Companies put a great deal of money and effort into recruiting, hiring, and onboarding top-tier talent at all levels of the organization, and when a company’s best employees leave, it’s often a significant loss. Not to mention, it costs more to hire and train new employees than it does to retain your existing workforce.
There are several widely recognized drivers of employee retention, from having a sense of work-life balance to feeling valued and that their work is meaningful. Engaged employees are less likely to leave, and they’re also more productive, making it a win-win for both companies and their employees. Strategies like leveraging behavioral analytics to help your employees succeed can contribute to employees having a greater sense of accomplishment, and strategies such as making smarter hiring decisions and fostering work-life balance help to cultivate a positive company culture that, in turn, helps to improve employee retention.
To learn more about the most effective strategies for improving employee retention and why these strategies prove successful for many companies that implement them, we reached out to a panel of business leaders and a few HR professionals and asked them to answer this question:
“What’s the most effective employee retention strategy (and why does it work so well)?”
Meet Our Panel of Business Leaders:
Keep reading to learn what our panel had to say about the most effective employee retention strategies and why they’re so successful.
Jason Brown, MBA is the Founder & CEO of ApprovedCosts.com.
“Hire the best candidate from the beginning…”
Do not envision that your new hire has a 50% chance of walking out the door. If you hire the right person at the start, you’ll have a 100% guarantee that they’ll be staying. If you hire someone who’s a bad fit for your organization, you’ll end up firing them or they’ll end up leaving.
Make sure that they’re informed during your hiring process. A poor onboarding process will create a negative foundation for your employees. Your new hires will have a harder time acclimating, while their co-workers will have difficulties in cooperating.
Make sure that you’re honest about what you want from your new hire. You also have to ensure that they have the skills and experience for the job. Encourage honesty during interviews and do your research. Transparency is the key to having the most effective retention strategy.
Thomas Franklin is the founder of Triangle IP. His practice focuses on aggressive patent prosecution and strategic portfolio management for high-tech companies in the electronics, software, fintech, health tech, ed tech, and cleantech fields.
“After a certain period, employees are not as motivated by salary as they are motivated by rewards and recognition…”
The strategy is pretty simple. Inculcate a habit within the organization to appreciate each other’s work. Send sincere emails and offer gift cards, a short skill-building course, or a sudden team lunch. Make it about them.
Go a step further and formalize incentive systems and rewards. It works because we all want to feel like we’re appreciated and that we belong.
Yvonne Morriss is the Co-Founder and CEO at IP ToolWorks. She has worked dynamically across topics spanning detailed market analysis, strategic planning, and creative content creation.
“Your employees will want to work with you if they know others are talking about you for good reasons…”
Ensure people in your domain and industry are saying positive things about you. No matter how big or small your firm is, keep your firm involved in charity and local community events. Show how your employees are impacting the world on a larger scale. Sometimes employees have concerns that are beyond the dollars.
Building your brand will help with employee retention because people want to associate themselves with a good cause.
Antonio Wedral is the co-founder of an award-winning e-commerce startup, NOVOS, based in London that has helped 100+ global e-commerce brands grow. He often contributes articles about e-commerce, company culture, and entrepreneurship.
“I think one of the most effective employee retention strategies is to…”
Have a positive company culture that provides a healthy working environment and a good work-life balance. It works well because workers increasingly become conscious of the employee well-being policies that a company offers. According to a recent survey, mental health tops the list of employee concerns in 2021.
Julian Goldie is the CEO of Goldie Agency.
“Be transparent and open…”
Establishing open lines of contact between staff and management will aid in the development of a sense of belonging and common interest. Daily meetings where workers can share thoughts and ask questions, as well as ‘open-door policies’ that allow employees to talk openly with their employers, make employees feel respected and understood. I still make my personal network of former employees, acquaintances, and networking connections accessible to any other employee who wishes to network and communicate with people from other businesses and industries. I set them up to converse with one another, then I leave them alone. I believe I can express a sense of confidence without being present, allowing workers and fellow leaders to learn and develop from others outside my business.
Furqan Aziz is the Founder & CEO of InvoZone.
