Employee retention is a hot topic here at iTacit. Given that a primary function of our software is to engage and retain front-line teams, we’re constantly researching best practices and engaging workforce management experts. For my part though, I’m responsible for our own employee retention strategies and today I’ll share how I ensure our company has enough staff to grow, and keep our best workers happy and productive.

Before we get into five best employee retention strategies that really work, we’ll explain the main reasons great employees choose to leave a job. 

First, let’s take a look at the importance of employee retention and why it’s a crucial aspect of your business as well as ours.

Why Employee Retention Is Important

Finding the best talent is one of the main goals of every organization. HR teams diligently search for profiles that align with the company culture, have potential for growth, and will generate impactful results. 

But it’s not enough to just onboard these potential all-stars. Keeping them happy and engaged at work is equally, if not more, critical to the business. The Great Resignation proved that staff feel more comfortable leaving jobs than ever before if they aren’t satisfied and engaged.

Employee retention strategy is a complex web of policy, culture, organizational structure, and sometimes even luck. It takes commitment from hiring managers, HR leaders, and the entire team to create an environment that is healthy and productive for every employee in the company.

Retention Drives Engagement

If employees stay long term, the better they know the ins-and-outs of the company culture. They bring their deep-rooted personal experience to everything they do at work. Retaining employees keeps this culture alive and strong.

With high employee job satisfaction, workers will exude this passion throughout the company. To keep the right people for the long haul, they need to be engaged. 

Engaged employees are much more likely to stay with an employer long-term. And when they’re engaged at work, they’re happy, healthy, and have a better outlook on their career within the organization. 

The High Cost of Employee Turnover

Onboarding new hires and training require substantial amounts of financial and human resources. Why let this investment go to waste? The cost of replacing an employee can range from one-half to two times the employee’s annual salary! 

On top of the drain on resources, in such a competitive labor market, losing out on talent can stunt your company’s growth plans. After finding and training great workers, losing them stings that much more. 

Limiting staff turnover, and improving retention, is therefore essential for your organization to thrive as we move towards the future of work.

Why are workers leaving?

There are many reasons that influence an employee’s reasons for leaving a position. Managers and company culture can’t predict and control every individual’s choices, but there are certainly some major (and common) reasons that people leave a job.

Direct Managers and Management Styles

Every manager has a different style. And every employee reacts in a different way to how their leaders manage. 

It’s well known that a large percentage of workers quit because of their bosses. For example, this 2019 survey found that 57 percent of employees have left a job because of their manager.

Insufficient management training, or untrained/unqualified people put in management positions, will directly affect employees’ lives at work. Nobody wants to work for a “bad boss” – it’s up to organizational leadership to ensure managers and team leaders are properly equipped to excel at their jobs.

Benefits and Pay 

One of the most obvious reasons people decide to stay or leave a position is pay. Salary and benefits are the reason work exists. Without them, your organization probably wouldn’t have any employees.

Competitive remuneration is essential to hire and retain top talent. It’s not everything, but it’s clearly extremely important. In 2021, according to this Pew Research Center survey, 63% of workers who quit a job in 2021 cite low pay as the reason.

Discussing pay level and increases is often hard work for some managers and individual employees. Workers could be unhappy with their package but keep it to themselves. On the other hand, for leaders, managing salaries and deciding on a person’s pay can create difficult and uncomfortable decisions. 

To be able to retain great talent, it’s clear that it takes competitive pay and better benefits.

Personal Values, Particularly for Gen Z

Candidates are increasingly looking for organizations whose company values and culture align with their personal values. According to this recent study, over half of the 5000 respondents said that company culture is more important than salary when it comes to job satisfaction.

With the influx of Gen Z into the workplace, this alignment of values is even more important. Gen Z is bringing with them a genuine organizational culture of respect, diversity, transparency, and interconnectedness. 

Employers need to adapt to this changing workforce to ensure their retention policies match the values in the future of work to attract and retain this wave of new employees. 

Lack of Communication 

Navigating the workplace can be confusing. Without routine feedback and communication from leadership, many employees are unaware how they are performing. Yearly performance reviews are often not enough.

Without transparency and a two-way communication with leadership, employees become frustrated. They can feel left in the dark and even unappreciated.

On top of one-to-one communication, a lack of social interaction (like on an intranet) can also leave employees feeling isolated. Especially with the rise of remote and hybrid workplaces, communication amongst colleagues is necessary to feel connected.

Lack of communication keeps people out of the loop, questioning their place in the organization, and potentially feeling isolated.

Work-life Balance

We’ve all heard about the importance of a healthy work-life balance. When work takes over too much of your life, it inevitably becomes a dire situation. Stress and anxiety can build up and cause undue harm to an employee.

