Easy Guide to Employee Retention: Strategies,Tips

Keeping top talent can be tough in the best of times.

But the last few years have been anything but that. We’ve seen pandemic hiring sprees to major tech layoffs and experienced everything in between.

Despite the chaos, it’s clear that top talent remains a hot commodity. In a world where top-performing employees are in high demand, it’s important to not only look at how to attract the best candidates – but to keep your existing team from jumping ship as well.

Enter employee retention.

But what exactly is employee retention and why does it matter.

Keep reading as we explore the ins and outs of employee retention. We’ll break down everything you need to know, plus we’ll cover top tips and strategies for keeping your existing team happy, engaged, and motivated.

What is employee retention?

Put simply, employee retention is a measure of how well the company can keep its employees.
Retention rate as a metric specifically measures the percentage of employees that stay at your company over a period of time.

But employee retention is about more than just employee turnover. Low (or dropping) retention rates are usually a red flag that there are other issues when it comes to your organization’s talent pool.

Why is employee retention important?

On the surface, employee retention may not seem like a critical business metric. There’s often the sentiment that one employee can simply be replaced with another. But most people leaders know that simply isn’t true. In fact, losing key team members can have a major negative impact.

Yes, in some cases you may be able to replace an employee with a new hire. But over the last few years, competition has been fierce for top talent. So replacing high-performing employees can be challenging.

Even where you can find suitable new hires, high employee turnover, and constant hiring can be extremely expensive – impacting the company’s bottom line. But more importantly, low employee retention is often the symptom of a larger issue at hand.
Employee retention can be impacted by a wide range of factors, like employee satisfaction, company culture, low employee engagement, and much more. So, when employee retention starts to drop, it’s usually time to take a deep dive into your organizational health.

Benefits of employee retention

Employee retention is one metric that can pay off in spades. It keeps you from losing key team members and helps you maintain productivity and efficiency.

With a host of direct and indirect benefits, it’s no surprise that the most successful companies prioritize employee retention.

Lower talent acquisition costs

The more employees that leave your company, the more resources you need to replace them. Acquiring the right talent can be time-consuming and costly.
Not only do you need to factor in the costs of hiring and talent acquisition, but there are also the costs related to training and getting new employees up to speed. Plus, any additional onboarding costs.

Some employee turnover is inevitable, but if employees stay at your organization longer – you’re likely to save on hiring costs in the long run.

Improved employee morale and company culture.

Teams that work together longer have better chances of building a rapport, which creates a sense of belonging and purpose. This camaraderie helps contribute to a better team culture and boost employee motivation. This bond can be difficult to build if your team is a revolving door.

Employees that stay with a company longer are also more likely to be familiar with company culture and values. This makes it easier for your team to create a culture of teamwork.

High rates of retention can also give employees a sense of security and stability. When this isn’t present, employees can feel a lack of job security, which can increase stress and decrease morale among teams.

Better productivity

The longer you stay with a company, the more familiar you become with the brand and your job. You’ve taken the time to understand the basics and are able to develop habits and processes that make you better at your responsibilities. This helps you be a better performer and improve your productivity.

A company that is constantly replacing employees loses out on this benefit. While you may luck out with someone of a very similar skill set, some role-specific knowledge can only be built up over time.

Plus, long-term employees tend to be happier and more engaged – all of which play a role in employee productivity. So it’s a win-win all around.

Stronger employer brand reputation

Let’s be honest – employees talk.

Whether they talk online in forums or with people they know, poor employer brands can spread like wildfire. This also applies to organizations with strong employer brand reputations.

Employees are often aware that low retention rates are reflective of other issues, like work-life balance or poor management. This means candidates will be wary of brands with reputations for high employee turnover and low employee retention – making it difficult to attract top talent. It can also impact your company’s ability to work with other companies and businesses.
On the other hand, employers with positive reputations are likely to maintain a competitive advantage over other companies.

Key causes for high employee turnover

Employee retention is key to the success of any business.

But in order to help employees stay, it’s important to understand what causes employees to jump ship in the first place.

Management issues

People don’t leave companies, they leave bosses.

Poor management is one of the top reasons employees experience job dissatisfaction and choose to resign. This can include direct managers but also company management as a whole.

Employees can leave managers for a wide range of reasons including:

●       Micromanagement: Employees don’t feel trusted or that they have the freedom to perform at their best

●       Lack of support: They feel their direct manager isn’t providing them the support they need to be successful.

●       Low recognition: Employees feel under-appreciated for their contributions to the organization or don’t feel their work has an impact.

Poor management can be a major issue when it comes to employee frustration, which can quickly manifest in low retention rates.

Lack of growth opportunities

Most employees aspire for growth and development in their roles – whether they’re taking on more senior roles and responsibilities or simply being provided with new challenges and learning opportunities.
Without growth opportunities, employees can feel stuck and bored.
If there isn’t a clear trajectory for growth and career advancement, employees may look for greener pastures and eventually leave your organization.

