10 Effective Strategies on How to Retain Employees

Introduction

Picture your three best people. Now, think about what it would take to replace them if they left your organisation tomorrow. Globally, 93% of organisations worry about employee retention.

Losing top talent is expensive.

"Always treat your employees exactly as you want them to treat your best clients.”

How to retain employees? It’s a challenge that seems to have no simple answer but is one of the most important parts of running a successful business. “Your employees will forget what you said, they will forget what you did, but they will never forget how you made them feel.”

The best way to retain employees is to practice the 80-20 rule. It’s really simple: 80 percent of the time, ask your employees, "Are they doing and feeling well?" On the contrary, use the 20 percent to give them feedback on things you would like to see them do differently.

A well-established, well-executed employee retention strategy such as adopting corporate training program is a key competitive differentiator in today’s time.

It is very important for a company to be able to retain its talent, especially in tight hiring markets. Losing employees can cause big problems.

At the same time, high employee turnover can disrupt operations and affect the company’s overall performance.

Key Takeaways

Replacing top talent is costly and disruptive to business operations.

Employee retention saves recruitment and training costs significantly and improves productivity.

Retained employees build stronger customer relationships, promoting satisfaction and loyalty.

Employee retention supports innovation and growth through stable teams.

Offering career advancement opportunities and remote work options increases flexibility and minimises the likelihood of employees leaving.

Recognising and rewarding employee efforts improve commitment and job satisfaction.

A positive onboarding experience makes sure that the new employees feel supported and valued.

Open communication promotes employee engagement and feedback.

What is Employee Retention and Why is it Important?

Employee retention simply means how well an organisation holds on to its existing employees while minimising turnover rate!

Employee retention is one of the fast-paced challenges for organisations and HR departments today.

Employees leave their existing jobs for many different reasons. Some are voluntary, such as switching to another job, while others are involuntary, such as getting laid off. Employee retention strategies here will focus on the voluntary turnover ratio that harms the organisation, as opposed to the loss of a poor performer.

It is important because,

High retention rates significantly reduce the ratio of recruitment and training costs and will improve team cohesion and productivity. Experienced employees contribute excellent knowledge and skills while enhancing employee loyalty towards an organisation.

To improve staff retention, organisations should implement best practices for employee retention, such as offering competitive compensation, developing a positive work environment, offering career development opportunities, allowing flexible work arrangements, and regularly recognising & appreciating employee achievements.

Ultimately, emphasising on all these practices leads to reducing staff turnover ratio and maintaining a stable and motivated team that fantastically drives success.

Nearly 45% of jobseekers surveyed by Joblist said “better pay or benefits” is the most common reason for planning to quit in 2023.

Why do Employees Leave?

Joey Coleman is one of the brightest authors and speakers of all time. In his book "Never Lose an Employee Again." he beautifully wrote;

"How we onboard employees and make them feel part of our community can differentiate whether they will be long-time employees or leave almost as fast as they came."

There are many reasons behind why employees leave.

But some of the main issues involve a lack of engagement, poor management, limited career opportunities, and a lack of new learning.

To overcome these challenges, organisations have to focus on how to keep employees happy by promoting a positive work environment, so how can this be achieved? By incorporating effective HR strategies that can give importance to communication, appreciation, recognition and career advancements.

Ultimately, understanding such strategies can throw light on why do employees stay.

The truth is that employees who feel valued and engaged are less likely to look for opportunities elsewhere, leading to higher retention rates and a more committed workforce.

Addressing these key components is essential to increase employee engagement and minimise turnover.

Remember, no business is without customers, and the same applies to employees. Coleman said you can’t deliver a great customer experience without a great employee experience inside your organisation.

Benefits of Employee Retention

Let us understand some of the benefits organisations with high retention can experience;

A survey conducted by Michael Page highlights that more than two in five people who started their current job as recently as 2022 are now actively seeking a new role.

1) Considerable savings on cost

The biggest advantage any organisation can enjoy from high retention is that it will save huge on recruitment and training costs!

Addressing high turnover and low-paying jobs, be prepared to pay around 16% of the employee's salary to replace them.

Talking about the middle range, expect to pay around 20% of the of the employee’s salary to replace them.

By retaining employees, particularly high-impact employees that are much needed by the organisation, you can avoid these costs and instead allocate resources that can boost employee's productivity with our skill development program!

Experienced employees will always ask for less or no supervision and less training but are more efficient, meaning better productivity and reduced operating costs.

2) Improved productivity

Incorporating employee retention strategies will promote engagement and allow employees to feel more valued and supported. When you achieve that, they’re more likely to feel motivated and do better and more creative work.

Additionally, long-term employees tend to be more productive because they’re more familiar with the work and the company processes.

In fact it can take a new employee 1 to 2 years to reach the productivity level of an existing employee.

3) Better well being of employee

Your current employees easily feel a high turnover rate, which also it creates a sense of instability and negatively impacts morale.

Working towards high employee retention by executing strategies to retain employees will automatically create a positive workplace environment and minimise low turnover rates, and that’s where good things happen.

