Employee retention is one of the most vital metrics in your organization.
According to a survey conducted by the U.S. Bureau of Labour Statistics, 3 to 4.5 million employees in the US quit their jobs each month.[1]
Furthermore, the Great Reshuffle that followed the pandemic is continuing with no clear end in sight.
Employee retention is crucial, and far too many organizations are getting it wrong. Employees will keep shuffling until they find a company that does it right.
This is where you come in. Adopting solid employee retention strategies attracts these shuffling workers to your company. They also increase satisfaction, boost engagement, and create a healthy company culture.
This blog explores the best employee retention strategies to keep top talent in your organization, including strategies such as offering growth opportunities, refining your onboarding process, and ensuring employees have autonomy and flexibility.
Table of contents
What are employee retention strategies?
Employee retention strategies are practices and policies designed to keep great talent in a company and reduce turnover. These strategies are created to engage and motivate employees as well as boost satisfaction.
Employee turnover and retention are two of the highest priority metrics to manage for HR professionals. High turnover and low retention cost your organization money, damage your brand image, and discourage future candidates from applying.
Potential candidates may see a company with high turnover and make assumptions about work culture and the quality of the workplace that would make employees quit.
Beth Kelzer, a senior career coach and job search strategist, tells job-seekers that high turnover at a company is one of her top red flags right alongside a complicated hiring process and a disrespectful interviewer.
Building successful, reliable employee retention strategies is essential to managing these metrics and protecting your bottom line.
If you’re interested in calculating your turnover rate and diving deeper into why retention matters, read our guide on how to calculate turnover rate.
The 12 best employee retention strategies
Attracting and retaining workers is more important than ever in today’s constantly shifting landscape.
This means that you have to manage your current workforce, but shuffling workers also give you an opportunity to attract great new talent.
Let’s take a look at these strategies for improving your employee retention rate and how they keep your people satisfied.
The top employee retention strategies: A summary
| Strategy | Description |
| 1. Ensure you have a strategic onboarding process for both in-office and remote work hires | Make your employee’s first impression a good one with solid onboarding; Remember to clarify responsibilities, educate on software, and ensure new hires have someone to ask questions to |
| 2. Try professional development plans and career portfolios | Facilitate employee growth by helping workers build professional development plans to map out their goals; Encourage multipotentialites to expand their job roles with career portfolios |
| 3. Offer a mixture of attractive traditional and nontraditional benefits | Offer solid traditional benefits like health care and vacation days; Offer nontraditional benefits like flexible schedules and childcare to set yourself apart |
| 4. Build competitive compensation packages | Try using skills-based compensation and pay employees by their skill sets; Encourage salary transparency so employees know their pay upfront |
| 5. Implement stay and exit interviews | Implement stay interviews to find out why employees like to work for your company; Implement exit interviews to find out why a worker is leaving and how you can improve the process |
| 6. Focus on a healthy, inclusive culture where diversity is valued and celebrated | Discourage toxic behaviors that go against inclusivity; Build a psychologically safe workplace where employees can ask questions and make mistakes |
| 7. Invest in one-on-one coaching and mentoring | Give employees the opportunity to privately discuss feedback and professional growth; Let your employees know they’re valued by setting time aside for them |
| 8. Create a culture of recognition and feedback | Recognize your employees and celebrate their wins; it’s too easy to let it slip by; Nurture a culture of peer-to-peer recognition to naturally promote recognition |
| 9. Offer flexibility of all sorts | Help employees feel appreciated by giving them control over their work; Grant them flexibility in hours, location, and benefits |
| 10. Build and value multi-generational teams | Promote a harmonious culture where multiple generations are respected and catered to; Encourage different age groups to team up and learn from each other |
| 11. Hire employees who have the skills to succeed in the first place | Use skills-based hiring to assess candidate skills and hire them for the right role; Reduce the number of mis-hires that end in turnover by verifying capabilities |
| 12. Provide abundant opportunities for upskilling, reskilling, and internal mobility | Offer learning and development opportunities to all employees; Encourage internal mobility to attract and retain talent |
1. Ensure you have a strategic onboarding process for both in-office and remote hires
Good onboarding is essential for a great employee experience, regardless of if it’s in-office or remote onboarding.
