Employees are the lifeblood of any organization—particularly experienced employees who know your industry, customers, and processes like the back of their hand. Losing a top performer is costly for both your company culture and your bottom line.
Finding ways to improve employee retention benefits your organization on multiple levels. Retaining your best employees saves on the significant costs of turnover. It's also an indication of a healthy environment where people feel empowered to perform at their best.
Before we get into tips for increasing employee retention, let’s take a look at a few of the challenges of keeping your top talent—and the costs of failing to do so.
What is employee retention?
It’s tempting to boil employee retention down to a turnover percentage, but it’s a bit more nuanced than that. The best organizations do more than simply keep people around—they encourage their employees to thrive.
You should think about employee retention as the natural result of a healthy and supportive organization, rather than a goal that exists in a vacuum. Employees stick around when they feel fairly compensated, fulfilled by their work, recognized for their efforts, and supported by their managers, executives, and colleagues.
What are the challenges of retaining top employees?
If you want to retain more of your top employees for the long term, it’s important to understand what motivates people to change jobs. Many of the following factors are closely related to the primary drivers of employee engagement. Fall short in these areas, and the competition will scoop up your best talent with the promise of greener pastures.
Workers are more comfortable changing jobs.
For most modern workers, the days of working 40 years for the same organization are long gone. Millennials in particular are three times more likely to report changing jobs within the past year, according to research from Gallup. Particularly among younger employees, the word is out that workers receive bigger compensation increases when changing jobs than they do by sticking with the same organization.
Many employees are not engaged at work.
Poll data from Gallup shows less than one-third of workers are actively engaged in their jobs, which suggests there are many talented people simply going through the motions who may bolt for a better offer as soon as one comes along. The link between employee engagement and retention is becoming increasingly well-established as research on the topic develops.
Talented employees expect growth opportunities.
Employees become top performers when they dedicate themselves to honing their skills and progressing their career, and they expect that pattern to continue if they’re going to remain with an organization. Without an established path for career progression or adequate learning and development opportunities, your best talent may seek those things elsewhere.
Employees want to be paid what they’re worth.
If you’re posting a new job listing at a significantly higher salary than your best people are already being paid, you’re setting yourself up for resentful employees and rapid departures. As we’ll explore in more detail shortly, it’s almost always less costly to raise current employees’ salaries to market rate than it is to recruit, hire, and train somebody else.
Poor communication leads to disengagement.
Remember that frustrating feeling of asking “why” as a kid and being told “because I said so”? Poor communication can create a similar experience for employees, especially at larger organizations with more distance between workers and company leadership. When employees feel like leaders’ decision-making is out of touch with their recurring pain points, it can cause them to disengage and move on.
Employees are stressed, overworked, and burned out.
Nearly two-thirds of American adults report high levels of workplace stress, with an excessive workload cited as the top cause. Some business sectors have seen catastrophic consequences as a result. The health care industry is one of the most well-known examples, with record-high turnover among nurses, physicians, and other employees in the wake of the pandemic. It’s led to staffing shortages that cause challenges for patients and health care facilities.
What are the costs of employee turnover?
Some estimates put the average cost of recruiting and training an employee’s replacement at between six and nine months of their annual salary. For highly specialized positions that require more training, it could be even higher.
That figure doesn’t include the potential lost revenue from that employee’s relationships with your current customers, or the impact to your office culture when you lose one of your top contributors. When high-performing employees move on, many organizations are also left with knowledge gaps that can cause a domino effect of lost productivity, missed deadlines, or quality issues.
Whether you’re looking at the raw numbers or the less obvious costs of losing a valued contributor, employee turnover is a financial and cultural anchor for organizations in every industry. And while it’s not realistic to retain every talented employee for the rest of their careers, companies benefit when workers view them as a long-term solution rather than a temporary stepping stone.
7 employee retention strategies that work
Employee retention is a natural byproduct of a high-engagement workforce. According to a Gallup meta-analysis spanning decades of survey and business data, organizations with highly engaged employees have less turnover and better overall business performance.
To help your organization build a stronger company culture, here are seven employee retention strategies that can help any company keep more of their top performers for the long term.
1. Gather employee sentiments regularly
To make your employees feel supported at work, you need to understand where they’re thriving and where they could use some help. Conducting employee engagement surveys at least once a quarter helps you stay in touch with the needs of your workforce, and keeping responses anonymous encourages people to speak their minds without fear of reprisal.
