Table of contents
- Why are employee retention strategies important?
- 14 ideas for employee retention strategies from companies that got it right
- Transparent and ethical work culture
- New-hire orientation
- Training and development opportunities
- Competitive salaries
- Flexible work schedule
- Defined retirement benefits
- Open–door policy
- Additional benefits
- Retention bonus
- Cash and non-cash rewards
- Non-restrictive dress code
- 360-degree feedback/ multi-rater feedback
- Eldercare/childcare subsidies
- Fitness/health-related programs
- Strengthen your workforce with the right employee retention strategies
Source: Dorn Companies
Why are employee retention strategies important?
Employees look at an organization as a means of achieving their personal and professional goals. When these goals are met, employees who stay with a company for a long time contribute efficiently and become an integral part of the company and the position.
When a long-time employee leaves the company and joins a competitor, this is a double loss. First, the company will be directly affected by the loss of the employee. Second, the employee will now be contributing to the company’s competitor, and the person who replaces the outgoing employee may not be able to quickly achieve the same level of performance.
When an employee leaves the job, the organization loses not only the employee but also the customers and clients who were loyal to the employee, tacit knowledge, knowledge of current projects and competitors, and knowledge of the organization’s history. Therefore, employee retention is considered the most critical factor influencing the ability to gain and sustain a competitive advantage in the present hyper-competitive business environment.
Unfortunately, that’s not all. Take a look at the staggering costs incurred by companies when employee turnover is high and employee retention strategies are not in place.
If these numbers are ringing the alarm bell for you, you’re reading the right blog post. Below, we explore 14 fool-proof employee retention strategies.
14 ideas for employee retention strategies from companies that got it right
Transparent and ethical work culture
There’s a saying that honesty is the best policy. Having a transparent culture is one way to ensure you can attract and retain talents. In addition, it boosts employee engagement as employees develop a greater sense of purpose and work satisfaction when there’s trust.
Ethics affect organizations in many ways. An unethical environment affects employees through workplace stress, decreases job satisfaction and performance, and leads to high turnover. When employees find they don’t fit within the organization they selected, they will leave. When the bottom line reflects high costs and low organizational productivity, management looks for ways to reduce the costs. Organizational ethics encompass good conduct and equitable and fair treatment for everyone.
Patagonia, an American outdoor clothing company, altered its supply chain to ensure it was environmentally friendly and provided safe working conditions. Furthermore, Patagonia provides excellent health insurance and gives its employees paid paternity and maternity leave. As a result, Patagonia has built a solid reputation for being environmentally friendly and ethical in its sourcing. This positive reputation not only strengthens the Patagonia brand and gives conscientious customers more incentives to buy but also motivates employees to stay with the organization.
Two things, employee induction and orientation, both introduce a newly hired employee to the company’s policies, hierarchy, and job responsibilities. Induction creates the first impression and perception of the company in an employee’s mind. Orientation is a way of welcoming new employees and making them comfortable in the organization.
A well-disciplined orientation program significantly improves employee job satisfaction and shapes employees’ attitudes and perceptions towards the job and the organization.
New hires at DigitalOcean are greeted with a balloon at their desk, a handwritten welcome note, a bottle of champagne, and some DigitalOcean merchandise. The company also provides a clear, thought-out plan for an employee’s first 90 days so the employee knows what to expect and how to begin.
Training and development opportunities
As the pace of digital transformation accelerates, the life cycle of technologies and products has become shorter. Updating competencies and skills has become essential for both organizations and employees themselves. As a result, companies invest a lot of money and resources in upgrading employees’ skills and competencies.
Interviewing people helps HR managers understand if there’s a growing willingness among employees to get continuous training to upgrade their skills and occupy higher positions in the organization. As a result, organizations offer different training and development programs to help employees learn, develop, grow, and remain competitive in the job market.
Chick-fil-A, a chain of fast-food restaurants, believes their employees should understand what they do and why it matters. The Chick-fil-A employee retention strategy includes offering employees a warm work environment along with opportunities to develop leadership qualities.
