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What Are the Best Employee Retention Strategies?

Employee retention strategies play an important role in modern business. But why? And how can you keep your best talent loyal to your business?

employee retention strategies refer to an organization's ability to reduce employee turnover

Employee retention might be the big buzzword floating around the business world. But the rise in the focus on employee retention just highlights the challenges of attracting and retaining talent in the post-COVID workplace.

It was the ‘Great Resignation of 2020’ which presented a never-seen-before employee turnover rate, with more than 47 million Americans quitting their jobs voluntarily by 2021. Partly fueled by the global pandemic and ensuing shutdowns, and partly fueled by the emergence of Gen-Z into the workplace, employers were forced to look at how they were delivering not just wages but employee job satisfaction.

Was it offering remote work, higher wages or more flexible schedules?

While the answer isn't so simple, there are a number of factors it helps to understand before we look at creating employee retention strategies.

Why is employee retention important?

A stable, dedicated workforce is more than just a collective of skilled individuals. It represents a significant investment in time, resources, and training.

High turnover rates not only lead to direct financial losses linked to hiring and training replacements but also to indirect costs such as reduced productivity, lower morale, and even potential harm to a company's reputation.

Furthermore, long-term employees typically exhibit greater knowledge of company operations, have strong relationships with clients, and contribute to a solid company culture. Losing such employees can lead to material and intangible setbacks.

What changed in the world in 2020?

The answer here might be, well obviously it was COVID19. With most of the global population locked down at home and people suddenly pursuing their work from home opportunities, traditional employers were forced to either let go off staff or adapt.

But perhaps more importantly was the emergence of Gen-Z who were just coming into working age in 2020.

how to retain employees in the modern job market

The rise of Gen-Z

Gen-Z are those born between 1997 and 2012 - with the oldest of those turning 23 as the pandemic struck. And while 'lazy Millennials' had been (very unfairly I might add) the rallying cry of business owners for the past decade or so, Gen-Z presented a new challenge.

This generation is technology and social media native, perhaps more focused on equality and fairness than any other generation before, and less interested in doing work traditionally seen as 'boring', instead looking to pursue job satisfaction above all else. And this can mean anything from working in a role that aligns with their personal values through to a job that offers a genuine opportunity for work life balance.

They also value their personal health and wellbeing much higher than previous generations and are less likely to stay in a role that doesn't offer much in the way of progression or development opportunities.

Much has been written about what Gen-Z wants from the workplace.

According to Gallup, it costs one-half to two times of an employee’s salary to replace them.

As workers escape traditional roles in droves, business leaders are being driven to reconsider their approach and focus on employee retention strategies.

Why are people leaving in such numbers? More importantly, what can companies do to secure their best talent and prevent costly staff turnover?

Online opportunities post-pandemic

Another key factor in the Great Resignation was the shift in attention to autonomy and the opportunities available online. With much of the world starting a 'side hustle' in 2020/21, it suddenly became plain that a job for life wasn't necessary any more, and that going freelance was very much a thing.

Online platforms such as Upwork and Fiverr saw a surge in registrations as people set up their online businesses and stopped working for 'the man'.

And this meant not just a brain drain from the pool of available workers, but led to a compound effect as more people realized that they could get a better work life balance by working for themselves.

All of this has impacted the global job market and has led to a challenging situation for business managers looking to attract talent, engage staff in their work and boost employee retention.

The end of jobs for life

While older generations might have left education and moved into their career until retirement, the world has increasingly being moving away from this, especially in the US.

A job for life used to be a source of security and a badge of honor.

But as we weather economic instability and changes in technology such as the rise of AI, jobs are no longer the source of long term security they once were. In fact a study in the UK found that 21% of working adults do not expect to be in the same industry as they are today by 2030.

This even extends to societies such as Japan, where a job for life has been a cultural feature for much of the past century. Today, one in three Japanese do not even look for "traditional jobs."

In short - the world of work is changing rapidly. And so businesses looking to retain employees need to take their employee satisfaction more seriously than ever to reduce employee turnover.

employees quit because of stress, lack of challenge or not feeling valued

What are the main causes of employee churn?