Employee surveys don’t have to be long to be effective, but they do need to be used consistently. And while numerical-scale questions are great for gathering objective data, include a few open-ended responses as well so employees can express nuance or draw attention to blind spots for management.
2. Identify friction points or roadblocks
Listening to your employees is only the beginning. To create a culture that makes top performers want to stay, you need to follow up with concrete action. For enterprise-level businesses that have employees in many different departments, roles, and locations, identifying actionable steps to improve retention can be challenging.
When digging into your engagement survey results, be sure to segment by location, job title, and any other variables that could shine light on employee pain points or issues with your workplace culture. The point isn’t to assign blame but to determine where there are opportunities for improvement. That could mean ramping up staffing levels, overhauling certain processes, or offering additional leadership training for managers and other leaders.
3. Set new employees up for success
How well you integrate new employees into your current culture and train them on your systems and processes can have a drastic effect on their ability to see a future with your organization. This is even more important for industries like finance or health care, where employees often have additional layers of regulatory compliance to worry about besides the other demands of the job.
If you think your business is too busy to spend time establishing a structured onboarding program, that’s the reason you need one so badly! Making sure new hires understand their expectations and all the tools they have at their disposal gets the employer-employee relationship off to a great start. Consider checking in with a quick survey after each new employee’s first week, month, and quarter to see how they’re doing and gain insights on how you could improve your onboarding process.
4. Build a great employee recognition program
When employees know they’ll be rewarded for going above and beyond, they’re more likely to stick around and remain motivated at work. One study from Quantum Workplace found employees are 2.7 times more likely to be highly engaged when they believe they’ll be recognized for doing a great job.
You don’t have to have a massive budget to implement an effective recognition program. Simple things like staff meeting shout-outs and annual employee awards go a long way toward establishing a culture of celebrating people’s contributions. There are also some great recognition platforms available that streamline the process of rewarding employees with gift cards and other great perks.
5. Continually evaluate your compensation
Unsurprisingly, the desire to earn more is one of the top reasons people change jobs. Nothing makes an employee start sending out resumes faster than learning another company is hiring at a higher salary for the same role they’re already performing.
Be vigilant about keeping your compensation packages competitive. The market rate is what really matters here—if you find talented employees walking away due to company policies that cap pay increases at a certain percentage, you may want to reconsider whether those policies may be doing more harm than good.
6. Provide growth and development opportunities
Nobody wants to feel stuck in a dead-end role, and this is especially true for high performers who have plenty of options on the job market. Creating growth opportunities for your employees shows them you’re thinking about their future, which gives them a compelling reason to build said future with your organization.
While a title change may not be in the cards for your top people every year, there are plenty of other things you can do to encourage employee development. Start a formal mentoring program, encourage employees to cross-train between departments, or establish an annual stipend for ongoing training and education. Besides satisfying your employees’ itch for self-improvement, you’ll have the added benefit of workers who stay up to date on the latest advancements in your industry—whether that means updated regulations, emerging technologies, or anything else.
7. Offer flexible working arrangements
If you’re demanding all employees return to the office, prepare to lose some of your top talent. Workplace flexibility is one of the top reasons employees seek out new working arrangements, behind only promotions and pay raises. While there are some roles that can’t realistically be performed remotely—patient-facing health care workers, for example—companies who embrace flexibility whenever possible have happier and more loyal employees.
Contrary to popular belief in some management circles, remote workers are actually more engaged and more productive than their counterparts who work in the office full-time. Cutting out commute times and in-office distractions helps many employees achieve better work-life balance while continuing to perform at a high level. And with the right tools on your side, engaging remote employees can be intuitive and fun.
Build a culture of communication with Poll Everywhere
Especially at larger organizations, it’s easy for talented employees to feel lost in the shuffle. Finding ways to facilitate communication, connection, and accountability throughout your company creates the kind of workplace environment that retains top performers.
With robust survey-building tools, live-polling features, and a plethora of interactive Activities to make meetings, presentations, and training sessions more collaborative, Poll Everywhere is a powerful platform for elevating your office culture at scale. And with world-class security features, it’s an ideal employee engagement solution for companies that routinely deal with sensitive data.
Schedule a free demo today to learn more about how Poll Everywhere can bring your organization closer together, and create a healthier company culture that holds on to more of your top talent.