After all, it’s the first solid impression employees get of your company, your culture, and your people.
A strong onboarding program can maintain up to 82% retention among new hires, with productivity levels improving by 70%. Organizations with weak onboarding programs are much more likely to lose these employees within the first year.[2]
Here are our onboarding best practices:
- Appoint an onboarding mentor
- Make hires feel welcome with onboarding packages
- Offer new hires sessions with IT to set up their software
- Communicate your culture and values
- Clarify job roles and responsibilities
Now, how exactly do these onboarding practices work as an employee retention strategy? Let’s start with a hypothetical scenario.
Latisha was just hired for a new role, and she’s eager to get started and join the team. However, on her first day, she isn’t given clear responsibilities or instructions, she isn’t shown how to use the software, and she has no idea where to direct questions.
This pattern continues for the next few weeks until Latisha is so confused and frustrated that she leaves the company.
A real-life example of an excellent onboarding program is none other than Google.
Here are some of Google’s great onboarding practices:
- Using onboarding checklists
- Actively involving managers in onboarding
- Weaving their culture into the process
- Clearly defining roles & responsibilities from the first day
- Matching new hires with colleagues
- Helping employees build social networks within the company
- Setting regular check-ins and 1:1s during a hire’s first year
- Establishing an open-door policy[3]
Sundas Khalid, a principal analytics lead at Google, speaks in-depth about her first day at Google. She raves about orientation, having an onboarding buddy to direct questions to, and learning about Google’s culture.
How did this onboarding impact Sundas’s overall retention?
Nearly three years later, Sundas is still with the company and going strong. She mentioned in a recent post that she loves the work environment, culture, and people, and she hopes to help hire another analytical lead to expand the team.
Onboarding is your first and strongest impression on new employees, so it’s not only important to get right – it’s the perfect opportunity to show workers your culture, organization, and smooth processes.
2. Try professional development plans and career portfolios
Career advancement is essential in this current landscape. This isn’t just offering growth opportunities for the “high-performers,” but rather inclusively for every employee.
Modern employees rightfully demand career growth and aren’t satisfied with staying in the same place for too long if they don’t get it.
A study by Lever found that 31% of employees would take a pay cut to take on a new role they were more satisfied with, and a further 61% would begin searching for a new job if their company didn’t help them start a new role.
Career growth is especially important to consider when hiring Gen Z, the newest addition to the workforce.
One survey found that 67% of Gen Z workers want an employer that helps them learn skills that will advance their careers.
You can help your people advance their careers by offering both professional development plans and career portfolios.
Let’s discuss professional development plans first.
A professional development plan is a document that describes an employee’s goals and the strategies and skills needed to achieve them.
These documents are generally made by having an employee complete a self-assessment, then verifying their skills and helping them lay out their goals as well as the resources you can offer to help them achieve them.
What about career portfolios?
Career portfolios represent the concept of career growth without a clear “ladder.” They’re a mix of roles and responsibilities based on the employee’s skills.
For example, an employee began their career in sales, eventually moved into a marketing role, but now has their eyes on a position in HR.
Helping employees build their careers vastly improves retention and job satisfaction. Many employees crave learning opportunities and novelty, and career portfolios give a bright opportunity for exploring new skills and capabilities.
Individuals with multiple skill sets are called multipotentialites, and enabling them to explore all their talents is not only an excellent employee retention strategy but also improves efficiency in your organization.
3. Offer a mixture of attractive traditional and nontraditional employee benefits
Great work benefits are one of the top employee retention strategies.
Salary isn’t all that matters, and great benefits create an employee compensation package that increases satisfaction and reduces turnover.
Traditional benefits, like pensions and vacation time, are still essential for employee retention, but modern employees demand more – including “nontraditional” benefits.
Nontraditional benefits give your company the edge over other organizations. To a candidate, the difference between two similar job offers could be the offer of flexible work and a professional development budget.
Here are a few common nontraditional benefits:
- Financial planning
- Flexible work policy (we’ll talk about that more later)
- A professional development budget
- Unlimited paid time off
- Work-life balance policies
- Family planning and childcare
- Social connections for remote and hybrid workers
- Both mental and physical wellness perks
That last point is especially important to note. Wellbeing initiatives that support workers, build their resilience, and help them overcome personal difficulties are more important now than ever.
