If this decade has taught us anything, it’s that labor markets are only getting tighter. Technological advances like AI may (questionably, the ethics are a bit suspect here) provide some relief, but fewer high-quality employees means employee retention will continue to be a major thorn in the side of HR leaders everywhere.
Companies will always be people-driven, but if the right people are getting harder to find, it means the employee-employer dynamic will sit more squarely with workers. That means you can expect more turnover, especially among high performers. It also means companies must get more creative with their employee retention strategies, or risk losing their best employees to competitors whose offering is more aligned with workers’ needs.
Rather than letting these valuable workers drive up your employee turnover rates, your company may need to focus on strategies that retain employees longer. A good employee retention strategy isn’t just about offering something of value to your employees in the hopes that they feel welcomed and wanted. It is about choosing actions that lead to lasting change and a better working environment for all.
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Why Is Employee Retention So Important?
The average tenure of employees has been dropping year-over-year. While the global pandemic had an impact, this was a trend that pre-dated the pandemic. In fact, according to a Lending Tree study that analyzed data from the Bureau of Labor Statistics, the median tenure across all working ages has dropped 10%.
There's an even bigger story here, though, as the median tenure at work for women has dropped over 17% during that time period.
Employee retention is the strategy that keeps your top talent at your side for as long as possible. While the average years of tenure have dropped, you also don't want to see them bouncing on to their next role in under a year. Every industry has voluntary turnover, but you don't want to see new hires barely getting settled before they are out the door again.
Likewise, you want to make sure that your most valuable and experienced employees have the motivation to stay with you. Replacing their expertise could prove to be difficult and expensive, and their loss can negatively impact the team as a whole if good succession planning is not in place.
No manager wants to sit down and realize that their team is a sea of different faces compared to the same time last year. Employee retention strategies are needed to convince people that the best place for them is right here in your company and that the company overall is a great place to work.
Why Do Employees Leave?
Employees leave because either your company isn't supporting them in the ways they need or simply because they have a better offer elsewhere. Remember The Great Resignation? Of course you do. Bad news: Some industry observers are expecting a Great Resignation 2.0 in the coming future. That's based on surveys showing an overwhelming majority of people want to quit their current jobs.
The reasons why people are quitting are compounded by many different factors:
- Stagnant wages and compensation
- Little to no work-life balance
- Poor company culture
- Strict return-to-office mandates
That last one, in particular, is something that's driving high-potential and high-value employees right into the arms of competitors who still offer remote work. A recent study by researchers from the University of Michigan, Ipsos Public Affairs, and the University of Chicago found that RTO policies drive away not just talented employees but primarily senior-level employees. As the authors stated:
"Our results suggest that return-to-office policies can lead to an outflow of senior employees, posing a potential threat to the productivity, innovation, and competitiveness of the wider firm."
Another business might offer more competitive pay or better working hours. They might want to gain certain skills, work under or with a particular person, or even just want to support a specific cause. Sometimes, it is even due to no fault of your company; the employee is grateful for their time with you, but they are ready to move on.
Though retaining talent should be your goal, you also need to recognize when it is better to say goodbye. Nurturing relationships with those who do leave you can be helpful in case they decide to come back one day, but your focus, for now, should be on those employees you actively want to retain.
How to Get Employees to Stay
Encouraging employees to stay can require you to take a long, hard look at your current working environment to see where things might not exactly be optimal. You may have to adapt existing policies or potentially even create some new ones.
Any initiative needs to include dialogue with your employees. You cannot expect to make changes that benefit them without knowing where they are struggling. Many employees feel like they can't comfortably speak up about changes they would like to see unless they are first invited to do so. Giving them the opportunity to voice these changes fairly and openly can provoke the confidence that they need to do so.
10 effective employee retention strategies
No one line of action will fix any employee retention issues your organization may be dealing with. However, the 10 following strategies could help you make the changes needed to retain your employees more effectively.
1. Offer competitive salaries and compensation
We all need to start somewhere, and more often than not, this is with our pay. You need to have a good foundation of pay and a clear structure for how it increases over the length of service. Employees will feel motivated simply by knowing that they are paid fairly for their work.
