HR employee retention strategies: 14 tactics that work

What are employee retention strategies?

Employer retention strategies are deliberate practices a company uses to reduce or prevent employee turnover. These may include practices and programs that cater to employee needs. For example, personal development, career growth, or job performance needs.

Several theories exist around employee retention programs. But why bother about theories? Well, learning about these theories can help you develop more effective retention strategies.

One such theory is the Barnard-Simon theory of organizational equilibrium (TOE).¹ This theory suggests that employees will likely stay in a company if they feel they’re getting enough compensation for their effort.

Another concept is the Human Capital Theory.² This concept reveals how employees who receive training and development become more valuable to the organization. Such employees are more likely to stay with your company.

The following sections will show you how these theories play out.

Why are employee retention strategies important?

Employee retention strategies help you create a supportive and welcoming work environment. This is one way to cater to your staff’s mental well-being and emotional stability.

These strategies go beyond keeping employees happy and engaged in their work. They also involve supporting your employees' physical health. For example, having exercise and relaxation facilities in the workplace.

But it doesn't stop there. A company that cares about employee well-being shares resources for healthy living. For example, you may share resources about managing stress or eating well. This can empower remote employees to live healthier lives away from the office.

Essentially, employee retention focuses on creating a culture that encourages wellness and growth. This, in turn, leads to better employee engagement and a desirable level of commitment. And when employees are happy, they’ll want to stay and help the company grow.

What are the top reasons employees leave an organization?

The Harvard Business Review looked at voluntary employee turnover.³ They shared several reasons that influence employees to leave.

Unclear expectations

Employees should be well-informed about the expectations of their current roles. Otherwise, they are likely to become disengaged. Disengaged employees⁴ may exhibit decreased productivity, increased absenteeism, and eventually leave.

Always communicate job expectations, and do this during the onboarding process and throughout the employment period. Also, involve your employees when making any changes to job expectations that may be required during their employment.

Job role mismatch

Placing employees in roles that don't fit their skills can make them dissatisfied. It's also likely to happen when they don't have an interest in the tasks you assign to them. This can lead to turnover, so consider each employee's skills and interests when making hiring decisions to avoid it.

Too many procedures

Having too many procedures or processes may hinder employee productivity. This can also make their job functions draining and frustrating, which leads to employee dissatisfaction.

To prevent this, streamline your processes and procedures as much as possible. This means eliminating unnecessary steps/bureaucracy, automating repetitive tasks, and documenting all processes.

14 employee retention strategies

Let’s explore some innovative employee retention strategies you can adopt.

1. Start with onboarding

The onboarding stage sets the tone for the employee’s stay at your company. According to Zippia,⁵ organizations with solid onboarding processes increase retention by 82%. Here are some practical ways to spice up your onboarding process:

Hands-on training programs and workshops

Intuit⁶ uses an intensive training program. The program not only familiarizes new recruits with the company culture, it also gives new hires a broad perspective on their roles.

Like Intuit, training programs can help you ensure that new employees are engaged with the learning process, making it more interesting for them. They’ll also become more aware of their abilities to deliver on the job.

Pairing new employees with existing employees

Zapier⁷ adopts a buddy system called the “Zap pal” program, which pairs new hires with more experienced employees. This helps new employees learn about the company culture and quickly build relationships with teammates.

Welcome videos

A good example is the “This is Zendesk” video.⁸ The purpose of the video was to give potential and new hires a glimpse into what working at the company would be like.

An engaging welcome video is a good opportunity to equip new hires with a positive mindset about your work environment and employee morale. Showing them they have something amazing to look forward to allows them to be more open about their experience in your workplace.

2. Benchmark your team and offer competitive base salaries or hourly wages

Offering competitive salaries is vital if you want your employees to stick around. You must compare what you pay to what other companies offer – this is benchmarking.

Why benchmark? In a job market where candidates have more options, employers need to be more transparent. Employees also need to know that you value their work and respect industry compensation standards.

Employees are more likely to stay when they know they’re receiving fair compensation. A 2022 report⁹ by Beqom reveals that 60% of US workers would leave their current company for one with more pay transparency.