What is the difference between upskilling, reskilling and cross-skilling?
Read the difference between the concepts of upskilling, reskilling, and cross-skilling to understand the significant distinctions between the three and the benefits it brings to the employees.
Studies have confirmed that a competitive salary has a significant impact on employee retention. A competitive salary is a salary at or above what competitors pay for similar jobs in the same market or geographical area.
To keep up with offering appropriate compensation to employees, HR leaders should regularly conduct salary reviews for all positions. Keeping salaries transparent is equally crucial so that employees can trust the organization and are assured of fair pay.
To adjust for the increasing cost of living, respond to the job-hopping mindset among some employees, and account for increasing competition, it’s essential for HR leaders to review employees’ compensation packages often to retain employees within the organization.
Buffer, a social media management company, made salaries entirely public in 2013 to live up to its core value of transparency.
Flexible work schedule
More employers are introducing flexible working arrangements as part of a work-life balance policy to attract, recruit, and retain highly qualified staff. Enabling employees to choose their work schedule makes employees feel that the employer cares about their well-being and personal life, which leads to increased satisfaction with the job and the organization, resulting in a greater commitment to work and employee retention.
DuckDuckGo’s international workforce is trusted to “work wherever, whenever” to get the job done. The company uses multiple online tools to keep all its employees in the loop.
Defined retirement benefits
A defined retirement plan provides employees with a guaranteed income in retirement. How much a retired employee will receive each month is determined by factors such as the years the employee worked for the company and career earnings.
Such an approach can be used as an essential tool to retain employees, as there’s a significant opportunity cost to employees who leave the organization early. A retirement plan is designed to be more generous for those who work longer at the company, as the annual pension of those employees will be higher.
Citigroup, a global banking company, offers an inspiring benefits package as part of their employee retention strategy. Citigroup employees are eligible to contribute to their 401K on their first day at Citi. In most cases, they are eligible for matching contributions after they have worked at Citi for one year. Citi also provides a fixed contribution of up to 2% of eligible pay if employees meet specific requirements.
An open-door policy means top managers’ doors are open to every employee. The purpose is to encourage open communication, feedback, and discussion about important issues. An open-door policy is typically designed to create an environment in which employees feel they can express any question or concern without fear.
Keka, an HR payroll software company, uses its open-door policy literally and figuratively, allowing teams to frequently communicate in person or virtually. Keka’s policy applies across various levels and departments so that anyone can raise concerns to any relevant party.
There are several additional benefits an organization can offer their employees to motivate them to stay longer. Examples of additional benefits as part of an employee retention strategy include:
- Competitive vacation/holiday benefits and paid personal time off. When employees take a paid vacation, both the employer and the employee benefit. Vacation and relaxation make employees think positively, improving productivity and creativity.
- Tuition allowance. Tuition allowance or tuition reimbursement is a powerful employee retention tool. In a tuition-assistance program, an employer pays all or part of an employee’s cost to attend professional courses to develop skills and competencies. Tuition assistance helps employers build employee loyalty and employee retention.
- Sabbaticals. Sabbaticals can be used for training or studies or for other purposes such as relaxing to heal from job burnout, developing new skills by taking a course or training, traveling to different parts of the world, exploring new cultures and places, or volunteering for anything. Mentioning sabbaticals as a perk your company provides may not only retain employees but also motivate them to stick with your company for the long term.
Campbell’s perks include 100% healthcare coverage, and on-site fitness centers. Also, as a food company, healthy meal options in the cafeteria are subsidized, and healthy cooking lessons are available. Campbell’s also aims to make life easier for employees who are parents, providing daycare centers, a full kindergarten, after-school programs for kids up to age 12, and a lactation room for nursing mothers.