Note this as well: Pay transparency is trending. Influencers such as Hannah Williams of Salary Transparent Street are on a mission to not only make pay transparency legally required in job postings, but are encouraging employees to ask for better salaries when they're underpaid based on the market.
@salarytransparentstreet #FinancialAnalyst in Atlanta, GA📍#salarytransparentstreet #salarytransparency #paytransparency #howmuchdoyoumake ♬ original sound - Salary Transparent Street
Will this be the only employee retention strategy you need? Most likely not, but you need to start somewhere.
Fair rates of pay should be a standard regardless of the industry you are in. When even your most junior and inexperienced members of staff are fairly compensated, everyone feels less likely to look elsewhere. Though you may take the federal minimum wage into consideration for low-ranking employees, you should also consider the living wage based on the state your employees are working from.
You should also take into consideration what your business's competition pays their employees. Competitive pay can be a key factor that could sway an employee into ditching your company for your business rivals. Offering top rates of pay can help you to attract and retain the best talent, meaning you won't have to waste thousands on potentially unfruitful recruitment processes or training up under-qualified second-choice hires.
2. Hire the right people
A lot of the groundwork for good employee retention strategies can be laid during the recruitment process. You obviously want to find candidates who match the skills and experience you need to see for success in your vacancy. However, you also need to find someone who will fit in well with the company culture.
Team chemistry can be difficult to get right, yet so much of a workforce's success can balance on it. You don't want to spend resources recruiting someone who meets your requirements on paper only for them to fail to mesh well with the rest of the team.
Creating and hiring based on certain core values can help here. At MentorcliQ, employees are hired not just on the skills they bring to the table but their alignment with our core values: Fun, Helpful, Ambitious, and Thoughtful (FunHAT, for short).
You need to have an employee value proposition handy, e.g., something that makes people want to work for you. That way, you'll attract the right people to your open positions.
3. Start on the right foot
It is never too early to start thinking about key retention strategies and how to minimize employee turnover. Recruitment is one thing, and onboarding is very much another. To truly retain employees, you need to make sure that you have a good onboarding process. We've mentioned it before, but research shows that new hires are also the most likely to jump ship. Though they should be keen to dive in and get to work, this crucial period can be where they don't feel like they fit in, and they may decide to move on (or even head back to their old role!).
Onboarding is a great point to introduce mentoring. It can be as formal as you like; some new hires can benefit from something formal and structured while others might just flourish with the help of a buddy system. Either way, it is a great way to engage new employees and help them feel welcome in the company as soon as possible.
4. Build a culture employees want to engage with
People will only want to stay with a company as long as there is room for them to feel welcome and belong. Building a collaborative and fun company culture is key. Though every business has difficult times, ultimately a good culture in the company means most employees feel like they are motivated and can come to work with a positive outlook on the day ahead. If work only causes stress and upset, employees will begin to look for roles in other companies.
A strong culture can look like many things. It might involve job security alongside satisfaction, or it might involve the development of in-demand skills across the full workforce. Mentorship programs and a commitment to a positive work environment all feed into effective employee retention strategies. Creating a culture that cares does not have to be industry jargon or a false corporate promise, it can be something that you all actively strive for as a company.
5. Boost employee engagement
Employee engagement is a key part of retention strategies. When employees are adequately engaged, they are more likely to be focused on their work, and less likely to start looking at more compelling job opportunities elsewhere.
In 2023, 50% of employees were thought to be not engaged with their work, and the rise of the quiet quitting trend — where employees refuse to go above and beyond, doing nothing except for their assigned work — shows that people are not as devoted to their jobs as they once were.
Choosing to build employee engagement can help increase job satisfaction and allow employees to fully understand their role and how it helps the company. When you see nothing but four cubicle walls and a computer screen all day, it can be difficult to know how the things you do aid the company.
Measuring employee job satisfaction isn't always the easiest of tasks, but there are a few ways you can facilitate it. Most importantly, employees need to be able to give honest and open feedback. Sometimes this is best done anonymously, other times an employee might feel safe enough to offer such feedback to a trusted manager or mentor.