These initiatives could include mental health days or even sessions with therapists and counselors.
A great example of a company that offers nontraditional benefits is Salesforce.
Salesforce is dedicated to helping its employees maintain wellness and excel in their career growth through its benefits.
Here’s a selection of Salesforce’s top benefits:
- Tuition reimbursement
- Learning and development
- Travel assistance
- Pet-friendly workplace
- Family planning
- Wellness reimbursement
- Maternity and paternity leave
And they must be doing something right because Salesforce’s retention rate is within the top 15% among a pool of more than 1,300 similar-sized companies.
For more insights, read our guide on non traditional benefits and which ones to adopt.
4. Build competitive compensation packages
Salary isn’t everything, but it’s still critically important.
Everyone has a job to pay for living expenses, so employees need a competitive salary or they’ll find someplace new.
Besides compensating workers for their effort, fair compensation is also important because it shows employees that they’re valued. This recognition leads to stronger loyalty and higher satisfaction.
We recommend using skills-based compensation when determining employee salaries.
Skills-based compensation establishes a salary on individual employee skill sets and competencies rather than their qualifications, work history, or connections.
This model isn’t just more fair, it also attracts new talent, makes happier employees, and encourages workers to learn new skills.
Here are a few tips for implementing skills-based compensation in your organization:
- Discover pay gaps to ensure equal pay
- Ensure you can accurately assess skills and capabilities
- Identify key skills and define skill levels
- Use skills tests to verify and assess new skills
- Be transparent about pay
Let’s quickly discuss that last point because it’s worth separately talking about salary transparency.
Salary transparency is gaining traction, and it’s quickly becoming crucial in recruiting and promoting, helping retain current employees and attract new talent.
One study by Talent.com found that 98% of job seekers in England want to know the salary before applying for an open position, and 74% believe that pay transparency creates a fairer environment for everyone involved.
Being open about pay builds trust with your employees, boosts engagement, and creates a healthier company culture.
5. Implement stay and exit interviews
Both stay and exit interviews help you get an insight into your processes and how you can improve them. This improves the employee experience and increases retention.
Let’s quickly talk about both concepts.
Stay interviews are when an employer discusses what an employee likes about a company and what they think can be improved. They show employees that their opinions are valued and also help you improve company processes.
These interviews help HR professionals understand why employees stay and what could cause them to leave. This helps you identify areas of improvement, but it also helps you determine what you’re doing right (and keep at it).
Calling in an employee for a stay interview should not be scary for them. It’s like a performance review, but in reverse – they have free reign to speak their minds, but the responsibility falls on you to listen to them and take in feedback.
What about exit interviews?
Exit interviews are conducted when an employee leaves to gain insights into their departure.
It’s always disappointing to lose an employee, but exit interviews help you leverage the learning points and improve the process for the future, preventing turnover.
Here are a few sample exit interview questions:
- “What led you to start searching for a new job?”
- “What did you like best and least about your job and this company?”
- “Do you think your job has changed since you were hired?”
- “Do you feel you were given adequate support, resources, and tools to succeed in your job?”
Exit interviews are also a great way to mutually part with an employee on good terms. Not only does this protect the reputation of your company over word of mouth or websites like Glassdoor, but it also increases the likelihood of them being rehired as a boomerang employee down the road.
To read our extensive guide on the subject, check out our blog on exit interviews.
6. Focus on a healthy, inclusive culture where diversity is valued and celebrated
Toxic culture is one of the biggest detriments to preventing turnover, and managing it is one of the most effective employee retention strategies.
A study by MIT Sloan found that a toxic corporate culture is the greatest driver of attrition, 10.4 times higher than compensation issues.
A lot contributes to a toxic culture, such as cutthroat competitiveness, exclusivity, verbal abuse, and harassment. These negative attributes are driving thousands of workers away from their companies. More than anything, toxic culture is driving the Great Resignation.
One of the best employee retention strategies is prioritizing an inclusive culture where employees feel accepted, welcomed, and appreciated.