“The best way to retain your employees is to understand and bond with them…”
Many organizations fail to recognize the benefits and potential of bonding with their employees. Management should not consider employees as mere employees; rather, having open communication should be encouraged. I am the CEO of a leading IT company, and I know the importance of open communication. To maintain that, I have shared a meeting calendar openly with my team members so that they can book a meeting with me anytime they want in case of any trouble or even for a virtual cup of coffee. At times, I call or DM my employees to ask about their work and any feedback. These gestures lead to a friendly work environment and also make employees feel valued.
Ben Heinkel is the Co-founder at Ethical Clothing and was previously Co-founder and CTO of a venture-backed startup, Photoslurp, based in Barcelona, Spain. He is a serial entrepreneur, having started and grown multiple startups in both the B2B and B2C spaces.
“In my experience, the most effective strategy for employee retention is to…”
Ensure your employees’ dreams and goals are unearthed, taken into consideration, and aligned with those of the company. It’s important for your employees to see a clear career growth path within your company and understand what is required of them to advance on this path.
Other ambitions and strengths outside of those that make it onto a CV are important to take into consideration as well, ensuring that the responsibilities delegated to them align with these as much as possible. Especially with younger and less experienced people, helping them see how they can achieve their goals within your organization goes a long way in ensuring your employees’ happiness.
To ensure all of this happens, regular one-on-ones are an extremely useful tool not only to align your team but also to get to know what drives your employees and how you can best enable them to do their best work at your company.
Kristine Daub is the Founding Editor and Owner of byCurated. They assist other artists and crafters in finding and perfecting their outlets. They also proudly assist their readers in establishing strong brands, so that they can begin turning their passion to profit!
“Identify the right people from the start…”
There are a ton of staff retention strategies that can be implemented once your team has been onboarded, but one of the most effective strategies to minimize employee turnover is to be incredibly selective during the hiring process.
If, for example, you have two candidates — one who boasts significant experience and one who shows a keen interest in your company mission — the smarter hire may be the one who better aligns with your company mission.
Onboarding a team that sees and strives for your end goal means that your team is more likely to stay than those who are simply looking for a 9-5 paycheck.
Brian Turner is the Chief Technology Officer at ConvertBinary.
“The most effective employee retention strategy is to offer a clear path to progression…”
One of the leading causes of employee burnout and turnover is a lack of direction. If employees feel as though their work is purposeless, they’re a lot less likely to find satisfaction in their work, and they won’t stick around for very long. The end result is that they pursue something that they feel produces a greater impact. To reduce employee turnover, the first step is to show employees that their work matters. Show gratitude for the effort that they put in and make sure that employees know how far their input has taken the company.
In conjunction with this, make it clear how their output impacts their path to progression. People rarely want to work in the same role for their entire working lives. Progression is incredibly important, and employees need to know if they’re on track to the next stage of their career. Set some specific, measurable, and attainable goals for each of your employees to achieve in order for them to take greater responsibility within the company.
Put simply, this works well because it gives your team independent personal targets to strive towards. Humans are goal-oriented creatures, and they want to know that they’re well on their way to achieving their personal goals as well as the wider goals of the company. By showing gratitude and offering a path to progression, your employee retention strategy will produce significantly stronger results.
Carlos Castelán is a Managing Partner and founder of The Navio Group, a business consulting firm that advises companies on hiring, retention, engagement, improving workplace and productivity challenges, and helping them perform better and succeed in today’s competitive business environment.
“One of the biggest challenges companies face today relates to the hiring and retention of employees…”
The pace of technological advancements has accelerated change in all industries, and companies that succeed in adapting and growing have a common theme: engagement and retention of top talent. Retaining employees will be critical for businesses to be successful in 2021, and the key to keeping your best employees is to keep them engaged.
When employees are engaged, they are ‘all in.’ Whether it’s a project or a company goal, engaged employees believe their time, work, and effort are rewarding. When employees are engaged and have a sense of meaning in their work, they become more committed to the company they work for and have a greater drive for producing results.
Perhaps the most important — yet often overlooked — strategy that companies employ is setting a clear vision for employees which provides an understanding of why a team’s work is valuable. Furthermore, they set clear goals to help individuals focus on work — and have autonomy — in pursuit of the company’s vision.
