18 Practical Employee Retention Strategies to Keep Your Employees Committed

Now, imagine a scenario where you landed your dream job. The office is bustling with energy, and every day feels like undertaking a new adventure. But with time, the initial excitement starts waning. You suddenly start wondering if there is more to work than just the paycheck and the free coffee you get. This reflection has hit many as this steadily contributed to what is known as "The Great Resignation.” This is where countless professionals started seeking meaningful roles.

Then, you witness a sudden shift in your company where it has started valuing trust and autonomy. This change seems more promising than before, where you feel empowered to make decisions and contribute meaningfully. Now, this is what we call "The Great Stay". It is a period where you do not simply work for a paycheck but want to associate with a culture that values you, your growth, and trusts you.

So, why not join me in this venture of discovering how we can make today’s employees stay? Let us explore the underlying issues that make employees leave, the cost borne by the company, and how you can make a difference by investing your time in effective employee retention strategies.

The Cost of Employee Turnover

Your understanding of the cost of turnover might just be the tip of the iceberg, which is limited to the tangible cost. However, the impact a turnover can have on companies is far beyond the tangible aspects, shaking the company's core. Let’s understand the costs involved in detail:

Certain costs are quantifiable, like the tangible costs mentioned above. After an employee leaves, recruiting a replacement will bear expenses on advertising for the position, interviewing, and onboarding. Training a new hire will incur additional expenses covering training materials, which could have been used elsewhere.

There is another category of cost, the intangible one, which is more qualitative than quantitative. A rise in turnover tends to pull down the productivity levels, given the existing employees are swamped with workloads until the vacancy is filled. This lowers employees’ morale, pushing them to reconsider their current roles, influencing them to leave, and increasing the turnover toll. In this way, the company traps itself in a vicious turnover cycle.

Do you know that a rise in turnover also has the power to tarnish your company’s brand reputation? Potential employees and customers perceive high turnover as a sign of a hostile work environment and poor management. This becomes a major turn-off for top talent from joining your organization and impacts customer perceptions and experience.

In service industries, for instance, frequent changes in staff can disrupt customer relationships, leading to a decline in service quality and impacting customer satisfaction and loyalty.

Why Employees Leave?

Before we even plunge into retention strategies, you must first understand why employees are leaving the organization in the first place. There can be several underlying issues that meet the eye. Interestingly, exit interviews help decipher valuable insights into how the employees perceive your company, highlighting the issues bothering them. This can help you determine where you need improvement in retention strategies.

The following are the key reasons which compel employees to leave:

• Dissatisfaction with the compensation
• Struggle with long hours and inflexible schedules
• Limited opportunities for career advancements
• Lack of recognition and rewards
• Lack of support from management
• Disconnection from work or the company’s mission.
• Poor company culture
• Inadequate perks and benefits
• Overwork and burnout
• Employee well-being is neglected.
• Receiving attractive offers from other companies
• Personal life changes due to relocation or family needs.

18 Employee Retention Strategies

1. Onboarding and Orientation

Onboarding is the first step in giving your employees an insight into your organization. The orientation program, a key component of the onboarding process, should clearly communicate the policies and expectations of the employees from the beginning and provide a glimpse into the company culture.

Furthermore, orientation programs help employees understand how to contribute and excel in their roles. This helps in shaping a positive first impression.

2. Fair Compensation

Who doesn’t want fair compensation? Everyone strives to receive a fair and competitive salary for the efforts put forth. If you want to earn your employees’ commitment and loyalty, your aim should be to ensure fair compensation. Here’s how organizations can approach this effectively:

• Regularly benchmark salaries against industry and regional standards to ensure competitive pay scales.
• Introduce a transparent pay policy where employees get clarity on how their compensation is structured and how moving forward their performance can influence their earnings.
• This transparency helps build trust and leaves no room for misunderstanding behind pay decisions.

2. Diversity and Inclusion

Strive to create a workplace that identifies and respects people from all backgrounds and sexual orientations. There are ways through which you can promote diversity and inclusion in the workplace. They are as follows:

• Provide diversity and inclusion training
• Implement fair and inclusive hiring practices
• Encourage dialogue about diversity.
• Strive for diverse leadership representation.
• Celebrate diversity through events and recognition.

4. Work-Life Balance and Flexibility

Flexible work arrangements have become one of the top things people look for in a new job. They have become an expectation rather than a benefit.

In today’s hustling world, employees do not simply seek financial rewards but aim for a balanced lifestyle, allowing them to cater to their personal and professional requirements. Here’s how you can ensure flexibility and work-life balance for your employees.