Organizations that allow their employees’ work-life balance to become untenable will have a high turnover rate. It’s important to have clear policies and effective strategies in place to help workers obtain and maintain a healthy balance.

Feeling of Being Undervalued – or Voice Isn’t Heard 

Ensuring that every employee has the opportunity to express their ideas and opinions is paramount to creating an inclusive and productive workplace. 

When their voices are heard, employees feel more empowered and more engaged. It’s no surprise that if their voice is left unheard, workers are quick to find a new position where they feel more valued.

Effective Employee Retention Strategies

Now that we have a better understanding about why employees leave, let’s dive into the five best employee retention strategies.

Create an Engaging Culture

Company culture provides a base from which to define business strategies, company identity, and the employee experience. 

Culture can be hard to change. It often requires a re-wiring of core values and organizational structure. One aspect that can and should be worked on, however, is employee engagement. 

Creating an engaging environment is essential to keep employees happy, healthy, and committed. Engaged employees will be more productive and, in turn, be more likely to stay with the company.

There are many ways to increase engagement throughout an organization. Activities – from fun team building outings to training and professional development courses – are proven to boost engagement. 

When workers are enthusiastic and content at work every day, they’ll be far more likely to show dedication to the company and team members, and take pride in the work they’re doing.

Be Honest with Employees About Their Performance

Performance reviews on a regular basis offer a consistent and practical feedback loop between management and the employee. Evaluating performance can be difficult and awkward, but being honest and transparent is the best strategy. 

Approach negative feedback with caution and with a constructive tone. An employee will become discouraged with criticism. Be honest about how they’re performing, but be prepared with solutions for any corrective action.

If you aren’t honest and transparent, employees will have mixed feelings about their performance. Additionally, in larger companies with many teams and managers, a lack of transparency and strategy will cause unbalanced evaluations, leading to mixed-messaging across the employee base.

It’s great that over most organizations have annual performance reviews, but a continued effort to increase the quality and consistency of these reviews, as well as using peer-feedback, will paint a more complete and accurate picture for your employees.

Be Transparent About Goals and Objectives

Goals and objectives for employees should be ambitious. But they should also be realistic.

Both employees and the employer have vested interest in pursuing and achieving individual goals. For the employee, completing their goals will directly contribute to career advancement. And for the organization, these achievements could very likely correspond to business gains.

Leaders should work with employees to set realistic goals from both the company and individual perspectives. Clear rewards should also be outlined for when the goals are achieved.

Will the employee’s career advancement directly benefit from achieving these goals? 

Job enlargement refers to the practice of adding tasks and responsibilities to make an employee’s work more rewarding. It’s been shown that working towards goals is a great way to achieve employee retention through job enlargement.

Career path and the employee journey should be discussed regularly and with transparency. Stay interviews can also be used to glean insight into how the employee sees their advancement, goals, and future at work.

Offer Training Opportunities

Great talent needs to be nurtured. Without career advancement opportunities, many outstanding employees will start seeking new positions and new employers. In-house training is an effective, and necessary, method to help keep your workers on board, engaged, and happy.

Digital training solutions, like an employee app with LMS, are effective ways to maximize and streamline employee training.

Offering equal training programs across the employee base is intuitive and practical with an LMS. Organizations can create individual development plans and career development programs that can be accessed on the employee’s own time, from any smartphone, tablet, or laptop.

Organizations need to offer flexible, robust in-house skilling opportunities to attract, develop, and retain top talent.

Offer Flexible Work Hours

Employees want autonomy by way of flexible work options. 61% of respondents in this HBR study reported they would prefer if management allowed them to come into the office when they need to and work from home when they need to. 

We mentioned that an unhealthy work-life balance is one of the main reasons people leave a job. By offering flexible hours, you give employees more freedom over their schedules. They have that flexibility to leave work a bit early to take care of personal matters. 

Family-friendly policies like remote work, flextime hours, sick leave, child care, and parental leave will greatly increase quality of work-life balance, boost mental health, and drive retention. But it’s essential that managers must be trained on how to create a culture of a healthy balance. 

For business leaders, you have to be adaptable by creating a work environment that gives your employees the flexibility they need to achieve the work-life balance they want. Try to understand your team’s needs on a group and individual level. A little empathy goes a long way.

To Keep Great Employees, Keep Them Engaged  

Employee engagement takes dedication from every department and team. When it comes to retaining great workers, keeping staff engaged is well worth the effort. 

For more information and tips on how to optimize employee engagement, read our guide on 20 employee engagement ideas for large companies or schedule a demo with our employee engagement software.