While the rise of freelancing, the demands of Gen-Z and the end of jobs for life have had an impact on the world of employee retention, they're not the only factors. More than ever employees can move to other roles via easy to access online portals and LinkedIn savvy employees know that they can put themselves in the shop window for more attractive job offers to come in.

And so understanding the key drivers behind employee churn is crucial to encouraging employees to stay, especially with regards to valuable employees or 'top talent'.

Predominant reasons for employee churn include:

  • Limited professional growth opportunities
  • Lack of recognition
  • Inadequate compensation
  • Dissatisfaction with management style
  • Lack of or poor company culture
  • Poor communication or lack of transparency
  • High stress environments
  • Expectations of unpaid overtime
  • Lack of focus on employee health and wellbeing

Another significant factor in the current climate is the shift in work-life values post-pandemic. Many employees are now re-evaluating their priorities, seeking workplaces that offer more flexibility, work-life balance, and considered health and well-being.

What do employees look for in a modern workplace?

What employees seek in a modern workplace has evolved significantly. Beyond the obvious, competitive pay, workers now demand, among other things:

  • Opportunities for personal and career development
  • A diverse and inclusive culture
  • The ability to be involved in decision-making
  • A flexible work schedule
  • Long-term job security
  • Robust benefits packages
  • Feeling recognized for the work and effort they make
  • A focus on health and wellbeing

Much of this has been translated into the quest for improved employee engagement - another of the major buzzwords you'll hear in business circles.

The theory goes that by improving employee engagement, businesses can improve how employees feel about their job. And of course, the other big buzzword is 'work life balance'. While some in business might see this as something that over-entitled and underworked younger employees are obsessed with, there are clear benefits to offering flexible work arrangements and schedules.

With a good work life balance, employers can avoid employee burnout and improve the general morale amongst staff.

But while these are the things that modern employees expect from the workplace, how can you create your own employee retention strategies?

performance monitoring is part of employee retention programs

The best employee retention strategies

Effective employee retention strategies can not just reduce your employee churn and improve staff morale. They can also improve productivity, attract a higher caliber of candidates for future job roles, and reduce the costs associated with hiring and training new hires.

If you're looking for ways to increase employee engagement, these key retention strategies are some of the most popular methods.

Competitive compensation packages

Whether they admit it or not, pay is one of the major deciding factors in whether people stay in a job or move on. While you might feel that you offer a good pay structure, make sure to keep tabs on this and regularly audit your pay packages to be competitive within your industry.

Professional development opportunities

Because modern employers value their personal growth more than ever, offering ongoing training and professional development opportunities is a huge part of employee retention.

While showing a commitment to your employees' personal growth can strengthen their loyalty, it also means you have a team of well-trained individuals who can see the value in staying put for longer.

Encourage a healthy work-life balance

While not every business can allow for work from home days, being flexible where possible will be appreciated. Whether this is allowing parents to collect their kids from school without penalizing them, or encouraging workers to take their allotted time off.

This can also allow for various work arrangements, such as remote or hybrid models. Even one or two days a week working from home can be highly appreciated and help to retain employees.

Recognize and reward employees

Recognition of employees' contributions at work goes a long way to helping them feel valued and included. And that means engaged employees. Rewards are also a nice touch, although you don't have to use the carrot method to ensure you have highly engaged employees.

Simply acknowledging the input and impact of their work when relevant can help employees feel suitably rewarded. This could be an announcement in team meetings, or a message on the office digital signage display.

Read: How businesses use digital signage for employee recognition.

improve the employee experience by recognizing top talent

Open and transparent communication

Nobody wants to feel like they don't know what's going on. And so being transparent with what is happening in the business can be an important part of any employee retention strategy.

This doesn't necessarily mean telling them about the quarterly revenue projections. But keeping them in the loop with key changes, impending hires or other business developments that affect them directly will help employees feel that they are part of the team and they are in the know.

While regular team meetings are a good way to convey these messages, you can also use internal communications such as messaging or announcements on in-office displays.

A platform to speak

Increasingly, businesses are looking at ways to encourage employees to be able to give their honest feedback or opinion on work matters. While this might not necessarily mean making business decisions, it can mean giving them the opportunity to share their frustrations with inefficient processes, or even being able to share grievances without fear of reprisals.

