8 Employee Retention Strategies that Actually Work

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November 20, 2020

Hello! You found our list of proven employee retention strategies.

Employee retention strategies are ways to reduce staff turnover and hold onto your organization’s talent. These approaches not only save on hiring and training costs, but also increase employee satisfaction. These strategies are also known as “employee retention techniques.”

These strategies are similar to employee engagement best practices.

This list includes:

  • employee retention tips for managers
  • employee retention techniques in banks
  • employee retention strategy ideas

And more!

Let’s get started.

List of Employee retention strategies

From competitive pay to coworker bonds to staff development, here is a list of techniques for employee retention that persuade team members to remain within roles longer.

1. Hire the correct candidates

The first step to employee retention is hiring the correct candidates. If a job is not the right fit for employees, then all the employee retention techniques in the world may not be enough to convince staff to stay.

When interviewing, assess the candidate’s skills and traits in terms of what the team needs or lacks. Hiring is not merely a matter of finding qualified and talented candidates, but finding candidates that possess qualities that fill gaps. Great teams are like a tool belt; you would not try to fix a sink using a box full of only hammers, and you should not tackle projects using a team of employees with identical skill sets. Instead, you should fill your team with varying perspectives and abilities. Your crew will be more confident and capable, less stressed, and more apt to stick around.

You should also consider the interviewee’s personality and culture fit. Interactions and relations with colleagues are a major employee satisfaction factor. While you want to hire folks with fresh viewpoints, you also want teammates who can see eye to eye. Healthy debate is good in moderation, but constant clashes create a stressful environment. On the other hand, employees who gel with coworkers perform at higher levels and remain at companies longer.

Speaking of job longevity, you should check to ensure that expectations align during the interview. While expecting every hire to remain indefinitely is unreasonable, if you seek a longtime teammate but the candidate merely wants to wet their feet for a year or two, the position may not be compatible. No one wants to have to go back to the job board, but hiring a mismatch only delays, not eliminates, the job search grind for both parties.

Here is a list of interview questions to ask and recommended applicant tracking software.

2. Provide competitive pay

Work is about more than a paycheck, but money is still a major factor when employees decide whether to accept a job offer or leave an organization. One of the most obvious employee retention strategy ideas is to launch competitive pay programs. Though many professionals are willing to make pay concessions for benefits such as meaningful work, positive environment, or flexibility, if your wages are not comparable within your industry then you are likely to lose talent to competitors.

Salary is not only a money matter, but also a sign of respect. By providing wages that keep pace with the industry and the cost of living, you signal that you value and care about your employees. Furthermore, there should be compensation differences between new hires and veteran employees performing the same jobs. Paying a fresh-out-of-college grad with a single internship the same wage as the trainer with dual masters degrees, multiple certifications, and two decades of experience signals to the latter employee that seeking opportunities elsewhere would be more profitable and fulfilling.

If you cannot afford to outbid competitors, then you can compensate by providing other perks such as bonus opportunities, flexible working hours, stock options, and a great work environment. You can also lay out a timeline so that employees are optimistic about future compensation. Your pay structure should be transparent and understandable so that your employees have accurate expectations.

Learn more about employee benefits.

3. Send out employee retention surveys

Communication is important in any relationship. You often hear break up stories where one party exclaims, “I had no idea my partner was that unhappy!” You do not want to be the dumbfounded lover in this metaphor. You want to know about the upset before employees arrive in your office so that you can take steps to remedy the dissatisfaction.

You may not have time to host a heart-to-heart with every member of your organization, but you can send out employee engagement surveys to catch early warning signs and implement fixes.

Here are a few sample employee engagement retention survey questions:

  • Do you enjoy working here, the majority of days?
  • Are you proud to work for this company?
  • Do you see yourself working here in one year? Two years? Five years?
  • What factors most impact whether you like your job?
  • Do you enjoy working with your current team?
  • Do you feel that your supervisor is fair, supportive, and invested in your growth?
  • Do you feel as if you have friends at work?
  • Do you feel as if you have a voice in the company?