Inadequate compensation and benefits

While not the be-all-end-all, total compensation plays a huge role when it comes to employee satisfaction.

If employees aren’t satisfied with their total compensation and benefits, they can feel undervalued and unsatisfied with your company as a whole. They’re also more likely to be enticed by competing offers.

Inadequate compensation not only makes it challenging to retain current talent but attract new talent as well.

Burnout and lack of work-life balance

The last few years have made it clear that work-life balance is a top priority for employees. Long work hours, high-stress environments, and lack of flexible work options just aren’t cutting it.

If your employees feel like work is encroaching on their personal life, they’re more likely to feel unhappy with their job and seek alternatives.

Tips for improving employee retention through job satisfaction

It’s not uncommon for companies to struggle with employee turnover. Fortunately, there are many ways to get employee retention back on track.

But it all boils down to one thing – job satisfaction. If employees are happy and satisfied with their job, they’re more likely to stay put.

Here are some tips for improving employee retention among your teams.

Create a positive work culture

A positive and supportive work environment can make a huge difference when it comes to employee retention. You can foster a better team culture in many ways, including:

●       Outlining clear company mission and values

●       Encouraging teamwork and collaboration

●       Creating a culture of celebration

Recognize and reward good performance

Employees want to feel valued. They want to know that the large amounts of time they dedicate each week to work are making an impact.

Taking the time to show appreciation and recognition for a job well done can go a long way in improving motivation.

Employee recognition can be done through formal programs, like rewards programs or performance reviews.

But they don’t have to be complicated. Even simple peer-to-peer recognition or simple thank you notes can make a difference in your team’s morale.

Provide opportunities for professional development

Leaders often think employees want to do the bare minimum, but this isn’t true. In fact, employees want to improve their performance!

Offering opportunities for growth and professional development can help employees stay invested in their roles and your company. This can include training programs, mentorship opportunities, or even just outlining career paths.

This can improve overall employee performance by equipping them with new skills, but also support your employee retention initiatives.

Offer competitive compensation and benefits

Money talks.

Sometimes employee retention simply boils down to the numbers. By offering compensation that’s in line with industry standards and other employers, you can keep your team happier.

When looking at compensation, companies should look at a few different factors:

●       Is compensation in line with other organizations in similar locations and industries?

●       Is compensation reflective of the role and responsibilities? 

Employee benefits, like healthcare, flexible working arrangements, and other perks can also help offset monetary compensation.

Encourage employee feedback

When it comes to keeping employees around, one of the best things you can do is go straight to the source. Ask your employees what matters to them. Whether it’s a town hall or a survey, it’s an easy way to identify areas of improvement.

By listening to their feedback, you can target your actions and retention tactics to the things that will make the biggest impact.

Plus, by taking their opinions into consideration, you’re showing your team that their feedback is valued. Which, in and of itself, can help improve employee morale and motivation.

How to measure employee retention

One of the first steps toward improving employee retention is understanding how to measure it. Fortunately, measuring employee retention as a metric is actually very straightforward.

Let’s break it down.

Let’s say you’re looking to calculate your company’s annual retention rate: Take the number of employees who stayed with your company for the last year and divide it by the number of employees at the beginning of that year.

For example, if you started the year with 100 employees, but 85 of them are still with your company a year later, your annual retention rate is 85%.

However, as we’ve established, retention rate only tells one side of the story. It’s important not to look at employee retention in a vacuum.

There are some other metrics you should consider when it comes to employee satisfaction and retention.

●       Turnover rate: This is essentially the opposite of the retention rate. It tells you the percentage of employees who have left within a period.

●       Employee satisfaction: Consider measuring your employee’s overall satisfaction and engagement levels. If you’re experiencing low levels of employee satisfaction, it’s likely that low employee retention rates aren’t far behind.

●       Employee absenteeism: High rates of absent employees may also be an indicator of low motivation and job satisfaction.

●       Employee net promoter score (eNPS): Like a customer NPS, this is a measure of if your employees are likely to recommend your company as an employer. Low eNPS scores can also be a sign of employee dissatisfaction and can also be a sign that your employer brand is at risk.

Boost your employee retention with Evergreen

Improving employee retention isn’t always a quick fix. Unlike many metrics, employee retention reflects many facets of your organization.

But to get your retention rates up, it’s important to start with areas that will make the biggest impact. 

The easiest place to start? Creating a culture of employee and peer recognition.

Evergreen makes employee recognition a breeze, helping teams give kudos in just a few clicks.

Featuring integrations for top workspaces like Slack and Teams, Evergreen makes peer-to-peer recognition a seamless part of your team’s workflow. Track your progress with extensive reporting so you can see the impact! We’ll even plant a tree for every kudos sent by your team – good for your team and good for the world.

See the impact for yourself. Get started with a free 14-day trial of Evergreen today.

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