Here are a few tips on how to improve your company culture and improve retention:
- Promote having a good work-life balance in your organization and encourage employees to set boundaries
- Hire candidates using culture add over culture fit to find employees with shared values, but still respect their diverse ideas
- Avoid hiring or retaining “workplace assholes,” because their attitude has consequences for the rest of the team and can be a huge detriment to your culture
- Encourage psychological safety and ensure that every employee has the freedom to take risks, ask questions, and make mistakes
Improving your company culture is a huge win for inclusivity, and improving your inclusiveness is one of the strongest tactics to reduce turnover and boost retention.
7. Invest in one-on-one coaching and mentoring
Communication is key, and talking to your people is a powerful employee retention strategy.
The importance of regular 1:1 meetings (think every one to two weeks) cannot be overstated.
We aren’t just talking about a typical status update. Great one-on-one meetings should discuss employee growth, general wellbeing, and feedback from both sides.
Here are a few underrated (but important) things to discuss in 1:1 meetings:
- Ask employees where they want their career to go and how you can help them achieve it
- Give constructive feedback and ask them for feedback on the performance of you or your company
- Help them with areas of improvement and offer resources to help
- Ask working parents how they’re getting on and what the company can do to help
- Ask if they feel they’re being challenged enough or too challenged (balance is key here)
Regular one-on-one meetings have a real impact and lead to better relationships, improved performance, and higher engagement.
It may sound cliche, but one of the biggest detriments to the employee experience is the lack of communication. Strategies for employee retention can involve incentives and benefits, but often what employees need most is a conversation about their goals and their progress.
Employees need their employer to care about them and their work.
8. Create a culture of recognition and feedback
Employees crave recognition. In a study by Great Place To Work, recognition was found to be the top driver of hard work. It ranked higher than promotions, higher pay, autonomy, and training.
Employees need to hear they’re doing a good job, but unfortunately, few employees receive the recognition they need.
One study found that 67% of managers think they’re above average in offering praise and recognition, but only 23% of their employees agree.
This shows a gap between the opinions of managers and employees, and from that gap comes a horde of unsatisfied employees.
The easiest way to boost the frequency and quality of recognition in your organization is by weaving it directly into your culture. In a company with a culture of recognition, praise happens organically.
Let’s take a look at a few ways to build a culture of recognition:
- Include a moment for recognition during weekly huddles
- Implement a “kudos” channel on your group chat, like Slack or Google Chat
- Recognize the achievements of all employees and leave no one out
- Gamify the recognition process
- Give workers a chance for public recognition (like social media or the company website)
Nurturing a culture of recognition creates the perfect environment for peer-to-peer recognition to happen naturally.
Peer-to-peer recognition creates a healthy culture where colleagues praise and recognize each other unprompted, which builds a positive atmosphere that reduces turnover.
For more insights, read our guide on peer to peer recognition.
9. Offer flexibility of all sorts
Workplace flexibility and autonomy are the future of the workplace, and employees need some flexibility to want to stay at your organization.
Employees want a company to have a flexible working policy and to have benefits that aren’t “one-size-fits-all.”
Flexibility is a broad term, so let’s discuss different areas you can offer flexibility:
| Flexibility option | Description |
| Working hours | Many employees need to work around a tight schedule, or they might only get work done when they’re feeling the most productive. This includes working parents, who may need to work around school schedules or whenever their energy is highest. |
| Locations | Enabling employees to get their work done where it’s easiest for them helps employees who struggle with commuting or simply work better at home. |
| Employee benefits | It’s crucial to personalize benefits to each employee. Some employees would consider a pet-friendly office a dealbreaker, but that wouldn’t matter much to someone without a dog. |
Flexibility is critical to the modern worker and for many, it isn’t just a “nice-to-have” – it’s a “must-have,” and if they can’t get the right accommodations, they’ll have to find a new job. In the current labor market, that’s your loss, not theirs.
These workers are leaving their companies because of specific lifestyles and responsibilities that demand they have flexibility. This means that if you do have this flexibility, they’ll be attracted to your offer.
10. Build and value multi-generational teams
A multi-generational workforce, also called generational diversity, is the concept of fostering multiple ages and generations in your workplace.
For example, a multi-generational team could consist of Gen Z’ers, Millennials, and Baby Boomers.
Multi-generational teams are particularly important right now because we currently have five separate generations in the workforce, and they all have unique preferences, communication styles, and approaches to maintaining productivity.
