Employee retention refers to the capacity of an organization to retain its employees and therefore reduce turnover.
What Are Examples of Employee Retention Strategies?
Organizations retain employees by fostering a positive work environment, promoting engagement, showing appreciation, and providing competitive conditions. Common employee retention strategies include:
- Having a strong onboarding process;
- Creating mentorship programs;
- Giving competitive compensation;
- Offering perks such as flexible schedules and additional days off;
- Promoting constructive and positive communication;
- Giving feedback on performance;
- Having a recognition and reward program;
- Fostering strong relationships.
Why Is Employee Retention Important?
Employees are the main driving force of many organizations. Employee retention is therefore crucial to both productivity and efficiency. High employee turnover also has a negative impact on employee motivation and leads to additional expenses.
Common benefits of maintaining high employee retention include:
- Lowering recruitment expenses;
- Improving productivity;
- Maintaining better customer service;
- Improving employee engagement and satisfaction.
How To Calculate the Employee Retention Rate?
To calculate a company’s employee retention rate, the following formula can be used:
Total workforce at the end of a given period ÷ (Total workforce at the beginning of the given period + new hires) X 100
For example, a company currently has 25 employees. At the beginning of the year, it had 30 employees. Its employee retention rate is, therefore, 83.3% (25 ÷ 30 x 100 = 83.3).
What Are the Causes of Low Employee Retention Rates?
Common reasons for low employee retention rates include:
- Lack of career opportunity and growth;
- Highly competitive job market for specialized positions;
- Poor work conditions;
- Inadequate salaries;
- Lack of management leadership.
How To Improve Employee Retention?
Strategies to improve employee retention include:
- Conducting exit interviews
- Improving the recruitment process
- Making employee well-being a priority
- Installing a healthy, pleasant working atmosphere
- Improving employees’ working conditions
- Offering employees more flexibility
- Increasing salaries
- Offering more skills development
- Promoting internal mobility
- Improving the onboarding process
- Giving employees greater recognition for their work
- Creating a strong corporate culture
Why Use Employee Retention Strategies?
Setting up employee retention strategies allows companies to deal with labor shortages.
Organizations that invest in employee retention have more success reducing costs related to the recruitment and training of new employees. Companies with loyal employees usually have a good employer brand and face fewer difficulties with recruitment.
What Are the Factors to Improve Employee Retention?
The factors to improve employee retention include:
- The type of positions available within a company, and their challenges
- The support offered to employees
- The quality of the training provided
- The opportunity to access skills development plans
- A recognition culture
- A sense of belonging;
- The organizational culture
What Are the 5 Aspects of Employee Retention?
Employee retention primarily revolves around 5 aspects:
- The environment: a positive work environment is beneficial to ensure employee retention;
- The culture: a strong company culture attracts and motivates employees;
- The employee benefits: employees are looking for benefits that go beyond their salary when working for a company;
- The professional development: employers need to support the professional goals of their employees in order to retain them;
- The recognition: proper recognition helps to boost the engagement and happiness of employees.