Reinforcing the vision and goals through regular communication, both as a team and one-to-one, helps employees remember how their work furthers the organization’s mission and increases engagement by making the work feel meaningful. Communicating a clear vision and goals to employees allows them to understand how their work fits into the bigger picture and assures them that their work is important and meaningful.
Finally, an important consideration for companies seeking to retain top talent in high-demand areas like tech is to get ahead of poaching from competitors by identifying top talent and sharing that evaluation. From there, managers can have regular conversations about the larger company vision and work, as well as the unique opportunities that exist for that employee due to their talent.
A few ways to do this are to identify high visibility special assignments or projects, rotating the employee to other areas, mentorship with top execs, and, of course, ensuring faster promotions and raises. If you’re trying to convince an employee to stay, chances are it’s probably too late, so it’s important to make them feel valued and that they can have a future at the company that helps both the company and employee achieve their goals.
It’s easier to retain star employees than to try to replace them. So, providing meaningful work is key to engagement, productivity, and employee retention.
Devin Schumacher is the Founder of SERP.
“Conduct exit interviews…”
An exit interview is a short interview held with an employee before they leave your company. While formulating an employee retention strategy is a sound idea, it won’t go too far if you don’t listen to past employees and gather insights as to why they decided to move on with their careers. It’s a valuable opportunity for the former employee to share the best and worst elements of their role, as well as their overall job satisfaction and how they interpret the direction of the company.
It cannot be overstated how useful these insights are. Done properly, every former employee should inform your retention strategy going forward to optimize your workforce and reduce your turnover rate. They know better than any online resource or book about where you could do better in the future because they were a part of your team and experienced the culture first-hand. This is a long-term process, but it’s one of the most effective in getting to the root of internal inadequacies and providing a better experience for everyone.
Deborah Sweeney is the CEO of MyCorporation.com.
“As a small business owner, I find that the most effective employee retention strategy is to…”
Provide employees with opportunities for growth and advancement within the company.
Emphasize that you want to see employees thrive within the business and that growth in their roles matters for their overall success. Check in with employees regularly to talk about opportunities for growth in and out of their department. Get an understanding of what they are looking to do next and how you can help them reach the next step.
Stefan is a SaaS Entrepreneur and the Founder of the world’s safest software for LinkedIn automation, Expandi.io.
“One of the best ways to retain employees is by offering flex-time…”
Especially now that everyone is working remotely. Some of the key benefits of flex-time include:
- It’s THE preferred perk. Flex-time is one of the cheapest perks companies can offer to their employees. And they love it! According to some statistics, flex-time is among the top three preferred employee benefits, along with raises and career advancement.
- Greater work-life balance. Employees who work on flex-time are happier and have a greater sense of work-life balance than those who work on a fixed schedule.
- Flex-time boosts productivity. Not every employee has the same preferences or working styles. Some of them love to work in the morning hours, while others are more productive later in the day. Flex-time allows employees to start working when they feel most productive.
- Flex-time cuts medical costs too. Studies have shown that employees on flex-time report lower stress levels and decreased burnout compared to those who work on a fixed schedule.
In short, introducing flex-time is one of the best strategies that businesses can use to retain employees. With flex-time, employees can manage their tasks better without sacrificing the quality of their work. It also gives them a greater sense of freedom, which makes them happier and more productive at work.
Jenna Carson is the HR Director at Music Grotto.
“Our employee retention strategy has lots of different aspects to it, but the key part of the strategy that makes all the difference is…”
Creating a culture that ensures staff have the best work-life balance possible.
We started this by shifting rewards to be based on staff output. When we train managers, we let them know to not expect after-hours support from staff and to encourage their staff to take time off. Recently, we also started the internal promotion of hobby and team events to cement our company culture as something that celebrates much more than just work.
People need to know that their organization knows they have lives outside of work, and when an employee thrives outside of the office, we find they tend to thrive inside the office too. In our annual employee surveys, staff always mention that they want to stay with us because they know we respect them. For us, this is a strategy that we will never let go of.