Encouraging harmony between these generations provides some excellent benefits:
- Knowledge sharing
- A more inclusive culture
- Discouraging bullying and discrimination
- Expanded talent pool
- Better succession planning
- More perspectives and a better knowledge of customers
- Discouraging and reducing age discrimination
We’ll also mention the obvious: Encouraging inclusivity towards every generation increases their satisfaction and retention.
So what do employees think of a multi-generational workforce?
One study found that 86% of workers prefer working on a multigenerational team, and 86% also said multigenerational teams enable them to come up with innovative ideas and solutions.
One of the best ways to promote a healthy, multi-generational culture is by adopting skills-based hiring. These hiring practices focus on real skill and capability and reduce bias, leading you to hire whoever is best for the role, regardless of age.
To read about this topic in-depth, check out our blog on generational diversity.
11. Hire employees who have the skills to succeed in the first place
Retention starts with recruitment. An employee will never stay in a role that they were never suited for.
Take a look at your hiring process. How are people assessed for the position and hired? Were they suited to the role from the beginning?
If a candidate doesn’t have the right skills from the start, it’s easy for them to grow frustrated and need to move on, but hiring the right people for the right roles is a surefire way to increase retention and lower turnover.
According to TestGorilla’s State of Skills-Based Hiring report, among organizations that used skills-based hiring practices in 2022:
- 92.5% saw a reduction in mis-hires
- 91.2% saw an increase in retention
The report also found that 72.1% of employees hired via skills-based hiring are happy in their role.
It might sound surprising at first, but it isn’t difficult to understand why skills-based hiring impacts retention and employee happiness like this.
When a candidate is accurately evaluated and hired for their skills, it ensures their skill sets, personality, and culture match both the role and your organization. This increases their confidence and comfort in completing their responsibilities.
Doesn’t it make sense that a high score in the SQLite Coding test would verify skill more accurately than a resume that says “excellent coding skills?”
Resumes aren’t a reliable indicator of performance and skill, and relying on them can leave you with bad hires that increase turnover and disrupt your culture in the process.
If you’re feeling brave, check out our 5 stories from resume recruiting hell to see what we mean.
12. Provide abundant opportunities for upskilling, reskilling, and internal mobility
Employees need learning and development opportunities to stay with an organization. In fact, the desire for more learning opportunities is a prominent factor driving the Great Discontent.
One study found that 48% of workers would switch jobs if offered upskilling opportunities.
Workers crave development, and, let’s be honest, you want them to. Doesn’t every employer want their employees to strive for improvement?
It’s imperative for employers to provide and offer upskilling and reskilling opportunities for all employees. Yes, all. No matter the role, every worker wants upward mobility, so it’s important to be inclusive with upskilling offers.
This is a great topic to bring up in your one-on-one meetings. Ask employees about their interests and what skills they’d like to develop so you can assess their current skills gaps and forecast their needed future skills.
Ensuring your people have access to learning and development as well as internal mobility improves their overall satisfaction, and it also improves your brand image for future candidates.
Use these innovative employee retention strategies to support and retain your workforce
We live in tumultuous times, but with these employee engagement and retention strategies, you can attract and retain the best talent now and for years to come.
Support your people with an inclusive culture and solid communication, and offer plenty of opportunities for professional growth. You’ll not only keep your current employees, but you’ll also attract new shuffling workers.
For more insights on this topic, check out our article on the best practices to reward and retain talent.
If you’re interested in assessing a candidate’s real skills to match them to the right role, browse our test library.
Sources
- “Job Openings and Labor Turnover Survey”. (2023). U.S. Bureau of Labor Statistics. Retrieved May 1, 2023. https://www.bls.gov/jlt/home.htm
- “The True Cost of a Bad Hire”. (August 2015). Brandon Hall Group. Retrieved May 1, 2023. https://b2b-assets.glassdoor.com/the-true-cost-of-a-bad-hire.pdf
- Klazema, Michael. (May 30, 2018). “An inside look at Google’s hiring and onboarding processes”. BetaNews. Retrieved May 1, 2023. https://betanews.com/2018/05/30/an-inside-look-at-googles-hiring-and-onboarding-processes/
