10 effective employee retention strategies for 2023
With a record shortage of talent and skills and the shift towards a candidate-driven market, employee retention is more critical than ever before. Here are 10 effective strategies to help you retain the employees you already have.
It’s no surprise that employee retention is top of mind for a lot of companies right now as high turnover and a global skills shortage continue to disrupt the workplace. In fact, turnover in the UK is set to hit 41.4% this year; that’s an 8% increase since 2019.
And with the cost of employee turnover so high, it’s a problem a lot of companies are struggling to afford.
The key to minimising unwanted and expensive employee turnover? It’s your employee retention strategy. Understanding exactly what is causing your employees to stay or go—and working to actively address problem and opportunity areas—can help you create a culture that attracts and retains top talent.
Keep salaries in line with new hires
When you make a new hire, a good candidate will often be able to negotiate a better salary, putting them on a higher pay scale than current employees who are doing the same job. Bringing these employees’ pay in line with any new hires you make is a great way to show them they’re valued and means they won’t need to move to another company to increase their pay.
Create a culture employees want to be a part of
In our experience, although important, the remuneration package on offer is not the be-all and end-all for employees. And according to Glassdoor's Mission & Culture Survey 2019, over 77% of adults across four countries (the United States, the UK, France, and Germany) would consider a company's culture before applying for a job there. This is significant not only to job seekers but also to current employees. The same study found that nearly two-thirds of employees cited good company culture as one of the main reasons they elected not to leave.
Developing a great company culture will involve implementing many of the strategies on this list. It might include rewarding and recognising not just your employee's successes but also their efforts, involving your employees in creative decision-making, creating a meaningful mission for the company and focusing on employees' wellbeing.
It’s also important to ensure your company is diverse and inclusive. A workplace respecting people of all races, backgrounds, genders and sexual orientations will attract and retain a wider, more diverse and better community of talent.
You can read about how to create a good DEI policy here.
Nearly two-thirds of employees say that good company culture is one of the main reasons they elected to stay in a company.
Encourage and promote a good work-life balance
It's essential to prioritise a healthy work-life balance, not only for your employees but for yourself as well. Over the past few years, employees' perceptions of work have shifted, with people now placing a greater emphasis on achieving a better work-life balance. This shift has resulted in an increasing number of employees either seeking new jobs or rejecting opportunities due to a lack of balance.
You can foster a healthy work-life balance in several ways, including implementing remote work, flexible scheduling, or shorter workdays. Additionally, simple measures like encouraging employees to refrain from checking work emails or answering job-related questions outside of work hours can help. By respecting your employees' time away from work, you can maintain a positive working relationship with them.
Provide a collaborative environment
Another key element to employee retention is creating a strong emphasis on collaboration and teamwork. Research has shown that collaboration can have a positive impact on employee engagement and retention. When employees work together in a collaborative environment, they feel more connected to their colleagues and more invested in their work. Collaboration can also lead to a sense of shared purpose as employees work towards a common goal.
Collaboration can take many forms, from team projects to cross-functional initiatives. By fostering a culture of collaboration, employers can encourage employees to work together, share ideas, and contribute to the organisation's success. When employees feel like their contributions are valued and that they are part of a team, they are more likely to be engaged and committed to their work.
Foster growth by offering professional and personal development
Training shouldn’t stop once an employee has finished their onboarding period. A company with strong employee retention recognises the value of continuous improvement and training for their employees throughout their time with the company. In fact, retention rates rise 30-50% for companies with strong learning cultures.
Upskilling your employees by investing time and resources and providing them access to additional education and training within their field not only makes them happier and more likely to stay with your company, but also makes your company stronger as a whole.
Provide flexible working for employees
According to a recent study, over 40% of the workforce expects to work fully remotely by 2025. Since the massive shift towards working from home due to the pandemic, remote work has been shown to make employees happier and more productive in their jobs. Working from home may not be possible for some positions or industries, but when it is possible, offering it to your employees may just increase their chance of sticking around longer.
Likewise, studies show that offering other flexible working arrangements, such as flexible hours, can help companies increase their employee retention rate. Research tells us that productivity falls sharply after 50 hours per week and drops off a cliff after 55 hours. While it was traditionally thought that workaholics who are the first to arrive and last to leave are more dedicated and productive, that is not necessarily the case if much of the productivity in those hours is lost to burnout or exhaustion.
Focus on employee wellness
Well-being at work needs to be promoted as part of the culture in order to keep employee motivation and happiness high. Otherwise, you could lose your best employees not because of what you do to them but because of what you fail to do for them when it comes to caring for their wellness.
Some of these wellness programs that raise employees’ satisfaction are:
- Stress management and relaxation activities
- Mandatory lunch breaks and coffee breaks
- Healthy food options
- Fitness activities
- Flexible work hours
- Clean and safe workspaces
- Training programs
- Career advancement opportunities
- Financial rewards
- Team building programs
- Clubs and social activities
Hire for cultural fit
Many people can learn a specific skill or develop certain expertise. But not just anyone fits into an existing team nor shares the cultural values of your employees and your company. Hiring for the cultural fit can ensure long-term employee retention because these new hires will mesh well with the team quicker, making everyone more comfortable and getting productivity back on track faster. In fact, 81% of hiring managers believe that candidates are less likely to leave when working for an organisation where they are a good cultural fit.
We’re not suggesting that every hire needs to be a carbon copy of current employees but that team members share similar goals and values.
Recognise and reward employees for their hard work
Employees who feel appropriately recognised and rewarded by workplaces are much easier to retain long term, but studies also show those employees will work harder and be more productive. According to Rewards Gateway, nearly 60% of employees would prefer regular praise and thanks over a 10% pay increase with no recognition.
Make sure you are not only recognising your employees for results but also for their efforts. Sometimes projects are not as successful as we hoped, numbers are not reached, or deals are not closed. While this can be a disappointment, make sure your employees know that, though they didn’t reach the goal, their work is still appreciated. This can help encourage your employees to try harder the next time and support them when they might otherwise feel hopeless or defeated.
Close to half (46%) of UK workers are close to burnout.
Reduce employee burnout
According to the research conducted by Westfield Health, close to half (46%) of UK workers are close to burnout.
Several factors that can lead to burnout include:
- Unfair treatment at work
- Unmanageable workload
- Unclear communication from management
- Lack of manager support
- Unreasonable time pressure
Developing and improving your overall company culture, building better employee engagement and offering clear communication, consistent management, and transparency will all help reduce employee burnout. Additionally, providing wellness offerings and other perks can greatly help with employee retention.
Employee retention is incredibly important to the operation of a successful business. The strategies we’ve outlined above are not an automatic fix but part of a larger shift toward supporting and caring for employees and improving their experience in your company. The past few years have increased employees’ awareness of how valuable their time and energy are, so making sure your company is proving you value your workers’ time and energy appropriately is incredibly important.