John DealApril 1, 2024
Topics: Employee Experience

13 Effective Employee Retention Strategies for 2024

A committed workforce is essential to the success of any organization. But whether you’re new to talent management or you have years of experience, you know how difficult employee retention can be. Although there’s no one-size-fits-all approach to improving retention, considering the factors that affect it can help you develop an effective approach.

Creating the right employee retention strategy for your organization starts with identifying causes of turnover. Once you have a better understanding of what impacts your employee retention rate, you can use it to make informed decisions about managing it. 

In this article, you’ll learn how to recognize and address the reasons employees leave, use modern technology for better talent management, and adopt strategies that boost employee engagement, satisfaction, and retention.

First, let’s talk about why employee retention matters.

In This Article

    Why Is Employee Retention Important?

    Employee retention is important because it helps organizations avoid preventable business disruptions. When an employee leaves a job, their former employer often faces the task of filling their position before operations take a hit. 

    When you consider the impact on other employees — who may be left managing bigger workloads in the meantime — reputational costs become a concern, too. Reduced operational efficiency and low morale can be expensive, but hiring isn’t cheap, either. 

    The average cost per hire in the United States is more than $4,600, but the total expense of hiring, onboarding, and training a new employee could be much higher. It’s estimated that up to 40% of hiring costs are — those directly related to hiring — such as posting jobs, completing background checks, and using recruitment agencies. 

    Soft costs are the intangible hiring costs that make up the remaining 60%. They include indirect expenses, including:

    • Decreased productivity due to interrupted workflows

    • Time that management teams spend screening, interviewing, and training candidates

    • Additional pay or time off for overworked employees

    Without a focused approach to retention, organizations risk losing their best talent to competitors, underscoring the need for tactical planning to keep employees satisfied and committed to their roles. 

    Knowing how to identify and resolve these issues can help you connect with employees about their concerns, address their feedback, and prevent turnover.

    Why Do Employees Leave?

    With 61% of employers having difficulty retaining employees, it’s more important than ever to understand exactly why employees are departing their jobs. Exit interviews — one of the most common ways to learn the reason for departure — often reveal the reasons behind employee turnover and offer actionable insight into what the company can change to prevent it in the future. However, there are often signs that an employee is considering leaving long before the exit interview takes place. 

    Employees might leave their jobs for one or many reasons, and you might not pick up on all of them simply by observing engagement levels. These reasons include:

    • Pursuing higher salary options

    • Looking for a remote position or in-office role 

    • Seeking opportunities for professional growth, including a change in title or level of seniority or responsibility

    • Leaving bad management 

    • Desiring a more supportive and positive workplace culture

    • Relocation and inability to continue working due to proximity to office or worksite

    Issues like a noticeable decrease in productivity and diminished teamwork signal a lack of engagement and can lead to turnover if not confronted. Similarly, a decrease in efforts to satisfy managerial expectations, reluctance for long-term commitments, and a negative shift in attitude could indicate intent to depart. 

    You may notice that employees who show these signs frequently apply for other internal positions, as they may be looking for a way out but haven’t committed to leaving the organization yet. Recognizing these behaviors early is crucial for developing timely intervention and retention strategy adjustments.

    Gaining insight into the reasons employees consider leaving is pivotal for developing targeted retention strategies. By understanding these signals, businesses can tailor their approaches to address specific areas of concern, whether it's enhancing job satisfaction, improving work-life balance, or offering more opportunities that would compel an individual to stay. 87% of millennials consider opportunities for professional or career growth and development important.

    Discover the Keys to Successful Recruitment, Retention, and Growth. Download the Report

    13 Employee Retention Strategies

    To retain top talent, organizations need comprehensive employee retention strategies that address key aspects of the employment experience. Consider these examples when building your overall strategy:

    1. Create Training and Professional Development Opportunities

    By offering training and professional development programs, companies can encourage employee retention through career advancement and personal growth. 87% percent of millennials consider opportunities for professional or career growth and development important in a job, and nearly seven in 10 non-millennials agree. 

    Specific initiatives might include curated reskilling and upskilling opportunities, leadership training programs, succession planning, and career pathing to help employees advance within the organization. Establishing a culture of continuous learning and using workforce intelligence software can help your organization retain talent and prepare for future challenges.

    Related: How This Retailer Increased Employee Retention With an Intelligent Talent Marketplace

    2. Manage With Retention in Mind

    By prioritizing employee satisfaction and engagement when making decisions and developing policies, you can establish a management approach that increases engagement and promotes retention

    This approach is crucial for maintaining a work environment where employees know their contributions matter and feel motivated to stay long-term. You can achieve this by aligning leadership practices with employee needs, offering development opportunities, and actively seeking employee input on decisions that affect them. 

    If time is a concern, keep in mind that meeting with employees for just 15–30 minutes each week is key to having meaningful conversations that build trust and boost engagement — two essential elements of employee retention.

    3. Create a Positive Organizational Culture That Employees Want To Be a Part Of

    Employees who feel their values and goals align with those of their employer are significantly more likely to stay with the organization than those who don’t. In a recent survey, 92% of participants said company culture impacts whether they intend to stay with their current employer. 

    A positive company culture fosters employee retention because it ensures everyone feels welcome and valued, encourages strong working relationships, and facilitates organizational success. You can facilitate a culture that employees enjoy being a part of by encouraging feedback, maintaining inclusive internal policies, recognizing accomplishments, and offering employee-centered programs like Employee Resource Groups (ERGs).

