How to improve employee retention
Retention strategies at their heart are about holding on to your people. In the most basic terms, time is money, and replacing an employee typically can add up to anywhere from 50 to 200% of their yearly salary. But a solid retention strategy is also about creating an environment where employees feel valued and want to show up 100 percent each day. Employee disengagement can cost $8.8 trillion in lost productivity annually according to Gallup. These high-stake costs are proof that employee retention strategies are worthwhile investments that provide tangible, measurable value to the organization and its employees.
11 employee retention strategies to improve retention and reduce turnover
There are so many factors that go into these initiatives, and while achieving them all may not be possible for every organization, they provide a good starting point for any retention strategy.
1. Flexible schedules and microshifting
We’ve all seen the videos of employees required to work in the office who are either the only person there or lamenting that their entire in-office day was spent on virtual calls that could have been done sans commute. When it comes to employee retention strategies, this is a heavy hitter. In a Robert Half survey, nearly 50% of professionals cited not job searching because they didn’t want to lose their current level of flexibility.
Regardless of the in-office, hybrid, or remote schedule that’s in place, give employees grace and allow them the flexibility to be able to perform their job while also managing their responsibilities outside of work.
This demand for flexibility has gone a step further and been coined as microshifting, the “structured flexibility” that allows employees to work in a way that is best for them and the organization. Previously, I would make it a point to let colleagues know I don’t expect them to get back to me outside of their core business hours. But now I’ve come to realize that those off-hour responses may be the very reason they were able to get to a doctor’s appointment or pick up their kids from school. And this level of work-life balance may be the difference between retaining an employee and posting a job description for their replacement.
2. Fair salary
As the stigma of job hopping has progressively diminished, the advantages of doing so have become more widely discussed. Near the top of the reasons for doing so is for employees to increase their salaries. This is advantageous as those who change jobs can boost their salary by 35%, while those who remain in their role only tend to see an increase of 18%.
Even if you’re confident that your organization provides competitive pay, make it a point to conduct market research for your roles and industry as a whole. If you find that certain employees are behind recommended benchmarks, proactively make an effort to bring them closer to average.
Imagine the trust you will instill with your current workforce by reaching out to an employee unsolicited and saying that you undertook this exercise and noted that their salary was X% below industry standards. While providing a fair, livable wage sounds like employee retention strategy 101, it is not prioritized enough, which results in organizations losing top talent to higher-paying jobs.
3. Mentor programs
A great but often overlooked part of any good employee retention strategy is an effective mentoring program. Almost every single Fortune 500 company has some sort of mentorship initiative in place, which can increase employees’ commitment to the organization by 20%.
The nature of these programs is that they often turn into more than just seasoned employees sharing their knowledge with a new hire. These relationships can blossom into advocacy on one another’s behalf and friendships. Reverse mentoring is another benefit that can be explored, where younger or newer employees advise a more seasoned one.
In both traditional and reverse mentor programs, they tend to thrive when the initial framework and goals are set, but then the mentor and mentee are free to determine the cadence and structure that works best for them. This is a minimal, but worthwhile investment on the part of the organization that encourages employee relationships and the knowledge transfer that comes with them.
4. Transparent AI practices
Ever felt like AI was coming for your job? It’s becoming more difficult by the day to find a profession that is truly AI-proof. Even still, many employers have committed to the human aspect of their workforce and how the two can work together.
To help improve their retention strategy, organizations should prioritize enacting and communicating an AI policy that addresses questions such as:
- How is AI used across the organization?
- How should employees be leveraging AI?
- What AI-powered program(s) should employees be using?
- Is there an expectation for employees to use AI for certain processes?
- Is there a limit or ban on using AI for other processes?
- In what ways does the organization plan to implement AI in the future?
Effective retention strategies recognize the value humans bring to their roles, combined with the efficiencies of AI, and communicate accordingly. At the end of the day, employees don’t want to feel like they’re one step away from being replaced by an algorithm. At the same time, they want to ensure they are following established guidelines, which can seem like a moving target as organizations struggle to create, deploy, and enforce AI policies.
5. Employee recognition programs
When asked how to improve employee retention, even the most novice HR specialist would say you need to show appreciation to employees. It’s simple in theory.
New employee just joining? Announce it. Colleague celebrating a milestone anniversary? Recognize it. Teams outperforming their goals for the quarter? Reward it.
Gratitude in the workplace is easily overlooked or lost in the shuffle of daily priorities. And it does not have to be a ‘major’ accomplishment to be acknowledged. It can be as simple as thanking an employee directly or publicly, or as impactful as offering tangible rewards for loyalty or a job well done. These efforts can have a lasting impact on employee retention and create a culture where employees feel valued, supported, and motivated to stay.
6. Healthy culture
No organizational culture is perfect. Despite that, it is obvious to employees if their employer is actively investing in a positive workplace culture or checking a few proverbial boxes and hoping the rest takes care of itself.