• Offering hybrid and remote work options and compressed workweeks allows employees to manage personal and professional schedules, leading to less burnout and increased job satisfaction. Flexible and generous time-off policies also contribute to employee well-being and retention, allowing employees to recharge.

• “Right to disconnect” laws are the need of the hour. Its implementation gives employees the right to disengage from work-related communications beyond office hours, keeping burnout at bay.

5. Recognizing & Rewarding Employees

The most effective way to ignite employees’ motivation is to acknowledge their hard work and achievements. Regularly recognizing and rewarding their contribution will validate their work and make them feel valued. A simple thank you note, public recognition at meetings, and practicing peer-to-peer recognition are some forms of appreciation.

With the exponential rise of digitization, recognition and rewarding platforms have made the entire process easily accessible and smooth. These platforms allow incorporating gamification, which makes the process more engaging and fun. This can include elements like point systems, leaderboards, and badges for achieving specific milestones.

Also, the AI-driven recognition system can help you personalize the recognition and reward process by allowing you to customize or tailor rewards aligning with employees’ preferences. This approach ensures that recognition is meaningful and relevant to the individual, increasing its impact.

6. Perks and Benefits

A blend of perks and benefits packages can significantly address employees’ diverse needs and influence employee retention. Here are some strategic perks and benefits that can enhance employee satisfaction and loyalty:

• Offer financial counseling and retirement benefits.
• Provision of parental leave and childcare assistance, covering on-site daycare or financial subsidies.
• Support ongoing education through tuition reimbursement and access to professional development resources.
• Offer health insurance and support fertility benefits such as IVF assistance or adoption subsidies.
• Other unique lifestyle perks include free meals, transportation credits, and regular team-building events.

Recommended Resource: Unlock the Best 15 Employee Perks in the US Companies

7. Employee Wellness & Mental Health Initiatives

Who wouldn’t wish to associate with companies that prioritize employees’ well-being? I would happily stay with such an organization. Recognizing the importance of employee well-being and mental health goes beyond moral responsibility; it's a strategic investment. Comprehensive wellness programs are increasingly recognized as a key factor in boosting retention, enhancing productivity, and improving overall workplace morale. Here’s how you can ensure employees’ well-being.

• Implement wellness programs that address both physical and mental health to show employees they are valued beyond their job performance.
• Using wellness platforms will give employees access to resources and challenges to enhance their well-being.
• Investing in wellness programs often results in a significant return on investment through reduced healthcare costs, fewer sick days, and lower turnover rates.
• You can incorporate wellness programs such as health screenings and health risk assessments, access to gym memberships and fitness centers, counseling services, and stress management workshops, set incentives against wellness challenges, and include mindfulness and resilience training.

8. Celebrate Employee Tenure with Service Yearbook

Source: Vantage Rewards

A service yearbook is an excellent way to acknowledge your long-term employees for their years of service. It is an excellent addition to your company culture, helping to create meaningful employee experiences. A positive employee experience results in higher engagement, ultimately impacting talent retention.

9. ESOPs (Employee Stock Ownership Program)

ESOPs (Employee Stock Ownership Program) is an excellent way to compensate your employees as a bonus or incentive. Allowing employees to become your company's stakeholders helps them stay invested in its performance.

While ESOPs provide liquidity benefits for employers, they may not be ideal during the time when the company undergoes a struggle. In such situations, employees might perceive ownership as a burden rather than a motivation.

Some other versions of employee stock ownership include the Phantom Stock Plan, stock appreciation rights, and direct purchase plans. These plans offer alternative approaches to aligning employee incentives with company success.

While ESOPs can be a powerful tool for incentivizing employees and promoting company loyalty. However, carefully considering the company's financial health and employee sentiment is essential in determining the most suitable compensation strategy.

10. Sabbatical Programs

Never underestimate the potential of Sabbatical programs in retaining top talents. It shows that you appreciate your long-term employees' hard work and service. The company's leave policy states that sabbatical leaves can last six weeks or more.

Employees can benefit a lot from sabbatical leave. They get a chance to develop new skills and work on their passion project. Some are just happy to spend quality time with their loved ones.

You can also organize a mental week off for your remote employees, if not for a month.

It is found that employees come back much more motivated and refreshed after a good long break.

11. Profit-sharing Plan

A profit-sharing plan is used by employers to distribute a portion of a business's profits to employees.

When employees are given a piece of the pie, they're more motivated to go the extra mile.