4) Increased customer satisfaction

If your employees are in direct contact with your customers and clients, they’ll naturally develop relationships with them over time.

This relationship, after a time, leads to improved customer satisfaction, customer loyalty, and the ability to provide better service as a business.

But say for example, you lose any such employees who hold these relationships. In that case, it may be difficult to develop the same relationship with any new staff members, or it may take a long time to form a similar relationship.

5) Knowledge of retention

The fact is,

New hires can utilise double the resources, time, money, and effort to reach the level of expertise of long-standing employees.

That is why it is essential to retain employees with our corporate training so that you can sufficiently promote a high employee & knowledge retention ratio.

6) Innovation & growth

Innovation and growth come in when stable teams are put together.

According to the Harvard Business Review, organisations with highly engaged employees see 2.5 times more revenue growth than companies with low engagement levels.

Develop emotional intelligence within your team and see how it improves employee retention and can substantially benefit organisations, leading to a more efficient and successful business.

10 Strategies for Retaining Employees

We’ve listed 10 strategies that will help you retain more of your team -in 2024 and beyond!

1) Pay Competitive Salaries

To take hold of your best employees, you have to offer them competitive monetary benefits, one of the best tips for retaining top talent.

We all know that pay remains a top factor in employees leaving the job, and at the same time, other employers are more than happy to scoop up your top talent.

2) Develop Opportunities for Career Advancements

When employees see opportunities to grow internally, there are no or fewer chances that they will look for the same outside of the workplace.

LinkedIn’s 2024 Workplace Learning Report revealed that 87% of employees showed business value by gaining skills to move into different roles. By focusing on our skill development program, employers can easily help employees gain skills for their current jobs and the work they want to do in the future - the best retention strategy!

3) Create a People-First Work Culture

In a people-first organisation, the people who support the business, its growth, and its revenue are always prioritised.

It’s important to note that the umbrella term “people” refers not just to employees but also to customers and the community at large. So, the organisation's strategy requires a shift in perspective.

Instead of asking, "How do we succeed?" a people-first organisation asks, "How can our people benefit more?"

4) Develop Meaningful Relationships at Work

Developing meaningful relationships at work does not mean organising fun activities, happy hours, and birthday parties.

One study mentioned that quality relationships are a cornerstone of successful collaboration. The stronger those connections, the more likely team members are to share their knowledge.

5) Recognise & Reward the Hard Work

When organisations do not acknowledge the essential contributions of employees, such actions can discourage them, leading to quitting.

The methods to prevent employee departure can increase the commitment and dedication of employees with timely recognition and appreciation of their hard work.

6) Provide Remote Work Options

The pandemic proves that long-term remote work is possible.

From a recruitment and retention perspective, providing increased flexibility for work hours and work location can really help increase employee satisfaction and retention.

7) Promote a Healthy Work-life Balance

According to a Deloitte report, half of Gen Zs and Millennials admit being burned out due to work pressures.

Even worse, about half of Gen Zs and Millennials say that their employer doesn’t care about their mental health.

Building a supportive work environment will create a healthy work-life balance, which is important for good mental health.

8) Create an Excellent Onboarding Experience

Right from onboarding new employees, educate them on their responsibilities, and give them the resources needed to complete their work.

Creating a retention-friendly workplace will let them feel accepted. Introduce new hires to their teammates and set them up with a leader so that they have someone on hand to answer questions.

9) Maintain Open and Ongoing Communication

Always communicate authentically, honestly, and transparently with your employees, whether they work on-site or remotely. This is important for letting them know what is happening in the organisation and what the expectations are from them.

In turn, employees should be encouraged to share their feedback, ideas, and concerns with their managers - An answer to how to motivate staff.

10) Learn from Past

Many companies have adopted exit interviews to understand why employees left the organisation.

This helps them uncover the roots of turnover concerns and, more importantly, prevent high turnover from starting.

How to Calculate Employee Retention Rate

The formula for calculating employee retention rate -

Total number of employees at the start of the time period - The number of employees who left during the time period = The number of original employees who remain at the end of the time period.

Retention rate calculation example;

At the beginning of Q1, an agency had 40 employees. On the last day of Q1, 38 of the original employees still worked there.

Starting number: 40

Remaining number: 38

Calculation: 40 – 38 = 2 employees left during the quarter.

Divide the remaining employees by the total employees at the start: 38 ÷ 40 = 0.95

Move the decimal two spots to the right to get the percentage.

In this example, the retention rate is 95%.

FAQs

Conclusion

Retaining top talent every time is not easy for any organisation.

But by implementing strategies like offering competitive salaries, providing opportunities for growth, promoting work-life balance, etc, you can create an environment where your team feels valued & accepted.

Remember, happy and engaged employees are more productive, creative, and loyal.

For the last 15 years, at-HiQ Business & Training Consultancy has offered employee retention and skill development programs to almost every type of organisation.

Next can be your turn, so it is time to get a hold of your best employees with the help of our experienced consultant, who can help you develop a comprehensive strategy so that you can drive your business forward with the best workforce.