Having established employee retention strategies in place is an integral part of your businesses employee retention efforts. Because by the time you notice the signs that someone is looking to leave your business, it’s often already too late.
Having an employee retention system in place can help your business not only reduce employee turnover, it can also help:
- Improve employee happiness, which in turn improves employee performance.
- Save you money on recruitment and onboarding costs.
- Give you greater returns on investment of training and development initiatives.
- Increase the overall value of your employees, who are more experienced with your business in particular.
- Your clients and customers will receive a higher level of service.
But that’s enough on why employee retention is so great. What are some actual employee retention strategies you can use?
10 Employee Retention Strategies
If you’re having issues with employee retention, then using these tips to create your own defined employee retention strategy can drastically improve your business and your employee’s productivity and enjoyment.
1. The Onboarding Process
Your Employee retention efforts start with your onboarding process. It’s your job as the manager, or employer, to not only set up your employees for success, but to help them feel a part of the business and culture.
The training and support that you provide them with from day one will set the tone for the rest of their employment at your business. And this looks like:
- Helping them to become a part of the team they join/ Or with a mentor or manager who will support them.
- Being transparent with what their first few weeks and months will look like, what they will learn and what is expected of them.
- Host or create social events to make them feel a part of the culture and start to build relationships and friendships with colleagues.
A strong employee onboarding process can help make your employee up to 18x more times committed to the workplace! We can’t overstate enough, how important a strong onboarding process is.
2. Your Company Culture
Company culture is one of the biggest drivers of employee retention for your business. So having an established company culture that attracts and retains the kinds of people you want in your business, can help to reduce employee turnover by up to 35%!
It’s so important in fact, that 92% of senior executives said that company culture is one of the three most important drivers of their business value.
Your company’s culture is one of your businesses most valuable tools. But it’s up to you to help new employees feel like a part of it.
3. A Structured and Transparent Career Progression Plan
No one likes uncertainty, especially around their brand-new job. Being upfront from the start helps your new and existing employees understand what their future at the company looks like. This can be what they need to achieve in their role to be promoted, to receive a bonus or commission, or what their 3-year employee plan looks like.
This can help your employees feel invested in their progression: Thereby increasing employee retention, as your employees will be more hesitant to throw away all their work towards a promotion, or pay-rise.
And a lack of a structured progression plan can have the opposite effect: When employees don’t know what they need to do to receive a promotion, they can stagnate in their careers and start looking elsewhere to receive promotions, which they feel may never come from you.
4. Ensure Your Team Are Fairly Compensated
As an employee progresses through their career, it’s important to make sure that not only are they being properly compensated for their work, but that they feel fairly compensated.
This can take the form of annual (or more frequent) salary reviews, to help ensure your team doesn’t feel forgotten about. Even when there is no pay rise, having this conversation helps employees feel recognised. And if a pay-rise isn’t in the budget, what else can you offer that would stop employee turnover?
5. Offer Perks Your Employees Actually Want
The perks you offer your employees can help you stand out from your competitors in a great way: from financial compensation, to remote and flexible working. What your business offers is often up to the industry you work in: Not every business model supports remote working or employee bonuses.
But having conversations with your employees about what you can reasonably offer them is crucial to improving employee retention: By providing your employees with the perks that they actually want.
6. Employee Wellbeing
More and more we’re seeing the introduction of employee benefits and perks centred around employee wellbeing. These can include a wide variety of employee wellness offering such as:
- Mental health days.
- Financial assistance to support mental wellbeing.
- Mental health support: counselling and therapy.
- Physical fitness support: Gym memberships and yoga classes etc.
This list goes on, but they’re all designed with one thing in mind: Improving your physical, financial or mental wellbeing. Because not only does it have a remarkable effect on employee retention, it can improve happiness and productivity! In fact, happy employees will stay with an employer 7 times longer than their unhappy counterparts!
7. Offering Hybrid and Remote Working
One of the biggest employee wellbeing perks introduced in the last few years, is the huge increase in hybrid and remote working. Not only is it proven to have a huge positive impact on the wellbeing of your employees, it shows you have the trust in your employees to get the work done regardless of their physical location.
So not only does it help with your employee retention, it can improve your employee attraction by making you a more attractive place to work.
So offering remote or hybrid work (when you can), can have a huge positive impact on your employee retention. As long as it is implemented correctly however…
8. Support a Real Work-Life Balance
But as we have moved to a more remote/ hybrid way of working, the work-life balance of employees has suffered. In the sudden move to remote working due to COVID, 80% of Brits felt that their mental health had suffered due to remote working. Due in part to the lack of separation between work and home.
As an employer, the responsibility can fall to you to make sure that your team’s workloads are manageable. Because your employees sometimes won’t feel comfortable coming to you with problems that they have.
It can be your job to make sure that your employees aren’t having to work on evenings or weekends to get their work done and burning themselves out.
