A hand carefully holds four happy people demonstrating the care needed to retain employees.

Retention strategies for keeping your best talent

Employee retention has become an increasing concern for companies globally over the last decade. Companies are beginning to see how important it is to retain staff, and understanding the high costs if they don't.

NWOW Staff
May 12, 2022
Date Published
8 minutes
Time to read
Employee strengths and weaknesses
Category

Employee retention has become a cause for concern driving organizations to get creative with solutions.  

More HR professionals and business owners are beginning to gain perspective on how an increasing employee turnover could pose a threat to business growth.  

As such, this article would be exhaustive enough to discuss employee retention in detail and most importantly, strategies to explore.

Table of contents

What is employee retention?

To get off on the right note, it is important to clearly define what Employee Retention entails in clear terms. Employee Retention embodies a company's ability to retain its staff.

It has become key for companies to reduce the number of employees leaving their job, because of how it affects organizational structure and output.

The term, “employee turnover” is a metric used to figure out the number of people leaving their jobs in a specific period. This metric gives employers insight on whether it is a cry for help or there's a need to employ strategies to turn things around.

Why does employee retention matter?

Having gone over employee retention meaning, it is pertinent to discuss why it is worth looking into.

For a better understanding of why this topic is crucial, let's look into some of the downsides of high employee turnover:

Increased overhead costs

Every company knows too well that to be able to stay afloat, there needs to be a working strategy to minimize overhead costs. However, with high employee turnover, it is impossible to reduce overhead costs, given the high cost associated with employing new staff. Talent acquisition can be very expensive when you factor in recruitment costs, training costs, and benefits.  

According to the statistics culled from Zippa, the average cost per hire in the U.S is $4,425. Not to mention that it costs up to 40% of an employee's base salary to hire new employees with benefits. Looking at such statistics explains why companies are up on their toes in recent times in taking staff retention seriously.

Deflated morale

Morale is one element that greatly influences the productivity of employees. When there is a high record of staff leaving a company, other staff remaining are bound to lose drive in their work. Eventually, the less enthusiastic they get about their work, the more likely they are to leave themselves. So, it is like a ripple effect that needs to be looked into before it causes a string of problems that will be harder to fix.

Productivity

This downside is a no-brainer. When a company is short-staffed, productivity drops. Within the period it takes to recruit the right talents, the existing employees would have to deal with an overbearing workload. Eventually, they end up getting more fatigued which will, in turn, affect the quality of work they churn out.

What causes high employee turnover?

Employees don't just leave without cause, there are always underlying reasons triggering it. To fight a problem, it is very important to understand its root cause. Here are common causes that influence high employee turnover:

Toxic work environment

Toxic work environment has become a common driver of high employee turnover. Workers are less likely to stay in a work environment they perceive as "toxic". What characterizes a toxic work environment? Employees being treated with disrespect; limited, or no benefits promoting employee wellbeing; and poor employee management, to name just a few.  

Overbearing workloads

According to the recent Work and Wellbeing survey carried out by the APA (American Psychological Association), 79% of the 1501 employees interviewed experienced work-related stress in the month before the survey. Overbearing workloads have been pontificated as one of the leading cause of high stress levels among employees. As a way out, these employees opt for leaving, when it starts becoming a thing of concern.

Lack of development opportunities

Most top talent who know their worth won't deal with a company that's not progressive. These types of staff are always looking to upskill and feel a higher sense of value. In a case where they find themselves in a company that has no provision for these development opportunities, they are more likely to look elsewhere.  

Money

This is a no-brainer. Money is one of the root causes of high employee turnover in most cases. It is a natural human instinct for people to go where they are valued. One metric employee use to rate how valued they are by a company is the monetary benefits they enjoy. Most times they compare books with the pay structure of other companies to know if they are underpaid. When they start feeling like they are underpaid and it is obvious the company has no plan to increase the salary, job motivation is affected. In that case, they are likely to move elsewhere.  

Job inflexibility

Job flexibility has become a thing of concern for employees in recent times. No employee wants to feel like they have no life because of how demanding a job can be. This has pushed most companies to adopt remote work.  Remote work has become popular in recent times because of the flexibility it offers employees. Statistics culled from findstack show that most employees are more likely to stay in a job that allows remote working even if they are slightly underpaid.  

Poor management

In the last decade, more awareness has been pushed towards effective leadership. The essence of ensuring a manager has a firm grasp of talent management cannot be overemphasized. Interestingly, employees are bound to perform better when they are properly managed. In a case where they feel slighted by the management, they start nursing the idea of leaving.

How to measure employee retention

One important metric that's useful for measuring employee retention is the time period. Most companies measure employee retention on an annual basis. However, this has proven to be inefficient, given the tiny inconsistencies that may have been missed which add up.

So, top business executives advise a monthly measure of employee retention to have a firm grasp of the inflow and outflow of talents from a company.

The standard formula for measuring employing retention is (Remaining Headcount During Set Period ÷ Starting Headcount During Set Period) × 100.