Dave is the Founder and Director of ConvertedClick, a digital marketing company that helps businesses cement online success. As a digital entrepreneur, Dave aims to transform the online landscape through his expertise. He’s a sucker for innovation and creativity with an emphasis on creating meaningful relationships in business.
“Compassionate care and healthcare benefits do wonders for employee retention…”
Through the shifting sands of the pandemic, employees have been highly worried about their health. Plus, the transition to remote work has been challenging too. By offering care and support, you instill in them a sense that you value their presence, and this motivates them to contribute better to the growth of the company. Similarly, healthcare benefits can provide them with the financial cushion and relief they need. This gives them enough reasons to stay and helps you retain more employees effectively.
Corina Onet is the Founder of Chef’s Pencil, an online food magazine. She’s built and managed large teams for over a decade as an Operations Manager for a Fortune 1000 company.
“I find that the best retention strategy comes down to a great hiring strategy…”
First thing first, the basics need to be covered (e.g., adequate pay, respectful and fair treatment, adequate stress levels); otherwise, people will leave regardless of your retention strategy.
When you hire, you need to have a long-term plan for your employees and think hard about how and if they fit well into it. People have very different personalities and career expectations. You just don’t hire a bunch of overachievers in a team that has few advancement opportunities. They will not stick around for long. You also don’t want to hire people that are not a great fit for your organizational culture in the hope that they will adapt. Some will, but many won’t.
These are extreme examples, but many hiring decisions are made with a short-term thinking approach. Managers think about the first 3-12 months of employment. Then they hope things will somehow work out, and many times they won’t because the underlying problem is simply insurmountable. So, a great retention strategy starts with a great hiring strategy in which hiring managers have devised a long-term career plan for their staff and are putting a lot of effort into weeding out people who are not a great fit culturally.
Jesse Russell, PhD
Jesse Russell, PhD, is the President of Big Picture Research and Consulting. He provides accurate, reliable, fair, and actionable data science services. He uses data science, research & evaluation, data storytelling, and machine learning to discover and share real-world insights, democratize data, build coalitions, evaluate fairness and equity, and create real-world business value. He has a PhD in comparative systems analysis from the University of California Santa Barbara.
“The most effective employee retention strategy is goal cascading…”
With goal cascading, each employee understands how their own work is valuable in helping the organization meet its goals. Cascading goals work by setting the overall company vision and mission, setting strategic goals based on the vision and mission. Then, each business unit sets goals for their area that feed into the strategic goals.
When each business unit meets its goals, the company’s strategic goals move forward. Then, cascading, each group within the unit sets goals for itself that will help advance the unit goals. And finally, each employee works with her or his supervisor to set individual goals that will help the group achieve its goals.
In this way, each employee can see how their own work helps achieve their personal goals, which help achieve the group goals, which then move unit goals forward, and those help achieve the company strategic goals, which finally are meaningful for the organization’s vision and mission. With cascading goals, each employee’s work is invested in the overall vision and mission. It becomes clear how each employee is valuable for how they help achieve the vision and mission.
Stephanie Stewart, SHRM-CP
Stephanie joined Reconciled as their Human Resources Director in 2017. After spending a year in the role of Administrative Assistant, she transitioned to HR & Recruiting. She loves being a support to the staff of Reconciled It. Stephanie works remotely in her hometown of Columbia, SC. She stays busy keeping up with her two elementary-aged kiddos, enjoying a good book and a sweet iced tea.
“Our organization strives to have clear growth and advancement opportunities for our employees…”
So, when they start as a bookkeeper, they know they can grow into senior positions, management roles, our tax department, or specialize in accounting cleanup. It is important to our organization to always be learning and growing. Our staff stays more engaged, and we have higher retention by providing opportunities for them to do so.
Michael Alexis is the CEO of Team Building. TeamBuilding has 100+ employees. They run team-building events for clients like Apple, Amazon, Google, Johnson & Johnson, Netflix, Chipotle, and many others.
“My #1 recommendation for employee retention is to give your people more than they ask for…”
A clear example is with negotiations. For example, if an employee asks for a 5% raise, and you can find a way to give them 10%, then it’s a big win. This approach of going above and beyond creates a massive amount of trust with your people, which is something that will keep them working with you for a very long time.