In a transparent model, employees know the salary ranges for their positions. They also know the factors you considered when setting their salaries. For example, do they need to occupy critical roles? Should they have more skills or experience?

To achieve this transparency, consider publishing your company's salary information. Do this where employees or potential recruits can see. That’s what Buffer¹⁰ does.

Share salary ranges with your job postings. Also, allow employees to discuss their salaries with each other. Such openness gives them the confidence that what you’re paying is adequate for their roles.

3. Invest in the whole person

Develop an environment that nurtures high-performers by investing in employees. Schneider Electric¹¹ is an example of a company that knows its employees are a valuable asset. It adopted an AI platform that allows its employees to find internal opportunities that match their skills and individual career goals.

Amy deCastro,¹² Schneider Electric’s HR vice president, says that Schneider sees an employee “not just as a means to profit but as a whole person.” This is the ideology to have in today’s employment space.

Three notable areas you want to invest in are skills, well-being, and opportunities. That means you shouldn’t focus solely on the areas that have a direct impact on the company’s bottom line, for example, investing in employees’ training alone. Instead, see the whole person and go out of your way to support their overall well-being and development.

Making an effort to improve your employees' overall growth creates a loyal relationship. It also leads to increased employee retention and a lower cost of recruiting.

4. Understand your team's work styles and communication preferences

You can improve work relationships by understanding your team. More specifically, pay attention to their preferred work styles and communication methods. This helps when discussing project requirements, resolving conflicts, and prioritizing tasks.

Fingerprint for Success (F4S) makes it quick and easy to understand your employees’ work styles. For example, Canva has benefitted hugely from F4S’ people analytics. The insights have helped the company create an inclusive and diverse work culture.

Here are some key items you need to determine:

• Affinities – common interests and shared values among your employees.
• Differences – unique perspectives and skills that team members bring onboard.
• Culture – prevailing practices within your team. For example, values and norms.
• Benchmarks – the quality of an employee’s performance compared to your organization’s established standards.

Invite your team to take the 30-minute assessment on F4S.

You’ll understand your teams’ work styles and communication preferences, which will help you create an inclusive culture. Each individual employee will feel heard, valued, and respected, and the assessment reveals unique opportunities for growth.

5. Offer professional and personal development

Professional and personal development are major drivers of employee retention.

According to LinkedIn’s 2023 global talent report,¹³ companies with employees who learn on the job have higher retention rates. In fact, they have an almost 7% higher retention rate within a 3-year mark.

So, how do you contribute to your team's professional and personal development opportunities?

• Start with regular performance reviews and employee surveys. This will help you identify skill gaps that you can fill.
• Encourage employees to maximize the employee training platforms you provide. For instance, you can run special recognition programs. Or, offer incentives for those who complete their training within a specific time period.

The talent development program from F4S can help your employees improve their skills. F4S provides personal coaching based on the unique motivations and goals of each team member. The rapid coaching programs are supported by both AI and human coaches.

Additionally, a thorough employee assessment helps you identify your talents' blind spots or skill gaps. Not only that, it also shows you each individual's preferred learning methods.

In essence, F4S reveals what you need to focus on within your workforce and how to best address it. It then guides you through the process with accessible and effective personalized coaching programs.

6. Leverage performance management software

To further improve employee retention rates, you can use performance management software to support your existing strategies. For example, tools such as BambooHR or Zoho People let you track and manage employee performance. Here’s how this helps:

• It streamlines your performance review process. These tools provide real-time data for tracking employee productivity.
• It enables frequent communication and continuous feedback. For example, scheduling regular check-ins or sharing updates.
• You can also set well-defined goals based on feedback from employees.

To illustrate this, an Allied health company needed to improve employee performance after a recent acquisition. Diane Gatto, a change manager and business coach, took to F4S’ assessment program to identify the causes of performance declines.

One of the things that became apparent from the results was that ‌some employees needed a detailed description of projects to perform better. The company transitioned to providing more detailed debriefs to fix this.

This is just one way ‌performance management software can help your organization strengthen its employee retention efforts.

Take the free F4S assessment and set up your team.

Find out how F4S can improve employee retention at your workplace, understand individual team members' motivations, and uncover potential blindspots at your company.