Offer an open and possibly anonymous channel for employees to give their opinion and feedback through messaging or email, or even direct to a decision maker within the workplace.

Encourage employee involvement

Engage employees by involving them in decision-making processes. Again, this might not mean making key business decisions, but offering feedback through employee surveys or having regular 'town hall' meetings where people can share their thoughts and ideas.

This sense that all your employees are part of a group that has a voice can greatly boost morale and workplace satisfaction.

Promote from within

When it comes to filling new roles, or expanding operations, businesses often look to new hires. However, showing your team that advancement is possible within your organization by promoting from within (or opening the role internally before going external) can be a strong vote of confidence in your team.

This also signals to employees that you value them and their work and consider them suitable for higher roles.

Create a supportive work environment

This might sound obvious, but investing in a positive workplace culture is one of the most important ways to increase employee retention. A strong company culture means maintaining good relationships among team members, providing necessary resources, treating each team member with respect, and ensuring that everyone can share their opinions without worrying about being fired or treated differently.

recognition and rewards are a major part of employee retention

Regular performance reviews

Offering constructive feedback on employee performance can help you to both help employees feel engaged, and spot potential departures. Whatever their role in the company, a quick chat as part of a performance review or even just to find out how they're finding the job can both build employee engagement and help them feel valued.

You can even use these opportunities to discuss their career goals and potential growth opportunities within the company.

Recognize extra-curricular success

We're more than just employees. We're also people with real lives and things that we love to do in our free time. Recognizing people's successes outside of work and sharing it with the team can be a great way to highlight their skills and make them feel valued for being more than just part of the work machine.

Of course, you'll need to check that they're happy to share their non-work life with their work colleagues. But if someone runs a marathon, completes an education course, receives an award or even if they have a baby, sharing their good news can really boost the employee experience.

Remember to share your heartfelt congratulations and (if they agree) their images in your email newsletter or on your digital signage.

Wellness programs

Investing in your employees' health and well-being is no longer seen as a nice to have, especially in the post-COVID landscape. While this can mean a good medical package, or gym membership as part of the job, it can also mean having a corporate wellness program or options for your team to enjoy fitness together.

Whether this is away days on a hiking trip, Monday morning pilates in the meeting room, or team building office fitness plans, consider including a wellness program as part of your overall employee retention and benefits package.

Remember: A healthy employee is a happier and more productive one. Fact.

How employee recognition plays a part in your retention strategy

Employee recognition is integral to a successful retention strategy. Recognizing employees for their hard work, achievements, and dedication boosts their morale, engagement, and loyalty - which in turn results in a better employee retention rate.

But how can you create a process of employee recognition in the workplace?

One popular method is to track results and performance through verifiable KPIs such as sales, positive reviews or increases in footfall. While this is useful for teams that carry out tasks that can be tracked such as sales teams, there are obviously people in the workplace who are still working hard but might not be verifiable.

In these instances, it can be useful to pay attention to what an individual or team is doing over a set period of time, whether that is one hour, one day or one week. Perhaps as part of a performance review.

This then demonstrates that their efforts are noticed and appreciated, which instills a sense of belonging and signaling that they are valuable to the company.

Recognizing your team's efforts

Employee recognition can take various forms such as formal awards, public acknowledgment, or even personal words of thanks.

Team meetings can be a great way to really recognize the team's efforts. But sometimes, with remote work or hybrid teams, not everyone is together at the same time.

We've previously put together an in-depth guide to employee recognition.

But the TL;DR is:

  1. Be genuine and personal with compliments, making them direct, personal, and meaningful.
  2. Understand the preference of each employee for the form of recognition they'd most appreciate.
  3. Recognize employees publicly, award those who embody company values, and use shared meals or meetings for giving recognition.
  4. Encourage peer recognition through dedicated communication channels for team praise or handwritten thank you notes.
  5. Gamify recognition programs to make them more engaging, so they last over the long term.

Digital signage is a great way to share recognition of employees' efforts across the company. If you already have a network of displays and screens, ScreenCloud can help to manage your digital signage display and improve your employee engagement (and, by extension, employee retention!).

Find out more about how to use ScreenCloud. Book a free demo, or get started for free.

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