This aspect doesn’t have to be about money or a specific event like a negotiation. Think about how you can give more than expected with flexibility, career growth, team dynamics, and more. If you do this consistently, you will be light years ahead with retention.
A writer, business owner, creative, and attorney by trade, Erin helps clients globally create the worlds they want to live in by working with businesses, charities, institutions, and movement leaders to form structures, documents, and business models that reflect their values, dreams, purpose, and mission. This is all done through focus, healing, tools, community, and education.
“The best strategy is to be crystal clear on the North Star of the organization…”
And being able to tie that back to employees’ personal values and mission. People want to see themselves reflected in the work they do. They want to know they’re making a contribution. Too often, businesses leave this up to personal thought and time while focusing development and supervisor meetings on the more “objective” and impersonal. Instead, businesses need to work directly with employees to connect those dots clearly. I need to know that I’m not a cog and instead understand how the business is so much better off because I’m here.
One manifestation of this was a session I did where we showed the board and staff how to integrate their passions, hobbies, and interests into the work they were doing for the organization. They were reenergized and excited. Splitting ourselves at the front door is exhausting, and why would I leave when I’m so personally invested and literally “tied up” and into the work I’m doing? I’m more likely to stay. And now that I’m being seen as a person, I’m more likely to contribute. I’m more likely to take a personal interest, develop a voice, and make suggestions for improvement, and this is where innovation comes from. This is where outstanding customer service (internal and external) comes from. This all is especially important for the upcoming generation, where personal satisfaction outweighs salary in some instances.
Max Harland is the CEO of Dentaly, one of the largest dental health resources in the world. As a business leader, he operates with a constant aim to bring an influential change in society. Plus, with a keen eye for positive relationships, he’s a sucker for compassion and care.
“Active listening is a great strategy to sketch a meaningful bond with your employees…”
It’s a fact that COVID-19 has induced a visible void in communication, and employees have been facing all kinds of issues. Being an active listener helps you spot these pain points and offer workable solutions. This goes a long way in cementing trust and helps you evolve as an employer of choice. Plus, it contributes to a culture where everyone is well-heard and valued. Employees love being pampered, and when you lend an ear with positive intent, it surely helps them form a favorable impression that makes them want to stay.
Jeff Harry shows individuals and companies how to tap into their true selves and to feel their happiest and most fulfilled — all by playing. Jeff has worked with Google, Microsoft, Southwest Airlines, Adobe, the NFL, Amazon, and Facebook, helping their staff to infuse more play into the day-to-day. Jeff is an international speaker who has presented at conferences such as INBOUND, SXSW, and Australia’s Pausefest, showing audiences how major issues in the workplace can be solved using play.
“Identify your staff’s Zone of Genius…”
Studies show staff is 500% more productive when working from a state of flow, which reduces burnout. Doing the work that makes them come alive boosts morale and dramatically reduces turnover. Also, having your staff doing their flow work can dramatically benefit the organization, as seen in the Google 20% Rule. Google staff were given 1/5 of their time to pursue their curiosity as long as it benefited Google. Innovations that came from this program include Adsense, Google Meet, & Gmail.
Another suggestion is to identify your staff’s language of appreciation (i.e., gifts, words of affirmation, acts of service, etc.). Understanding the motivations of your staff will be crucial to building trust, and when staff feels appreciated, turnover reduces considerably.
Roy Ferman is the founder & CEO of Seek Capital. Roy has led Seek Capital from incubation to the market leader in startup business funding, having funded in excess of $400 million to startup business owners. Prior to founding Seek Capital, Roy was the CEO of Breakthrough Ads, a digital ad agency specializing in SMB focused verticals. Roy has worked with SMB financing since 2010 and continues to expand the offerings of Seek Capital.
“Remain organized and in control where the job is concerned…”
A big morale killer for employees can be a lack of stable leadership and order. Work closely on the details of your operations so employees are never stressed or taking on the job as a burden.
Darren Litt is the Co-Founder of Hiya Health. They’re on a mission to reimagine children’s health and end our collective addiction to sugar by creating a sugar-free, junk-free multivitamin delivered on a pediatrician-approved schedule.