To encourage complete honesty, you should keep surveys anonymous. If you want to have longer conversations, then you can call on voluntary focus groups. However, you should never confront individual employees about survey answers, as this erods trust.

You should address and act on the results of your survey. Employees want to feel heard, and will respect management who follows through on promises to change, even if that change is gradual. Staff who see leaders working towards solutions are more likely to hang around to see the outcomes of those changes.

4. Foster a safe and inclusive workplace environment

Identity factors such as race, gender, religion, disability, and veteran status all face unique challenges in the workplace. Not to mention, a professional might identify with multiple marginalized groups, and potentially face discrimination on mutliple levels.

Outwardly hostile workplaces are not the only environments that can stifle the career of a minority employee. Even well-meaning workplaces can sometimes ignore the needs of marginalized groups. According to Glassdoor, there is a subset of burnout known as “representation burnout,” which can transpire when an employee is the only member of a certain identity within the environment. Exhaustion can occur when an employee feels the need to constantly project a persona or hold back opinions in an effort to fit in. Or, if an employee’s views clash with those of coworkers, that employee can take on the role of an opponent instead of a collaborator, and can feel alienated as a result.

When diverse employees leave your organization, you lose both their talents and their unique perspectives; plus, the experience can have long-term impact on the professional’s career and mental health

Fortunately, there are steps organizations can take to foster a more welcoming workplace. First, companies can implement fair hiring practices that allow for more representation. Next, employers can make efforts to promote inclusivity. By embracing difference of opinion and experience, leaders can encourage employees to respect every individual.

Employers should create safe spaces for the expression of identity. For instance, a company may revise a dress code policy that deems a certain culture’s hairstyles as unprofessional, and may create identity support groups within the organization. The employer should also implement a zero tolerance towards discrimination or threats to an individual’s identity, and should back up these policies with meaningful action.

We tend to naturally gravitate towards and socialize with folks who are similar to us, but you can help teammates find common ground through regular team building exercises. Company-sponsored social events can foster initial connections and form foundations for staff from different backgrounds to build relationships.

Learn more ways to improve company culture.

5. Transform managers into leaders

The saying goes, people leave bad bosses, not bad jobs. In fact, research from human resource consultancy firm DDI found that 57% percent of respondents left a job specifically because of a manager. Compassionate and competent leaders can empower employees and inspire company loyalty, while disorganized or toxic leadership can cause staff to stray.

One of the best employee retention tips for managers is for supervisors to practice mindful and compassionate leadership. Great leaders unlock workers’ true potential and encourage employees to grow. Such leaders acknowledge teammates’ current and past accomplishments and skills, and identify areas that these employees can expand upon.

While ineffective leaders can be obstacles to a worker’s career, real leaders become co-collaborators to professional development. These leaders empower and inspire their staff. Such individuals lead by example with integrity and respect. True leaders unite teammates around a common goal and vision, and workers stick around longer to bring that goal to fruition. More importantly, a good leader offers recognition and expresses appreciation that makes staff members feel appreciated and valued.

One way managers can become stronger leaders is by developing team building skills.

6. Build bonds between employees

Employees often spend more time with colleagues than with friends or family, so those relationships should ideally be positive and boost feelings of wellbeing. Work friendships are a major job retention factor. According to the Society for Human Resource Management, 62% of employees with one to five work friends would reject a job offer elsewhere, while 70% of employees with six to 25 work friends would turn down new employment.

Fostering work friendships is one of the most powerful yet underutilized employee retention techniques. Admiration and affection for colleagues inspires employees to perform at higher levels and remain at the company out of loyalty. Teammates who like colleagues will enjoy the workplace more, and will be more hesitant to sacrifice relationships and a positive work environment for the unknown of a new job.

One way to build relationships between colleagues is by hosting regular interactive team building games both on and off the clock. You can also encourage regular interaction in common areas such as break rooms, or virtual breakrooms, such as Slack channels, in the case of remote teams.

7. Lay out a plan for employee growth

A study conducted by Robert Half found that only 47% of organizations run training and development programs, while Business Insider attests that 77% of employees feel “on their own,” in terms of growth and career development. Staff members who feel stagnated or stuck at a dead end are more likely to actively seek new employment. People want to progress in their careers, and plateauing workers might seek growth opportunities elsewhere if unable to imagine advancement at the current company.

