Employee retention is a simple, yet effective method of keeping your best employees by making them happy, satisfied, and most importantly, engaged. The better your employee retention strategies, the better off your employee retention rate will be.
If you’re looking for better ways to retain employees, we’ve got you covered with our list of 17 borderline genius employee retention strategies.
Continue reading to learn more about the importance of employee retention, or jump straight to the list.
What is Employee Retention?
Employee retention is a company’s ability, and the efforts taken by the human resources department, to keep its employees encouraged, satisfied, and with the company.
Employee Retention Rate
The employee retention rate is the percentage of employee retention. Use the following formula to calculate your employee retention rate:
Number of employees retained for an entire time period/number of employees at the beginning of that time period X 100
Employee Retention Strategies
Employee retention strategies are ways to increase a company’s employee retention rate. These strategies can be monetary, culture-based, team-based, etc. They increase motivation, productivity, efficiency, and loyalty, which, ultimately, translates into creation of positive employee experience and growth for the company.
Employee retention strategies are what make the difference between employees actively working towards company goals, or constantly on the hunt for a new job.
How Student Loan Repayment Benefits Boost Employee Retention
One strategy that will have a positive impact on your ability to make your employees stay is to offer an employee benefit that is in demand.
Right now, an employer paying student loans is a perk that is high up on the priority list for many millennial employees.
As a matter of fact, a survey was conducted in which responses from 1000 millennials were recorded.
Over 50% of them stated that when applying for a job, they would take a reduced salary just to access this perk.
To help facilitate this benefit, the State has amended the Employer Participation in Repayment Act so that contributions from employers towards qualified education loans are not considered taxable.
In order to manage it, employers partner with companies like FutureFuel.io.
This is a student loan repayment company that regulates contributions that you make towards your employees’ student loans.
The company boasts software that manages all employee student loan information under one single platform.
Partnering with FutureFuel.io to enable employees to reclaim their financial liberty is a solid strategy that improves your ability to retain your employees.
In the same survey, close to 90% of respondents claimed that they would continue working for you for an additional five years if you offered them this perk.
Why is Employee Retention Important?
It takes time, money, and valuable resources to train an employee according to your company’s rules and processes, and that training turns into positive growth when the employee starts operating at their full potential.
The importance of employee retention can be summed up to the following points:
- Employee retention ensures that the talent stays in your company and willingly puts in their best effort.
- It ensures that critical employees don’t leave in times you need them the most.
- Allows the company to function smoothly without an abrupt need for more resources.
- It ensures that your employees feel valued, which, in turn, makes them more productive, efficient, and motivated.
Benefits of Employee Retention
Here is a table that compares the differences between companies that implement employee retention strategies, and those that don’t:
|COMPANIES WITH RETENTION STRATEGIES||COMPANIES WITHOUT RETENTION STRATEGIES|
|Improved employee morale, productivity, and efficiency.||Disengaged employees with mediocre performances.|
|Little to no turnover hassle.||High turnover rate which leads to wasted time and resources.|
|Reduced costs in the long-run and a higher profit for the company.||Increased costs and lower profit which stunts growth.|
|Reduced time spent on talent acquisition and training.||More time is spent on recruiting and training since new employees keep coming in.|
|Better customer experience since employees will be experienced with the target market of the company.||New employees may not be able to provide the necessary customer experience due to a lack of experience with them.|
In today’s world, it’s no secret that people usually tend to quit their managers, not their jobs. Creative employee retention strategies ensure that employees are happy with their company, as well as, their manager(s), and their team.
Furthermore, employees you successfully retain will always be more productive and motivated to get things done.
Without further ado, here are 17 creative and engaging employee retention strategies that will allow you to keep your amazing team happy.
1. Above-Market Salary
It’s always smart to offer your employees an above-market salary. It’s bound to instill a sense of achievement and accomplishment in their minds.