“With employee retention, three key elements come to mind…”
Hire smart, foster a supportive environment, and validate your employees. Sometimes businesses onboard people too soon out of desperation. When you don’t take the time to ensure that who you add to the team is the best fit, this leads to trouble down the road. Trying to make it work leads to frustration for both the hire and you.
Next, be fully present in interaction with your employees. Listen carefully for cues that they need support and follow up accordingly. For example, if during a meeting you think an employee is overwhelmed or bothered by something, follow up with them one-on-one to talk through solutions. Lastly, recognize them for their contributions. In a remote work environment, it’s a challenge to keep your teams engaged and connected. Simple acts of encouragement and validation remind workers that what they do for the team matters.
Eric Gist is the CEO of Awesome OS. Eric has been in the sales and customer service space for over 25 years and has worked with clients such as MetLife, Merrill Lynch, AT&T, Manpower, Farmers Insurance, Aon, and Amgen on sales and service transformation initiatives. Eric was a partner at the global consulting firm Accenture where he had operational responsibility for Accenture’s Customer Relationship Management practice. His work included optimizing customer service and sales force performance, conducting service and sales capability benchmarking, and integrating sales, service, and marketing processes.
“Communicating effectively helps employee retention…”
Keeping open lines of communication is important because you want employees to feel like they are in a safe space to open up and bring in new ideas, along with sharing their concerns. Being honest with them and sharing feedback that will help them improve in their position allows the job to be less stagnant and allows for them to grow by sharing the improvements needed in their performance. Rather than meeting with employees once every quarter, schedule something to happen more often on a regular basis so it can keep the line of communication open.
For over 20 years, Shaun Price has been producing noteworthy work in digital, direct-to-consumer businesses in the health adjacent space. He has led groundbreaking digital transformations for large corporates and helped found successful insur-tech startups before becoming interested in the health-tech industry. Shaun joined MitoQ in March 2019 as the Head of Customer Acquisition, during which time he’s helped achieve annual growth of over 50% and e-commerce growth over 300%.
“HR managers can use big data to learn why employees leave, thus gaining insight on how to better increase employee retention…”
This is the biggest trend I predict for HR and big data because it will help both with employee retention and with improving company culture, which is a major driver of HR policy change. Big data will help HR become better at connecting the dots behind human behavioral patterns and predict employee loss before it even occurs, giving managers the ability to step in and solve the problem before losing talent. The future of employee retention is in data-backed research and learning.
Ewelina Melon is the Head of People and Culture at Tidio Chatbots. A pragmatic startupper and quality-focused professional, she’s a recruiter by profession.
“In our hectic world, people place a significantly higher value on their mental and physical well-being…”
Thus, the #1 employee retention strategy is ensuring a good work-life balance in the company. From the first day to the notice day, it is crucial to show employees that hustle culture is not your company’s culture. Expecting staff to work long after the end of the workday, pull all-nighters to finish a project, and be available to drop by the office over the weekend is the antidote to good employee retention. People get tired, burnt out, and eventually leave.
Since the beginning of the pandemic, we have paid particular attention to our staff’s work-life balance. A good idea was to introduce a hybrid working model where every employee chooses if they want to work from home or go to the office. Additionally, we now have entirely flexible working hours. It’s vital to trust your employees and give them the freedom of choice. This change was especially appreciated by parents juggling school schedules, interns still at university, night owls, and many other employees. People are wired differently, and companies need to keep this in mind.
There are many things a company can do to ensure the staff are well-rested and efficient at work. Encouraging employees to use their days off, building a culture of trust and mutual support, having quality time together off work, and good company-wide time management to avoid burning deadlines… All these things make you more of a top employer in the eyes of your staff and job seekers. Healthy and happy employees are the best and the only secret to retention.
Improving employee retention is challenging in highly competitive industries where top-tier employees have ample opportunities to advance their careers. Workforce analytics solutions like Humanyze provide business leaders and human resources professionals with valuable insights into the key drivers of motivation, productivity, and employee retention. Understanding what makes your employees tick is the best way to make data-driven decisions to boost employee engagement, satisfaction, and retention.