Employee Engagement

Employee Retention Guide: The Best Strategies for Retaining Top Talent

May 28, 2021
June 23, 2022
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By 
Lyssa Test
Lattice Team

Employees come and go, but sometimes spikes or trends in employee departures can indicate larger issues at your organization. Using tools like employee surveys, interviews, and focus groups can help your HR team identify and understand what factors are pushing employees to leave, and how your business can resolve them. That way, you can keep your staff happy — and ensure that they’ll stay with your company for many years to come. 

With experts speculating that we’ll experience an impending ”turnover tsunami” in the coming months as offices reopen and employees become more optimistic about the future — and their prospects — it’s crucial for businesses to identify the top reasons their employees are unhappy and work swiftly to address them before top talent walks out the door

To help you retain your best employees, we’ve put together a comprehensive guide with everything you need to know about employee retention: why talent retention matters, the top reasons employees leave jobs, and how you can create your own highly effective employee retention strategy. Read on to learn how to invest in employee retention and keep your organization a competitive employer — now, and in the future.

What Is Employee Retention? 

Employee retention is the practice of investing in your employee experience with the intention to keep talent happy and engaged while reducing turnover. The costs of losing top talent — from hiring, recruiting, and training costs, to lost productivity — can quickly add up. One Gallup article even cited that the cost of replacing an employee can land between one-half to two times their annual salary. 

“Reducing employee turnover is critical to the success of any organization. Recruiting and onboarding a new team member is a lengthy and costly process,” said Ewelina Melon, Head of People at Tidio, a Polish company that builds live online chat tools. “It’s also a demanding process for managers and employees who not only participate in the interviews and training, but also step in to take over their [former] coworkers’ tasks at the same time. This can drastically lower the morale of the whole team.”

Investing in employee retention starts by identifying why employees are leaving your company, and then creating a strategy to address these problems and improve your overall employee experience

Top Reasons Why Employees Leave Jobs

Employees quit their jobs for all sorts of reasons, and some might be out of your business’s control. For example, an individual might leave their job to: 

  • Retire
  • Continue their education
  • Make a career change
  • Have a child 
  • Care for a family member

That said, there are some factors that push people to seek new employment opportunities that are directly connected to an individual’s experience at your company. These factors might be influenced by your company culture, values, work environment, or leadership team — all elements that fall within your company's control. Some common reasons employees become unsatisfied with their jobs and look for employment elsewhere are: 

  • Lack of career growth opportunities
  • Lack of recognition
  • Poor management
  • Uncompetitive compensation
  • Boredom
  • Burnout

“There are many reasons people leave their jobs, and most of the top reasons boil down to people being dissatisfied and disengaged with their work — or both. And, both of these are often within an organization’s control,” noted Crispina Wilson-Jones, a People operations executive at online learning and development platform Learnerbly.

While every organization will have its own unique areas that need improvement, it’s important to keep the aforementioned key factors in mind as you create an employee retention strategy; you might find that some of them exist within your own company.

How to Create an Employee Retention Strategy

In order to improve the employee experience at your organization, you need a strong employee retention strategy. Jumping right into creating new retention initiatives, while it may be tempting, will be a waste of your time, money, and effort if you don’t know exactly what issues are problematic for your workforce. 

Before you even begin crafting your retention strategy, you’ll need to do some in-depth qualitative and quantitative research to better understand what underlying issues are present in your organization. Here’s a detailed look at how you can conduct this research, and start to build an effective and efficient employee retention strategy. 

1. Measure turnover.

In order to improve employee retention at your company, you need to begin by assessing how many employees leave your company in a given time period. While there are a few different types of turnover — voluntary, involuntary, internal transfers, and new hire turnover, to name a few — you’ll want to primarily focus on voluntary turnover, or the number of people who willingly left your organization.

Here’s how to calculate voluntary turnover:

Voluntary Turnover = [ (# of voluntary departures) / (average # of employees) ] X 100

Note that the ‘average number of employees’ figure should be a company-wide number (unless you’re only calculating this rate for a specific department, in which case, adjust your numbers accordingly), and be sure to keep the time period consistent for both the numerator and denominator. 