Feedback can help to make adjustments to workflows or responsibilities, or it might be crucial in launching a key initiative that boosts employee satisfaction and retention overall. However, feedback should never be forced. Encourage employees to share their thoughts and feelings, but be aware that mandatory demands for feedback can bring negative effects and pushback, potentially disengaging employees further.
6. Reduce burnout through support and wellness offerings
It isn't just about the paycheck nowadays. A company's benefits package needs to be well-rounded and well-thought-out. A healthy work-life balance is the priority for many nowadays, with 72% of workers believing this to be a crucial part of choosing a job.
Even something as simple as allowing remote work or a few days working from home rather than in the office can make a huge difference in employee retention. Younger generations like millennials and Gen Z value being able to fit their working hours around their personal lives and commitments; the opposite of some of their older colleagues. If a job cannot adequately meet what an employee might require, such as flexible schedules to match up with childcare needs, it is understandable that a worker might look for a new job.
Employee benefits like snacks or coffee in the office and free gym memberships can sometimes seem a little basic, but they are popular for a reason. Other incentives like flexible PTO or mental health leave prove to be popular and again allow employees more control over their lives.
7. Offer tailored learning and development plans
Professional development is a must for all employees nowadays. Even the newest of hires fresh from college may have an idea of what they want their career trajectory to look like. All hires, no matter how established they are in their career should be offered the opportunity to sit down and talk about the skills and experiences they wish to gain in the future. Career mapping conversations can be ideal for employee retention. They allow managers and mentors to create tangible and achievable goals for their mentees to work towards, while also showing employees that their ambitions are respected by the company.
This is especially important for younger employees. One survey shows that 44% of workers aged 18-34 will consider leaving their jobs due to insufficient learning and development opportunities. In order to see increased employee retention for these key workers, many of whom are already moving into management positions, companies should look to develop employees as they best see fit.
8. Offer rewards and recognition programs
Everyone wants to be recognized for the job that they do. When we put the hard work into completing our task, we want to be rewarded. Though flexible hours and a better work-life balance are expected by employees as they should, the occasional reward and recognition can take things to the next level.
Providing employees with regular feedback lets them know about their accomplishments lie and where they could benefit from some improvement. Company-wide recognition can also help boost their self-esteem and confidence, and can range from afternoons off to seasonal bonuses or maybe even the dreaded corporate pizza party.
9. Improve management
You can plan as many employee retention strategies as you like — you can improve the working experience for all teams and ensure that even a new employee on their first day on the job will hit the ground running. However, nothing makes a job unbearable quite like a bad manager.
Employees quit when they work under someone who doesn't respect them or their abilities. If you don't want your top talent walking out the door, you need to ensure that those at the top of your organizational culture have the leadership and management skills needed to lead their teams correctly.
Creating a strong culture and uplifting the skills of managers are two retention strategies that need to go hand in hand. Analysis has shown that many people blame managers and quit when they should be blaming the system or company that they are all under. Nurturing both will help create a welcoming environment in which employees want to thrive.
10. Build collaboration and communication
A workforce needs to be able to collaborate and communicate with each other smoothly. This can be incredibly important with organizations that support flexible work arrangements as you might not be in the same office as a colleague, or even the same country! No matter what, lines of communication need to remain clear and open.
To perform at their best, employees need to maintain lines of communication. Though most should not have access to all messages passed within the business, no one should feel like they are deliberately being kept in the dark or caught off guard by changes.
Boost Employee Retention with Mentoring
Employee retention issues frequently pop up when workers feel disengaged and detached from the company. One proven employee engagement method that helps them see the value in their career and efforts will always be mentoring.
MentorcliQ makes employee retention easy by helping you quickly launch, match, engage, and measure participants into mentoring programs and employee resource groups (ERGs). Our top-rated employee mentoring and ERG software removes the administrative burden many mentoring programs require. Mentoring should form a key part of your company's health and wellness program and can really help employees define their own space and role within the company.
Get in touch with us and find out how MentorcliQ can engage and retain your employees today!