In order to decide on such a salary:
- Conduct research on your competitors and how much they pay their employees for the same jobs.
- Surf recruitment websites like Glassdoor, LinkedIn, etc. to get a better idea.
- Once you have an average salary, increase it by 5% or more (depending on your financial standing).
- Offer it with a yearly increment greater than what is being offered in the market (preferably 15%).
This will ensure that your employees don’t look towards other opportunities in hopes of a better salary.
Furthermore, being well-paid is also an extremely powerful motivating factor that creates a culture of ‘giving back’ to the company in the form of dedicated work.
2. Culture of Profit-Sharing
Develop a commission-based system, or opt for a profit-sharing system where employees get a share of the company profits through sales, jobs completed, etc.
For example, you might set up a certain sales target – for every sale above the target, you share half the profit with your employees.
To develop a profit-sharing system:
- Analyze your company’s sales process or how it completes jobs.
- Begin delegating equal opportunities to every employee.
- Set sales and job completion targets.
- Set an acceptable profit-sharing rate.
- Develop a system where the longer an employee stays with the company, the greater their profit-sharing rate is.
As a result, employees will be motivated to work hard to reach major increments, then remain dedicated in order to retain the payouts.
3. Options in Bonuses
The more options an employee has with their bonuses, the happier they’ll be.
Rather than providing the same bonuses to all of your employees, provide several bonus options to choose from.
Here are a few ways you can go about doing this:
- Divide two big bonuses into smaller ones over a shorter period of time.
- Combine all bonuses into one big bonus.
- Convert the bonuses into a customized vacation.
- Have no bonus, but instead divide the amount into increments in monthly salaries.
- Allow employees to trade bonuses for further perks.
In today’s competitive landscape, you need to take extra steps to impress your employees. An employee with multiple options at their current job will think twice before going job hunting.
4. Chronological Benefits
As employees become more inclined towards better benefits than higher salaries, you have the option of increasing the company’s retention rate by implementing smarter employee benefits.
For example, between a job with more benefits and low pay, and a job with high pay and less benefits, nowadays, people would rather choose the former.
In fact, 48% of employees consider perks like student loan assistance when choosing a job.
In order to implement better employee benefits:
- Conduct a company survey, research on benefits competitors offer, or one-on-one interviews with employees to determine preferences or preferred benefits.
- Devise flexible benefits plans to accommodate all types of employees.
- Develop a system of chronological benefits where the longer an employee works for you, the more (and better) benefits they get.
- Keep your benefits open and give your employees the option of requesting custom benefits in place of existing ones.
Employees tend to overlook minor inconveniences in a company if they’re receiving good benefits.
Furthermore, employees are bound to be happier, more motivated, and energized when receiving great pay & benefits from a good company.
5. Thorough Recruitment
This next point emphasizes on implementing a solid recruitment and talent acquisition process.
You need to properly vet potential recruits and make sure they are cut out for the job, especially in high-pressure settings.
For a thorough recruitment process:
- Analyze your working environment, conditions, and team to develop an employee persona.
- When recruiting, assess and test prospects according to that persona. Carefully assess their character, previous experience, skills, their ability to work under pressure, etc.
- You should also take into consideration how a prospect would fit in with your company culture.
- If everything checks out, hire them immediately.
Solidifying a recruitment process based on the specific needs of your company, while revolving around your company culture, will lead to the acquisition of talented employees who will stick around for longer.
6. Culture of Onboarding
Onboarding is the process of acclimatizing new employees to the work environment, the culture, the business model, and the people of a company.
Like all strategies, onboarding needs to be done right or it will produce negative results, i.e., improper onboarding can make employees leave in under six months.
Here’s how you can immediately accustom an employee to your company the right way:
- On a new employees first day, provide them with an orientation, a ‘Welcome’ brochure, and introduce them to the team.
- Commit them to well-crafted team-building activities.
- Familiarize them with all processes, any tools the company uses, and what an average day for them will consist of.