You’ll also want to consult industry benchmarks to give added context to your calculations. This can help you understand if your rates are above, below, or in line with your competition. While you can always purchase industry-specific benchmark data sets, you can also leverage free reports from the Bureau of Labor Statistics, which provides annual turnover rates both by industry and region. Depending on how your rates are trending and how they compare to benchmark data, you might realize you need to more closely examine what could be causing your employees to leave. 

2. Survey your employees.

To better understand what underlying organizational issues could be prompting top talent to leave, you’ll want to go straight to your employees. Regular employee engagement and satisfaction surveys enable you to collect anonymous feedback on all areas of the employee experience, like salary, benefits, management, and work-life balance. This can help you identify specific areas of your organization that need to be improved. 

“Conducting regular employee satisfaction and engagement surveys is essential to employee retention. These surveys exist to help organizations gauge their employees’ satisfaction and engagement levels, and respond accordingly,” explained Wilson-Jones. 

“If they’re done right, they can also help an organization understand exactly why its employees are dissatisfied or disengaged, and what the organization can do to remedy this,” she continued. “It’s important to act on this data because the key reasons employees want to leave differ from company to company and person to person.”

While engagement survey findings can help you identify organizational, departmental, or managerial issues, they can’t tell you how to resolve those issues. In order to determine how to fix these areas for improvement, you’ll need to dive deeper into your findings with supplemental research.

3. Conduct stay and exit interviews.

Conducting exit and stay interviews can help you collect more in-depth qualitative data from your employees. Exit interviews are when you interview employees who have already turned in their resignations and are headed out the door. While it’s too late to change an employee’s mind at that point, these conversations are a useful way to understand why they’re leaving, and what elements of the employee experience they think can be improved. Usually, departing employees are more open to sharing candid feedback in these conversations because, in part, they no longer fear any potential negative repercussions for giving honest feedback. This makes exit and offboarding interviews an effective way to learn how to improve your employee experience.

You’ll also want to speak with team members who are still with your company, as their opinions will matter the most. After all, you want to ensure that your current employees are satisfied, engaged, and happy at your organization for as long as possible. Similar to exit interviews, you’ll want to ask them what could be improved at your organization, as well as what’s keeping them there. 

“Once you’ve interviewed a sufficient number of employees, attempt to find trends and recurring themes in their feedback. This data will determine your next move as a Human Resources team,” said Chelsea Stearns, Associate Director of Talent Acquisition and Employee Engagement at QinetiQ, a global engineering firm. “For example, maybe the majority of employees express dissatisfaction with pay and benefits during exit interviews. The HR team should then look to industry benchmark data and attempt to adjust [pay and benefits] accordingly in an effort to remain competitive and retain employees.”

4. Create employee focus groups.

Once you’ve identified your business’s key areas for improvement, you’ll want to discuss your proposed solutions with a panel of employees from across the organization. Small focus groups can allow you to run your ideas by the very people your initiatives will impact so you can hear their feedback and opinions and further refine your strategy. Getting their buy-in will also help you roll out any new programs and initiatives and ensure they are met with little employee opposition. 

5. Execute your strategy.

Then, all that’s left to do is run your findings and proposed solutions by your executive team. Once you have their buy-in, you can start building whatever initiatives, policies, or training programs you’ve identified will positively impact your employee experience and help your business retain more top talent.

5 Top Employee Retention Strategies 

While your survey and interview results should be strong indicators of what is working (and what’s not) at your organization, it can be useful to see what types of initiatives have helped other organizations retain talent. Here are a few of the most common strategies for retaining top talent.

1. Competitive Compensation

If your company pays under market rate, your employees might be tempted to accept a more competitive offer. To keep your employees loyal to your company, you’ll want to make sure you're offering competitive pay and benefits. Things like a competitive salary, wellness programs, healthy work-life balance, time off, telecommuting, and health benefits can help improve job satisfaction and employee morale while ensuring your company not only attracts the best employees — but also retains them.

“Look at your total rewards package. What are you currently offering and how does that compare with what other companies within your industry and location are offering? If there is too much of a discrepancy, consider making adjustments,” advised Rochele Bertasso, SHRM-SCP, HR business partner at Helpside, an HR consultancy specializing in small businesses. “Just remember — if you aren’t paying employees fairly, it typically doesn’t matter what other perks or benefits you offer.”

