Creating an employee retention strategy isn’t as simple as paying competitive salaries. While salaries certainly matter—43% of employees would leave their companies for even a 10% pay increase—it’s not the only factor in why employees seek change.
- These are the top three reasons employees cite for leaving their jobs, the Society for Human Resource Management found:
- 21% – Career development needs
- 13% – Work-life balance
- 11% – Behavior of managers
To develop a strong employee retention program, companies should first understand how their turnover rate compares with the rest of their industry. The U.S. Bureau of Labor Statistics tracks labor turnover and provides data by sector. The numbers can help show whether the company is generally performing better or worse than competitors with employee retention. Regardless of where you are in the journey, though, creating a formal program—and company culture—to reduce employee churn can lead to cost savings and other business benefits.
Gather data to identify problems
Some of the most important details for companies to explore are the factors contributing to turnover among their staff. Start by identifying the categories that departing employees fall into. G2 suggests asking questions such as:
- How long were people with the company before quitting?
- Are the employees quitting all coming from the same department?
- How many people quit within a certain time period compared to other times?
- Are employees leaving to work for a competitor?
This information can help you identify the factors that put your company at risk of losing more workers. These then become the high-priority issues to address with an employee retention program.
Companies can also use dual strategies—exit interviews and stay interviews—to shine a light on how they’re doing with retention. Many companies already conduct exit interviews, which focus on what the company could have done differently in order to keep the employee. Conducting stay interviews for existing employees can also generate insights into what’s working and what could be adjusted to boost retention.
Make a plan
Here are a few strategies companies can pursue to boost retention:
Start by recruiting the right workers: Up to 80% of employee turnover could be due to hiring the wrong people, according to the Harvard Business Review. Strong retention starts with hiring people who are a good fit for the company and the job role. That means evaluating their strengths and weaknesses and determining how best to support them as they join the company and take on new challenges.
Build a healthy culture: Less than one-third of employees say their company has a strong culture, according to TINYpulse. Workers want to be part of “companies that are a force for good,” as Robert Half puts it. This can include everything from promoting ethical behavior and committing to equality, diversity, and belonging to building safe, reliable products and supporting community causes.
Encourage open communication: Employees are four times more likely to stay at a company if they say their employer acts on their feedback, according to Qualtrics. Yet less than one-third of employees say their employers do so. Qualtrics also found that only 60% of employees say they have a way to offer feedback about their work experience. The takeaway: Give employees a clear, simple way to share their ideas and concerns and know that something will be done as a result.
Be transparent: Workplace communication needs to flow in both directions, but many companies still struggle to make that happen. Just 22% of employees say management at their company is transparent, according to one recent survey. Given the link between transparency in the workplace and employee happiness, proactive communication can be a key element of an employee retention program.
Provide regular reviews and recognition: Employees who say their managers consistently acknowledge their good work are five times more likely to stay in their jobs, according to Qualtrics. Only 56% of employees say their manager provides that acknowledgment. Revamping how managers provide feedback can help employees feel seen and valued.
Support growth: Nearly half of employees don’t see “sufficient opportunities for professional growth in their current positions,” according to research from TINYpulse. Give them the resources for learning and growing in their current role or exploring skills for new roles within the company through employee development programs. If an employee isn’t feeling challenged in their current position, managers should talk to them about taking on new challenges and growth opportunities.
Ensure work-life balance: Employees want to know they can have a personal life. More than half of workers say it’s very important to have a job that offers work-life balance, Gallup reports. Companies can promote this balance by enabling remote work and flexible work hours. They can also set clear boundaries around work communication during weekends and non-business hours, and ease major life transitions by providing supportive medical and family leave policies.