What is Employee Retention? 15 Effective Employee Retention Strategies and Examples

The global pandemic has changed how we work, where we work, and how we communicate. Companies are maintaining home office teams or offering hybrid home and office work schedules. While some of these measures may be temporary, there’s a growing consensus that this experience will forever transform how we conduct business in our digital age.

Simultaneously, it’s crucial to keep employees happy, healthy, and productive throughout this crisis and beyond. Prospective employees may scrutinize how companies showed they valued employees during difficult times. Were employees empowered, given flexibility, and treated fairly? Did your company connect and communicate effectively with them, or leave them feeling isolated?

Our list below highlights some of the best employee retention strategies to use in 2021 to keep one of your most valuable assets, your employees.

What is employee retention?

Employee retention is the effort businesses make to keep their current staff and limit employee turnover. During this time of higher unemployment and more access to available talent, you may ask, “Is employee retention still important these days?” The answer is a resounding, “Yes! It’s essential.” First, onboarding and training new staff requires resources and time. According to Gallup, the employee replacement cost can range from at least one-half to two times the employee's annual salary. Second, retaining your best employees helps you remain competitive and agile in a fast-paced, rapidly evolving marketplace. Plus, once the labor market tightens again, keeping your best employees will become increasingly difficult.

There’s no better time than now to develop employee retention strategies that increase your chances of keeping employees. Treat them well now and reap the rewards. A boost in job satisfaction results in higher productivity, improved company loyalty, and, ultimately, increased profits.

Best employee retention strategies for 2023

You can take several steps to increase employee retention, including those highlighted below.

1. Encourage taking time off

A Glassdoor survey found that Americans forfeit half of their earned vacation and paid time off. Employees are working more hours and experiencing more stress and anxiety than usual due to COVID-19. The extra responsibilities of being a parent 24/7, a teacher, an activity coordinator, and juggling a career leaves employees feeling tired and burned out. Encourage them to take vacations and use time off, even if it’s just a day to recharge. Leadership should consider publicly encouraging this while instructing managers to follow through behind the scenes.

2. Focus on value rather than time spent

We live in a culture focused on time spent on a project or deliverable versus the value it provides to a team or organization. Be flexible in the hours you require your employees to work. The time they spend is less important than their impact—ask whether they are productive and produce high-quality work.

3. Reduce meetings

Meetings held for the sake of having a meeting can slow things down in our fast-paced, digital-first world. It’s time to limit time-wasting activities and focus on getting the job done. This will help limit employee stress and discontent.

4. Be extra vigilant about respecting your employees’ time

Showing you value your employees' time conveys that you care about them and believe in fairness. Avoid assuming their office hours are expanded because remote workers don’t have to commute. Saying things like “since we have more time now” shows a lack of awareness and respect of your employees’ time and may send a message that you’re taking advantage of the situation.

5. Genuinely promote work-life balance

Many companies extol the virtues of work-life balance and support a culture that encourages and rewards this, because continually overworking employees is not conducive to employee retention or job satisfaction and leads to burnout. Encourage staff to use their vacation time, and if overtime is necessary to wrap up a project, consider incentives to make the worker feel appreciated.

6. Over-communicate the company vision for the future

As we continue to wade through uncharted waters in this pandemic, employees want to know where they stand, the company’s vision for the future, and what everyone is working towards. Over-communicate the value that employees genuinely bring to this vision. Help them feel more secure in the unknown. Continually worrying about their livelihood adds undue stress and affects productivity and morale.

7. Make returning to the office a choice

A Stanford Research study shows that employees who work from home have 50% less turnover. If your organization has had success with remote workers for the last several months, why not allow employees to continue this flexibility? Especially considering HIPAA laws, HR departments may face significant challenges in deciding who is and who isn’t allowed to continue working from home based on health and circumstances alone. Making employees who can work remotely risk exposing themselves or others to the virus and possibly putting their lives in peril may create other issues.

8. Foster positive work relationships and teams

Positive workplace relationships are essential for employee satisfaction, retention, teamwork, loyalty, and optimal productivity. Create ways to foster collaboration, including occasional team-building experiences. These activities also help combat feelings of isolation and loneliness in remote workers. In addition to face-to-face team building options, there are many virtual team building activities and games available for a remote workforce. Examples include a virtually hosted game show competition between teams and “whodunit” mysteries.

9. Communication and employee engagement

Have you ever been in an organization where employees and/or departments worked in uncommunicative silos? If so, you’ll understand why, according to a Gallup poll, 56% of somewhat disengaged and 73% of actively disengaged employees are looking for a different job. Whether it’s employee to employee, staff to management, or management to staff, foster a culture of engagement and open, two-way communication. Use online collaboration tools such as Slack, Zulip, Chanty, and Microsoft Teams to promote communication and teamwork.

10. Provide a competitive salary and benefits

Pay, perks, and benefits matter. A Glassdoor survey found that for 45% of employees who quit, the top reason was salary. Evaluate your compensation philosophy and consider conducting a salary and benefits study to determine if you offer the same as other businesses in your industry and region.

11. Ensure employees are working under the right manager

If you’ve ever asked someone why they left a job, chances are they’ll mention having a “bad” boss. It may be because the manager lacked the soft skills to motivate and encourage employees. Still, sometimes it comes down to the employee and manager not being a good match. If you have a valuable employee you want to retain, consider the suitability of the match with their manager. Make sure they are with the right manager to support their growth.

12. Hire the right people

Sure, this sounds obvious, but it’s not always easy to do if you focus primarily on hard skills during the hiring process. Employees with poor soft skills can spread negativity throughout the workforce and create a toxic work environment. Those with the wrong hard skills lack credibility. When hiring, look for job candidates who possess the right hard skills for their positions, but be sure to include soft skills, such as active listening, empathy, and collaboration.

13. Adopt a social recognition system to recognize employees

It’s no secret people want to feel appreciated, understood, and recognized for a job well done. Resist falling into the pattern of only recognizing top performers. Average-achievers also contribute and are likely a larger group than your all-stars. By adopting a social reward and recognition platform, you can make them feel appreciated in the workplace, so they’re less likely to get discouraged and quit. Even simple acts of recognition, such as giving workers a gift card to a local restaurant, treating them with respect, and telling them you appreciate them, goes a long way.

14. Be as transparent as possible

Transparency is becoming an overused word these days, but when decisions occur behind closed doors, employees feel left out, leading to discontent. Using collaborative team tools such as Slack or Microsoft Teams help build transparency, but don’t underestimate the power of adopting a genuine open-door policy to boost motivation and build trust.

15. Communicate how employee roles connect to the business mission

Everyone wants to feel like what they do matters and makes an impact. It’s not uncommon for all employees, from lower-level workers to higher-level contributors, to lose sight of this. Start by merely communicating your company’s mission and vision to your team, then articulate how each job function contributes. From time to time, show workers how their job helps fulfill a higher purpose and share stories of accomplishments, big and small, in team meetings and internal communications such as newsletters and monthly updates.

Next steps

Creating an effective employee retention strategy and developing best practices to foster the right workplace culture isn’t a one-time exercise. Evaluate your plan annually and when there are significant changes in the workplace, such as those we’re experiencing during the pandemic. Stay current on benefits and salary standards in your market, evaluate new ways to encourage employee engagement, and determine steps you can take to hire the right people or retrain existing managers to motivate others, embrace positivity, and lead by example. Upwork enables you to hire top independent professionals with the confidence of using the world’s work marketplace. Learn more at Upwork.com.

‍

Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this article. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyse and determine the tools or services that would best fit their specific needs and situation.