- Provide them with minor responsibilities from the get-go.
- If possible, give them a project and make them lead it (it can be a mock project but the employee shouldn’t know that).
It’s imperative to let the employees develop their process (while adhering to general company rules). You never know, their process could be better for you and the company.
7. Build Careers
Whenever you need to make new hires, don’t consider it as finding someone to fill a role, rather an opportunity to build someone’s career.
When a new employee is brought onboard, don’t expect them to know everything. They might come from different backgrounds, a different company culture, or may not be accustomed to the way you work.
To help your employees turn into experts in their fields:
- Provide employees with training material, courses, and mentoring (at a level they’re comfortable with) when you hire them.
- Help them through their ‘curriculum’ and provide options to complete more courses (and attain more certifications), as they complete them.
- Provide them with feedback on their work and insights/tips on how they can improve.
- Help them learn new skills that go beyond their job description.
- Most importantly, put newfound knowledge to the test with real projects, tasks, or responsibilities.
When you build your employees careers, you gain respect from them. Ultimately, employees will not only be getting paid for their services, but also training, learning, and improving their skill sets and career trajectories – for free.
Such opportunities are seldom found in the job industry, making it an excellent retaining technique.
8. Provide Ideal Working Conditions
Good working conditions are necessary if you want your employees to stay healthy and productive. However, great working conditions go beyond just providing a clean office and a pantry full of healthy snacks.
Here are some working conditions to consider for a happy employee:
- An ambient working environment and strong team synergy.
- No unnecessary overtime and weekends off.
- On-site entertainment options and the best equipment/tools for work.
- Different seating arrangements to choose from, i.e., standing desks, cubicles, couches, etc.
A healthy work-life balance isn’t just about encouraging employees to take care of things at home, but about ensuring their time spent at work is stress-free.
You can also invest in systems and processes that automate and/or streamline the workflow of employees (Agile, DevOps, etc.), so your employees never feel overworked.
9. Vehicle and Appliances’ Financing Co-Payments
Another effective retention strategy is to provide employees with the option to secure partial (or full) payments for financing vehicles, as well as, consumer electronics and gadgets (smartphones, home appliances, etc.).
To develop a system of co-payments:
- Provide employees with the option of no-interest loans or develop a payment system.
- Provide them with different options to pay back like cutting a small part of their salary every month, deducting the amount from the next bonus, etc.
- Try not to limit the number of payments they can apply for.
This ensures that your employees are not restricted from buying what they want.
If your employees consistently use this option, you’ve successfully retained them for the time period.
10. Prompt Promotions
Promotions are one of the biggest motivators, and knowing when to give one is extremely important.
Any high performing employee deserves to get a promotion, but that doesn’t mean you can’t time them properly.
Keep the following things in mind when it comes to promotions:
- Plan employee promotions so that they don’t coincide with other employee retention strategies.
- Divide promotions into smaller promotions by creating more job titles and smaller raises.
- Line up promotions for all employees in one way or another.
Promotions almost always end up retaining employees. Constantly monitor your employees, and if you feel that an employee has been in the same position for too long, promote them, or give them some kind of bonus, or incentive.
11. Develop a Goal Feedback Loop
From time to time, employees require guidance and direction. As a result, it helps set goals and provide consistent employee feedback.
To develop a working loop:
- Begin setting individual and team goals for all your employees.
- Set a timeline to reach those goals.
- When an employee reaches their goal, provide them with feedback and tips on improvement.
- Analyze the performances of all employees and modify/set future goals accordingly.
Furthermore, you should always request your employees to voice their opinions, feedback, and ideas on the company, its processes, and the general work environment.
12. Develop a Centralized Corporate Culture
Your employees and their actions are direct indicators of what your company stands for and how it works.
Developing a centralized corporate culture ensures all your employees act according to your company rules and policies.