So, let's say you want to calculate your employee retention for February. If you started February with 40 staff and ended with 35, meaning 5 people left for that month. Using that figure to calculate your employee retention for that month, you would have (35/40) ×100 = 87.5%.

9 most effective employee retention strategies

As we have already stressed so far, your company is more at an advantage if you take talent management to heart than raking high employee turnover.

We have addressed how problematic high employee turnover can be and the root causes. Let's look into strategies you can implement to ensure your employees stay.

1. Promote an appreciation-based culture

Hard as it might be to believe, according to the statistics revealed by O.C Tanner Learning Group, 79% of employees left their jobs because they were not appreciated. There is this deep-seated human need to be wanted and appreciated. When people keep giving their best to a company, and it is not acknowledged, it is easy for them to feel slighted. This builds up to a point where they start resenting the company and eventually, they move to where they feel they might be appreciated.  

One way you could go about this is to award top-performing staff monthly. This will make employees feel valued and also push them to do even better, to be recognized.  

Summarily, you want to ensure you acknowledge the efforts of your staff to make them feel seen.

2. Invest in employee careers

As we highlighted in one of the root causes of high employee turnover, lack of development opportunities can push staff to look elsewhere. To put it in better perspective, according to LinkedIn's 2018 Workplace Learning Report, it was revealed that 94% of employees would remain at a company if it offered them career development opportunities. So, away from the regular work you employed them for, invest in setting up training to get them up to speed on trending skills. The more skillful they get, the better for you because the quality of the output you get from them would be improved.

3. Ensure employees are well compensated

As we have stressed already in the causes of high employee turnover, money is a major driver. Employees are more likely to stick with a company that pays them well. Asides from paying them well, you want to imbibe a culture that also promotes momentarily salary increment.  

4. Ensure you hire right

So far, we have looked at how employee turnover may have increased from the employee perspective and not the employer's perspective. Just as there are toxic bosses, so exist toxic employees. So, a high employee turnover might not be so much of a bad thing if it's the toxic employees that are leaving.

You want to ensure you hire the best minds. People who are vision-oriented and passionate enough to see your company grow. Once you hire such people who align with your company's goals, they are more likely to stick with your company.  

5. Offer competitive benefits

Away from paying competitive salaries, the importance of including other beneficial packages cannot be over-emphasized. Some of the benefits that top organizations implement are health insurance, momentary paid leave, to mention but a few. Some of these benefits point to how interested the company is in employee wellbeing. When employees feel the company sees their welfare as a top priority, they are likely to stick with that company.

6. Promote cordiality between employees and supervisors

The fact that it is a work environment doesn't imply it must seem as though it is a military regime. You want a work environment where employees can be cordial with their bosses whilst understanding boundaries. This makes the employees feel at home, hence strengthening their resolve to stick with your company.

7. Promote team bonding

There are a plethora of ways to promote team bonding in a workplace. However, one commonly adopted is the inclusion of social activities where employees (both bosses and subordinates) are a part. You could for example host quarterly events where the employees go to the beach to play fun games or explore some other outdoor locations. This opportunity will offer employees a platform to connect and bond in a different light. When you have such in place, employees tend to be in a more positive spirit, which improves their output. Most importantly, it reduces the chances of them leaving. This is one effective employee retention program.

8. Be open to remote working options

Most organizations are stiff-necked to remote working options. However, if there is one thing that the pandemic has taught us, it is that businesses can still thrive when operated remotely. Of course, not all arms of the business will be open to remote working options. Regardless, for the arms that can thrive without having to come to the office every day, you want to leave the options open. Target team members’ services to know those that can be allowed to work remotely.

Have your employees decide whether they want to work remotely or not. One way companies implement this is hybrid work, where you divide the days, an employee works from home or the office in a week.  

This offers flexibility and a better work-life balance. Without any doubt, when an employee's job feels flexible, they are more likely to stay on board. This is one retention strategy that has proven to work for a wide range of companies.

9. Promote good workplace communication

People don't thrive in environments where they feel stifled. These employees end up holding it in for too long, it starts affecting their productivity. You want to have a culture that promotes effective workplace communication. Somewhere where employees come up with ideas, ask questions, and get clarity when needed. A workplace culture that promotes constant checks of the employees, is one of the employee retention strategies that prioritize employee wellbeing in some light. When employees feel like they want to be heard, they feel valued and are likely to stick through thick and thin.

Summary

Over the last decade, employee retention has become a cause of concern for companies globally. Organizations are beginning to see how important it is to retain staff, knowing the downsides to poor retention. They are now seeing how the growth of a company is not mostly influenced by external forces but internal too. This has reinforced companies to devise a new way of work (NWOW) that implements employee retention strategies. It is a good time to be alive to see how well companies prioritize employee welfare to make them feel valued.

KEY TAKEAWAYS

Employee retention has become an increasing concern for companies globally over the last decade. Companies are beginning to see how important it is to retain staff, and understanding the high costs if they don't.

What’s a Rich Text element?What’s a Rich Text element?What’s a Rich Text element?What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

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