A profit-sharing plan is a great way for organizations to share profits with employees meaningfully. It can help retain valuable talent, incentivizing people to work harder and better over the long term.

12. Encouraging Open Communication

You can foster an environment where employees are unafraid to voice their opinions. In other words, they need a workplace where they can freely express their ideas and concerns.

An “open-door policy” is one of the most effective communication strategies to establish a culture of transparency and trust. It shows that you're always available to listen to their opinion.

13. Practicing a Feedback Culture

There’s feedback on the work. There’s feedback on the individual’s performance. And there’s feedback on how the individual’s doing in their career.
– Shell M Phelps

Regular feedback and suggestions can help you stay connected with your employees. You must empathize with your workers and keep a check on them. This helps you to get the pulse of your workforce.

Communicate as often as possible. Ask them what work challenges they are facing. Create a comfortable space where employees feel safe to express themselves freely without any hesitation.

This will increase their loyalty and trust in your leadership style and company.

14. Shaping their Growth and Development

One of the most crucial employee retention strategies is helping employees achieve their short-term and long-term goals. It shows that you are invested in their future just as they are. Given that millennials and Gen-Z workers are dominating the job scenario, they are more inclined to work for organizations that promise them growth and development.

Therefore, in-house corporate training programs should be designed to ensure that every employee gets access to regular training and online courses to enhance their skills. Also, encourage them to attend conferences, industry events, etc., to give them broader exposure.

15. Engaging in CSR Programs

Reports show that millennials and Gen-Z workers are more inclined towards social responsibility. They believe in giving back to the community. Especially in times like this, people value empathy.

Contributing to society and helping those in need are feel-good factors. It inspires loyalty and engagement in your people. A CSR initiative where the workers can contribute their participation is an excellent employee retention idea. It will go a long way in creating effective employee engagement.

Since physical team activities are impossible, virtual CSR activities are a much more workable option. You can organize activities such as virtual charity bingo. There are also some activities that you can do individually or remotely, such as planting trees, cooking for a cause, donating to the suffering communities, etc.

It fosters a sense of fulfillment and team bonding.

16. Bonding with Employees

People don’t leave jobs, they leave bad bosses.
– Marcus Buckingham

A good manager works continuously to nurture their relationship with the team members. Above all, bonding with employees outside work is as important as inside the office.

Team lunches, group treks, and excursions are ways to celebrate employees. Celebrating their achievements- a new house, marriage- will deepen your bond.

17. Initiating a Mentor/Buddy Culture

Most people don’t like to be micro-managed. Most people don’t want to be managed at all!

Clint Pulver is the founder and president of the Center for Employee Retention. He believes in leadership that helps, encourages, and supports their employees. In his book "I love it here," he tells us how mentorship over old-school management techniques is better. And how it can totally transform an average employee into a high performer.

Assigning a mentor or a buddy to a new employee is also a great onboarding idea. The newcomer can learn about their work and the existing techniques from his mentor. Moreover, a new employee can offer a fresh take on things. As a result, this will help generate creative and innovative ideas.

18. Virtual Team-Building Activities

Working in a virtual environment can be difficult for some employees. While you might think working from home or other remote locations would appeal to all workers. However, the ability to work virtually, like in an office setting, is not for everyone.

As a result, most remote employees feel isolated from their co-workers. They can't fully immerse themselves in the company's culture. Thus, virtual team building becomes necessary and often plays an important role in talent retention.

Management should carry out these activities to improve group processes and interactions and increase employee engagement and morale. It also develops better working relationships between employees.

Conclusion

Now that you're aware of the costs associated with turnover and understand why employees leave, you are more than ready to invest in retaining your employees.

The retention strategies discussed above will help you nurture a culture for employees that will make them thrive and commit to your organization for the long term.

FAQs

How to determine which employee retention strategies are best suited for my organization?

To determine the best retention strategies, you can do the following:

• Assess your organization's culture,
• Gather feedback from employees,
• Analyze turnover data and consider industry best practices,
• Tailor your approach to address specific challenges and priorities within your workforce.

How can I measure the effectiveness of employee retention strategies?

You can measure effectiveness by tracking metrics such as turnover rates, employee satisfaction scores, engagement levels, performance indicators, and feedback from exit interviews or surveys.

Author bio: This article is written by Riha Jaishi, a content marketing professional at Vantage Circle specializing in recognition and rewards. As she draws from her years of experience in employee recognition and rewards, she continues weaving narratives through her thought-provoking blog posts. For any related queries, contact editor@vantagecircle.com