A retention bonus is an incentive offered to employees to stay with the organization for a certain amount of time. In other words, an employee retention bonus is a payment or reward offered as an incentive to keep a key employee on the job during a crucial time in order to benefit from their expertise and experience to manage ongoing business issues.
Banfield Pet Hospital offers employee retention benefits to employees who have stayed with the hospital for a long term and have acquired deep knowledge of the company’s products, processes, and culture.
Cash and non-cash rewards
Bonuses can be a helpful employee retention strategy and motivation tool. These rewards can motivate and retain employees while also being cost-effective for organizations. Managers can also use spot rewards as a sign of recognition and appreciation of behaviors they want from employees in the future.
Non-cash rewards are non-monetary rewards that can consist of tickets for a vacation, a hotel stay, fitness center membership, and so on.
Google realized a big difference in how people view monetary and non-monetary rewards. They tested a program to offer generous cash rewards to their top performers. The program was a failure, as Google discovered it resulted in jealousy and resentment among employees.
Then Google started a new rewards program that offered experiences, dinners, new devices, and international travel. Employees responded very positively to the non-cash reward system.
Non-restrictive dress code
In a casual workplace, jeans are everyday attire, and shirts with or without collars are the norm. In most modern organizations such as Google, men rarely wear ties and long-sleeve full-collar shirts. Google claims they have no dress code at all, and employees are free to wear sweatpants if they choose. Many other big companies, including Apple and Facebook, have switched to a casual dress code.
Traditionally, people have believed that dressing formally will help employees perform better and have better work ethics and a proactive mindset. However, younger generations have a contradictory approach, as they see Mark Zuckerberg, the CEO of Facebook, in a casual T-shirt and jeans and believe the way they dress does not define their productivity or success.
Presently, employees believe that being comfortable will make you more relaxed, leading to a focus on achieving goals at work.
360-degree feedback/ multi-rater feedback
360-degree feedback is a method that allows employees to receive performance feedback from their superiors or managers, peers, subordinates, co-workers, and also customers. In addition, it allows everyone to understand how different people perceive them as an employee and how others view their effectiveness as an employee, co-worker, or staff member.
IKEA provides their managers with the coaching abilities and performance management tools to complement their present management style and extend their management and leadership competencies.
For many employees, especially women with children, childcare is perceived as the most valuable benefit. Furthermore, when employees are faced with a problematic elder care situation, they’re in a time of crisis. As a result, they’re not necessarily focused or making the best decisions — at home or at work.
Prudential Financial, a financial services firm, provides parents with daycare discounts and hours of subsidized backup care per year. In addition, some of the firm’s offices have childcare facilities, on-site fitness centers, and wellness clinics. They even provide leave for new moms as well as for parents who have recently adopted.
Most employees consider health insurance an essential component of their compensation package, and the absence of this benefit will undoubtedly upset them. Also, employees at many companies spend long hours sitting at their desks. Such inactivity combined with working under pressure and stress can have harmful effects, including health problems such as high blood pressure, heart disease, obesity, and diabetes.
While it is the responsibility of employees to look after their own health, as an employer, a company should promote physical fitness by investing in a corporate gym or offering membership in fitness centers. The long-term benefits of such an investment might outweigh the initial cost, as experts say that a healthy body is a healthy mind. If employees are healthy, it will indeed have a positive influence on their productivity and performance.
The Motley Fool an investment publication, offers various health-related perks, from free spinning classes and fitness boot camps to in-house massages. In addition, the Chief Wellness Fool, Sam Whiteside, loves promoting employee wellness and encourages collaboration in the office. As a result, employees get free personal training sessions and wellness consultations.
Strengthen your workforce with the right employee retention strategies
One of the most significant challenges for today’s businesses is achieving a sustainable competitive edge in the international market. As a result, companies spend a lot to stay competitive and often face a shortage of highly skilled employees.
Employee retention is a matter of concern for companies, and the quality of a company’s workforce can determine the organization’s health. Therefore, it’s essential for companies to execute the right strategies that motivate employees to stay and continue working with them.
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