For uniformity, keep the following points in mind when developing a corporate culture:
- Whatever type of culture you opt for, you should always make sure that everyone follows it the same.
- Always incorporate communication and growth into the culture.
- Don’t set all your company policies and rules in stone, be open to amending them.
- Develop a culture of awarding outstanding employees on their adherence to the company culture.
A unified company culture ensures a unified team.
A unified team ensures that your business process is efficient, productive, and lag-free.
13. Connect Your Employees
Team building is the cornerstone of a productive workforce. Employees who can work together will be more efficient, more productive, and happier.
In order to increase communication between your employees:
- Allow them to work on projects together.
- Make use of team building activities so your employees get to know each other better.
- Have your employees take part in company outings, in-house entertainment activities, and meetings.
- Try and reward team efforts more than individual efforts.
A connected team means no gaps in communication, which, ultimately, ensures efficient execution of strategies and planning.
14. Help Underperforming Employees
Underperforming employees can cause delays in the company process, proving to be costly in the long run. However, firing or punishing such employees is rarely the answer.
The first step is to understand that an employee can underperform for several reasons. They may be going through a tough time, may need more training, or may not be used to new management, etc.
To help employees reach their full potential:
- Approach underperforming employees and, without discouraging them, help them realize that they’re not performing up to the mark.
- Work with them to figure out the reason for the performance drop.
- Once the reason is clear, help the employee overcome their struggles so they can begin fulfilling their potential.
Empowering your employees always results in an increase in the company’s employee retention rate.
Your underperforming employee might become your biggest asset with the right approach and care.
15. Invest Heavily in Managers
While investing in your employees is important, it’s equally important to make sure that your managers are operating at their optimal levels.
Your managers are responsible for your employees. Therefore, properly investing in and training your managers can ensure that they provide the same level of guidance to your employees.
To make sure your managers are at their best:
- Have them go through the same training a regular employee would go through.
- Provide them with additional management courses and training.
- Reward managers when their team exceeds expectations.
- Instill a high level of dedication in managers, so they heavily invest in the employees under them.
When you hire according to company culture, a great manager will always lead to happy, retained employees.
16. Develop a Relatable Brand
Talented individuals need to feel like they’re making a difference – that they’re working towards something they believe in. Due to this, the modern-day employee is happy working for a brand they can relate to.
The trick to develop a brand your employees can be proud of is:
- Choosing goals and objectives that the employees can relate to.
- Trying to appropriate your brand with popular names and causes.
- Going ‘green’, being liberal, taking part in online shenanigans like memes, etc.
- Associating the brand with popular companies in your industry.
Employees should be able to proudly announce their place of employment.
As a result, this creates a sense of belonging in the minds of the employees.
17. Mutual Respect & Employee Engagement
An employee that feels respected in the workplace will always be happy. Hence, it’s imperative to create an environment of mutual respect among all employees.
To properly engage your employees and make them feel respected:
- You should work towards and invest in making employees’ time spent in the workplace more pleasant, as well as, more productive.
- Increase communication and collaboration to accomplish tasks, and pay attention to a greater number of employee needs.
- It’s always best to include your employees in your employee retention strategies, that way you boost the respect they have for you, increase employee engagement, and ensure that your strategies always hit the mark.
An engaged employee that feels respected in the workplace will always prefer your company over an unfamiliar one.
Such an employee will also always try to push themselves to the limit and provide their best to the company.
The Feeling is Mutual
“Train people well enough so they can leave; treat them well enough so they don’t want to” – Richard Branson
Companies and employees have a mutually causal relationship, where one’s benefit is also the benefit of the other. Both sides need to provide their best to achieve the most out of the relationship.
Managers and other higher-ups need to understand that their employees are not robots working to make ends meet, rather complex beings whose needs go beyond that of a paycheck.
Implementing a carefully selected combination of the retention strategies above will turn your disengaged employees into assets, and any engaged employee into a permanent part of the team.