By laying out a growth plan, leaders can banish doubts or restlessness and reassure employees. Managers should collaborate on this plan with the team member. The employee can pinpoint goals and desired career paths and the manager can outline the necessary steps and timeframes. Folks are less likely to give up if the finish line is in view. An employee who can visualize the time required to move up within an organization is more likely to stay than a staff member who cannot see the next step on the ladder.

Companies should also offer development opportunities to help employees sharpen skills and develop new competencies. Financing a course or certification signals an interest and investment in an employee’s future. Allowing for studying and learning on the clock shows respect for a teammates’ work-life balance.

Development plans are one of the main employee retention techniques in banks and large enterprises, since the demands of entry-level positions can discourage employees. Yet employees who envision the payoff to those great efforts are more likely to stay motivated and focused. The employer must clarify and confirm that goal and help the employee decide on a point to work towards.

You can learn more about growth areas for specific employees via personality tests.

8. Perform exit interviews

Some turnover is inevitable. Even the most dynamic and engaging employers lose teammates to unforeseeable conditions such as spouses securing jobs in new cities, sick family members needing caretaking, the appearance of an irresistible opportunity, or a general change in heart or life direction. Departures are not always within a company’s control, but employers should not automatically assume that the path was unavoidable.

Instead of guessing about a resigning employee’s intentions or motivations, organizations should conduct exit interviews. These interviews can examine whether or not the employee’s leaving was preventable, clarify whether the organization could have acted differently, and expose underlying trouble. Leaders can use the information gained in these interviews to fix issues and avoid additional turnover.

Even if outside circumstances drive an employee’s decision to leave, organizations can improve the environment and increase the retention rate. Regular exit interviews can identify patterns worth addressing. For instance, a company that notices that many talented young women quit to raise small children may consider offering daycare services or credits, or allowing more flexible work hours.

Conclusion

Recruiting and training is an expensive and time-intensive process. Even if you fill a vacant position quickly, a new hire needs time to learn and adjust to the new environment and to bond with teammates.

Not to mention, hiring is always a risk and an opportunity. While you can practice smart hiring tactics, you cannot guarantee that your new member will be a good fit. Though fresh hires can revitalize an organization, ideally the desire for new talent and perspective should drive the decision to hire rather than the need to fill a gap.

When you retain talent, your employees feel more secure and less strained, and your organization can dedicate the energy required to scout and woo new talent into more productive endeavors.

Next, check out this of tips for successful virtual teams.

FAQ: Employee Retention Techniques

Here are answers to common questions about employee retention techniques.

What does employee retention strategy mean?

An employee retention strategy is a plan to reduce turnover and retain talent within an organization while increasing employee engagement and performance. A good employee retention strategy identifies the main reasons for employee dissatisfaction or disengagement and remedies the issue while staying true to the organization’s mission and bottom line.

Why is employee retention important?

Employee turnover is time-consuming and expensive for organizations. According to the Society for Human Resource Management, filling a job vacancy costs companies an average of $4,129 and 42 days. This statistic does not account for the team building costs of adding a new group member, either.

Without effective employee retention strategies, companies can lose top talent to competitors, or can drive bright minds from industries entirely. Employee retention eliminates the costs and stress of job hunting for both parties, and builds a more positive, more productive work environment. Though companies want to reserve resources and maintain good brand reputations, organizations also want to foster great experiences for employees and create workplaces conducive to creativity, teamwork, and high performance.

What are employee retention techniques?

Employee retention techniques are methods of satisfying employee needs to encourage staff to stay with the company. These techniques address administrative aspects such as hiring and pay in addition to environmental factors such as diversity and inclusion and relationships with peers.

What are the best employee retention techniques?

The best employee retention techniques are building bonds between employees, transforming managers into leaders, and fostering a safe and inclusive work environment.

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Author: Angela Robinson

Team building content expert. Angela has a Master of Fine Arts in Creative Writing and worked as a community manager with Yelp to plan events for businesses.

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