Compensating your employees competitively and fairly can help increase company loyalty and keep your employees from looking for a new job with another company

2. Learning and Development Programs

According to LinkedIn’s 2021 Workforce Learning Report, employees at companies with internal mobility stay almost two times longer. While companies with low mobility saw a median tenure of just 2.9 years, high-mobility businesses were able to keep talent for a median of 5.9 years. Unsurprisingly, if an individual doesn’t think they can learn and grow at your organization or feel your company is invested in their career path, odds are these top performers will take their talents elsewhere. 

“Great employees are usually great because they push themselves to keep getting better. They want opportunities to learn and develop their skills,” pointed out Bertasso. “In a small business, where career advancement opportunities may be scarce, offering professional development opportunities can give employees the growth they need to stick around.

“Consider the three E’s of development: education, experience, exposure,” she continued. “Figure out how you can help employees find internal projects and opportunities that will help them grow in each of these areas.”

While awarding raises and promotions can be an effective way to retain top talent, offering learning and development (L&D) opportunities can also help keep employees around longer. This can be through a professional learning stipend or reimbursement program that lets employees buy books, attend conferences and networking events, or take classes to learn new skills. It could also come in the form of offering internal growth opportunities, like mentorship programs, stretch assignments, high-visibility projects, and cross-functional assignments, that allow employees to learn new areas of the business and hone their skills. Investing in your employees’ career development can help your business show employees you want them to grow with your company — and that you’ll support them in doing so. 

3. Diversity and Inclusion Initiatives

While building a diverse and inclusive organization takes time, there’s no time like today to start creating a culture that helps every employee feel welcome at your company. 

Employee resource groups (ERGs) are an excellent way to bring employees together based on shared experiences, raise awareness for workplace and social equity issues, and advocate for internal awareness and change. Launching more inclusive policies, like childcare stipends and diverse hiring slate requirements, is another way to make all employees feel welcome, and using more inclusive language like “parental leave” instead of gendered language can help every individual feel supported by the company to take time to bond with their child. Additionally, offering more inclusive company holidays, or giving employees a set number of annual floating holidays, can show employees you’re mindful of their personal lives and respect their religions and backgrounds, whatever they may be.

Even the design of your office can help foster a culture of inclusion and belonging. Creating designated private spaces for nursing mothers to pump and religious employees who may need space to pray throughout the day, building gender-neutral bathrooms, and ensuring you have a variety of different types of workspaces and/or the ability to outfit workstations to make them accessible for people who require various accommodations can ensure that employees of all religions, genders, and abilities feel set up for success in your office.

4. Flexible (and Remote) Work Options

The pandemic has shown us that telecommuting works, and many employees have become used to the convenience of flexible scheduling. One study found that 80% of employees said they’d be more loyal to their current employer if it offered flexible work arrangements. Trusting and allowing your employees to set their own work schedules and get their work done when (and where) it's most convenient for them is a well sought-after perk that can help make your business a more competitive employer. 

5. Employee Recognition

Many employees leave companies because they feel undervalued or unappreciated in their roles. Ensuring each and every employee feels seen and valued at work can help improve engagement, and ultimately, retention.

“It's crucial to praise our employees for a job well done. Employee recognition can take many different forms, like a wall of fame, an internal newsletter with kudos, or a bonus for achieving monthly goals. Recognition programs help improve employee satisfaction and engagement while reducing turnover,” said Melon. Even seemingly small gestures — like giving employees handwritten notes or a shout-out in a meeting to acknowledge a win — on a regular basis can help your team feel acknowledged and appreciated.

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Every organization's employee experience is different — that’s why you must source both qualitative and quantitative data to discover where your HR team can make the biggest impact on employee retention. Once you’ve identified what underlying organizational issues are prompting your employees to leave, you can take swift action to resolve them and make your business a better place to work for all your employees. 

Of course, there will always be people coming and going at your organization, but by investing in the right areas, you can ensure that your employees have a great experience at your company, from their first day to their last.