So much of this starts at the top. Leaders are responsible for creating an atmosphere where opinions are heard, perspectives are valued, and discussions are welcome. A place where psychological safety is king. This includes transparency in leadership, which creates trust between them and their team, a critical piece of any employee retention strategy.
Encourage employee resource groups. Proactively solicit feedback from your workforce. Provide employee benefits that are affordable and impactful. Whatever you do, don’t just sit back and hope that a positive culture magically sweeps across your organization. Take action to put it there intentionally.
7. Proper onboarding
Onboarding starts long before an employee walks through the door for their first day. The entire application, screening, and hiring process forms an initial impression of the company. If it seems unclear, cumbersome, and lacking communication, it immediately becomes an uphill battle to overcome this poor experience compared to if it had been straightforward, efficient, and organized.
Once on the job, those initial days and weeks need to be structured and welcoming. Everything from scheduled introductions and overviews of processes to where to properly store documents, the company’s policy on AI use, and how to submit vacation requests. These efforts can also be paired with a mentor program, giving the new hire a stable, willing resource to ask even the most basic questions.
An effective onboarding experience is an early, but critical component of employee retention strategies. It’s a chance to show that the person’s time is valued and that the organization has a structured process.
8. Constant communication
No one wants to be the last one to find out about a major company announcement.
Particularly given the prevalence of remote and hybrid work arrangements, communication cannot be overlooked. Whether it’s leadership changes, new process implementations, or company downsizing, it’s a good rule of thumb to overcommunicate. Have the meeting, schedule the follow-up call, send out the email, create the video tutorial, provide the background rationale – whatever it is that leaves employees feeling like they were considered in the decision process and that they are walking away with a good understanding.
Don’t just claim to value communication; truly live this for both the routine updates, like changing how employees submit time-off requests, and the difficult ones, like budget cuts. The benefits of effective workplace communication, such as trust, better employee engagement, and commitment, can make or break your employee retention strategy.
9. Employee development
Retention strategies are about employees ultimately showing loyalty to the company. Employee development is a way for the organization to turn around and make an investment in its employee and show loyalty to them. So much so that 94% of employees said they would stay at a company longer if there were career development opportunities.
Universal training is great and absolutely serves a purpose, but be sure to allow for some level of development customization. No two employees are the same, even if they perform the same job. How they prefer to learn and what skills they want to develop could be completely different. Not to mention their ultimate career goals could be moving in opposite directions.
With development opportunities taking on so many forms – online courses, workshops, conferences, even college credits – have a structure and budget in place. At the same time, allow for suggestions and one-off requests from your workforce. Just like a financial investment, employee development is a retention strategy that will pay dividends in the future.
10. Wellness days
Growing up, the term ‘mental health day’ was thrown around casually and often more as a joke. “I could really use a mental health day” meant that the person just needed a break.
Years ago, the equivalent of a mental health day being a company-sponsored initiative would have been a far-fetched idea. Maybe even laughed at. Perhaps something reserved only for those hip tech companies that boasted ping pong tables and nap pods. Today, they actually exist. And in a more mainstream capacity.
Some people may use this ‘free’ time to volunteer with an organization that is important to them. Others may use it to attend events at their child’s school that they have had to miss in the past because they always fall during the workday. Still more may treat it as a true mental health day and pamper their bodies or their minds.
The point here is that there is no right or wrong way to use it, and there is no judgment from the company. This day(s) is meant to prioritize employee well-being in whatever form that is best for the individual.
11. Positive brand reputation
As Warren Buffett said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Every move you make as a business – the employees you hire, the vendors you work with, the cost of your services, your response to current events – has an impact on how your company is perceived in the market.
When it comes to retention strategies, creating and maintaining a positive image matters. A big part of that image is how you care for your employees. Their assessment of what it’s like to work for you will impact their own tenure and likely your ability to recruit new employees as well.
Negative reviews spread quickly, particularly in the age of social media. Ensure that you are doing everything in your power to create a business that employees are proud to work for and stay with for the long term.
Turning insight into stronger retention strategies
Successful employee retention strategies need to be well-designed and comprehensive. If you don’t know what resonates with employees, ask them. Then make a plan, but remain open to changes based on evolving economical, personal, and organizational factors. And if you notice a shift or hear rumblings of unrest – like that dreaded water leak in the midst of a drought – take action before a minor inconvenience becomes an insurmountable and costly challenge.
The secret to a healthy, thriving workforce
9 tips to make this a reality in your organization
A thriving workforce doesn’t happen by chance – it’s built by leaders who prioritize transparency, empathy, and development at every level. Our research shows that effective leadership can directly impact workplace metrics like employee engagement, job satisfaction, and the financial performance of the organization. When leadership fosters a culture of well-being, employees feel valued, motivated, and engaged.
Our latest guide explores how organizations can create healthier, thriving teams by discussing:
- What employees need from leaders in order to succeed
- The importance of organizational transparency
- Tips for building a stronger workforce
Let us help you get started, get back on track, or continue in your journey toward achieving a healthy, thriving workforce.