9. Employee Recognition
Everyone wants to feel appreciated. And your employees are no exception to the rule. Employee recognition is something that is often overlooked by employers, but can have a huge effect: Because people want to feel like they work that they do matters.
This can be through financial incentives and rewards to team social events, depending on your industry. As a recruitment business, we offer financial rewards and holidays to the team: As well as offering genuine recognition for when one of the team helps someone find a new job.
Sometimes it just needs to be as simple as recognising the hard work your team does, especially if you don’t have a huge budget to work with.
10. Proper Exit Interview When People Do Leave
While this may seem counterintuitive, a proper exit interview for members of the team who leave can help improve further employee retention down the line.
Asking the person leaving what went wrong, and what you could have done differently in regards to their employment could prevent the same thing from happening with someone else.
Some businesses also use exit interviews as an opportunity to give counter offers. By this point we would consider it too late, and this person is likely to leave the company regardless of accepting a counter offer or not. But they can be used to inform your employee retention strategies moving forward as a business.
7 Different Employee Retention Theories and Models
What works best for your business may not be the same as someone else’s. But understanding the basics and common threads between these different employee retention models can give you the understanding you need to improve your employee retention, and develop your own employee retention strategies.
1. Maslow’s Hierarchy of Needs
The short of it: Make sure that your employee’s most important needs are being met.
This is the most commonly recognised motivational theory in psychology, and can be applied to the workplace. These five basic human levels of human need for the workplace look like this: Physiological needs, job security, belonging, self-esteem and self-actualisation.
What it means for your employee retention: Establish what these needs look like for your employees and how you meet them. This will assist you to identify areas of weakness and gaps in your employee retention efforts. For more information on Maslow’s Hierarchy of Needs, here’s a handy quick guide.
2. Herzberg’s Two-Factor Motivation-Hygiene Theory
The short of it: Herzberg argues there are two things employees need to feel satisfied: Fulfilment in their work and job security.
Herzberg separated the two-factors of employee needs into ‘Hygiene’ and ‘Motivators’ as being crucial to employee retention. First we have ‘Hygiene’: the company environment, job safety, salary, and company policies. Secondly we have ‘Motivators’: enjoyment of the work and opportunities for progression.
What it means for your employee retention: Making sure that your employees are satisfied with both ‘hygiene’ and ‘motivators’ will ensure strong employee retention.
3. Human Motivation Theory
The short of it: Your employee retention efforts should be tailored individually to each employee.
The human motivation theory states that there are three basic needs: power, achievement, and affiliation. And that every person has one of three basic needs leans towards one of these basic needs.
What it means for your employee retention: That your employee retention needs to be individually tailored to each employee and what matters most to them. This means extra work to discover what motivates each employee, but means you will have an individually tailored retention strategy. Here is some more information about how to implement this strategy for your business.
4. Social Exchange Theory
The short of it: Is the reward for the relationship worth the effort? Are your employees being fairly compensated for their work?
This theory argues that human behaviour is rooted in risk to reward. That social relationships are only worth maintaining if they feel there is an appropriate reward for the efforts. And when it comes to jobs, employees need fair compensation.
What it means for your employee retention: This means that you need to ensure your employees feel appropriately compensated for their work. Or they will begin to look elsewhere.
5. The Theory of Organisational Equilibrium (TOE)
The short of it: Is the effort that they give recognised and reciprocated?
Barnard-Simon’s theory is similar to the one above, but instead focuses on recognition and not just financial reward. Job satisfaction depends on how compatible an employee is with their role, the workplace, and the sense of reward they feel from their work.
What it means for your employee retention: Employee retention relies on an employee’s own sense of value and self-worth. Supporting this through recognition, financial compensation or career progression can improve employee retention.
6. The Equity Theory
The short of it: When employees are happier, they will be more productive and satisfied with their work: Staying longer.
John S. Adams argues that happy employees equal productive employees. Opposite to this, unhappy employees aren’t productive, and will eventually start to look elsewhere.
What it means for your employee retention: Employees who are happy in their job and feel they are treated with respect and are motivated are more loyal.
7. The Human Capital Theory
The short of it: Employees are more likely to stay when they are continuously invested in.
The Human Capital Theory argues that by investing in your employees with training, you will increase your “human capital”. And that by increasing this, your employees are both more likely to stay, and to be better at their jobs.
What it means for your employee retention: The more you invest in your employees and offer training and support, the better they will perform. Employees stay as long as they are feeling invested in and seeing growth.
When Your Employee Retention Strategies Fail
Of course, your employees aren’t going to stay forever. Sometimes they will leave for reasons completely out of your control.
And when that happens, you need a trusted talent acquisitions and recruitment partner. Lucky for you, we’re here to help. Here at Dynamic we work consultatively to help you solve your talent solutions issues before they arise. Look here to find out more about what we can do for your business.