    4. Recognize and Reward Employees

    Acknowledging and rewarding employees for their contributions is essential for fostering a positive work environment and enhancing retention, as it shows employees they’re an integral part of the organization. Employees who feel underappreciated by their managers are twice as likely to quit within the next year, so it’s critical to incorporate recognition into your retention strategy. 

    Recognition can come in many forms, from verbal praise and awards to bonuses and promotions. Implementing a structured rewards system that aligns with company goals encourages employees to perform at their best. You can achieve this by identifying key performance indicators, celebrating achievements, and providing meaningful rewards that resonate with your workforce.

    5. Encourage Open and Ongoing Communication

    Encouraging open and ongoing communication is about creating channels for continuous dialogue between employees and management. When employees know their opinions and insights matter, it’s easier for management teams to foster trust, transparency, and a sense of belonging among employees. 

    And it’s not just important at a management level — effective team communication can increase retention by 4.5 times. You can support open communication by implementing regular feedback sessions, encouraging team discussions, and maintaining an open-door policy for all staff. This approach can help you resolve issues promptly and gather valuable insights for improving workplace dynamics and employee satisfaction.

    6. Hire Best-Fit Employees

    Talent acquisition (TA) leaders believe that the definition of a “quality hire” is changing, and they report that prioritizing soft skills and ensuring the candidate’s values align with the company are the most important factors when hiring for retention. Achieving this match requires an effective recruitment process that evaluates the technical abilities of candidates and their cultural fit and potential for growth within the company. 

    The X factor here is an HR solution that allows you to provide streamlined, customized experiences for candidates, employees, recruiters, and hiring managers on one platform — and use the data from each of them to attract and retain the right people.

    Related: AXA’s Unified Approach To Hire, Grow, and Retain Talent

    7. Emphasize the Importance of Teamwork

    You can also boost employee engagement and retention by building a culture that values teamwork. Comprehensive teamwork initiatives foster an environment that encourages employees to connect with colleagues. Opportunities like networking and ERGs help employees find peers in the organization who share similar backgrounds and experience, which can contribute to employee retention. Recent research found that 75% of businesses with ERGs consider them beneficial to their retention efforts

    8. Promote a Healthy Work-Life Balance

    Prioritizing your employees’ work-life balance benefits your organization and your team by promoting overall well-being and encouraging productivity. This can help increase morale and make employees feel that the company actually cares about them as a person and not just an employee. 

    By offering flexible work arrangements, encouraging time off, and respecting personal time, organizations can help employees manage their professional and personal lives effectively. With one in four employees reporting that they left their jobs for well-being or work-life balance reasons, this is key to preventing burnout and enhancing job satisfaction.

    9. Focus on Employee Wellness

    Employee wellness is key to retention because of the significant advantages it offers to both employees and employers. Supporting their physical, mental, and financial health is critical to showing employees you care about their well-being, and this sense of value can encourage long-term employment with the company — and the numbers prove it. 

    One recent report revealed that 84% of employers say that offering financial wellness tools can help reduce employee attrition. You can accomplish this mutually beneficial dynamic by offering mental health days, financial planning resources, and wellness programs like health club memberships and stress management courses.

    10. Consider Flexible Work Arrangements

    With more companies offering remote work options and flexible schedules, many professionals also want to work outside the traditional 9-to-5 structure — as well as outside the office. While it’s not possible for some organizations to offer this, it’s worth considering if it’s a plausible option for your team.

    Flexible work arrangements can reduce stress, help employees establish an optimal work-life balance, and increase employee retention. They’re so important that 61% of Americans would quit their current jobs for remote roles. Essentially, if employers who could give employees the option to work remotely choose not to, they increase their risk of employee churn. You can implement these work arrangements by assessing job roles for flexibility potential and establishing clear policies on remote or hybrid work options and scheduling restrictions.

    11. Offer Competitive Salaries and Benefits

    Competitive compensation packages are fundamental to retaining top talent because employees want their employers to recognize that their time, skills, and contributions are valuable. 

    In 2022, one in five employees who left their jobs did so for better pay or benefits. Recognizing the value of employees through fair pay and additional benefits directly impacts job satisfaction and loyalty, both of which influence employee retention rates. By conducting market research, performing accurate valuations of each role within the company, and being willing to adjust your offerings to remain competitive, you can prevent compensation-related turnover.

    12. Provide Job Perks

    While pay is a critical component of employee retention, providing different types of compensation can help you retain your internal talent, too. One example that’s become increasingly important is childcare. 

    Between 2020 and 2022, more than half of all workers left their jobs because they couldn’t find childcare, and one in four quit because they couldn’t afford it. You can encourage employee retention by offering perks like childcare assistance and wellness programs. By offering perks that can be leveraged outside of the workplace, you can highlight your business’s commitment to supporting employees in a meaningful way. 

    13. Establish Mentorship Programs

    Mentorship opportunities enable professionals at different levels within the organization to learn from each other, enhance their skill sets, and advance their careers. These collaborations expose employees to different perspectives and ideas that can help them recognize their potential, and more employers are taking notice. 

    As of early 2024, 98% of all Fortune 500 companies offered mentorship programs — a huge jump from the 70% that offered them in 2009. By transferring knowledge and sharing their experiences, mentors can help mentees prepare to continue on their career paths within the company through internal mobility.

    Related: Planting the Seeds for Inclusivity and Belonging with Granite Construction

    Retain Your Top Talent with Phenom Employee Experience

    Employee retention can be challenging for talent management professionals and managers — and trying to develop an effective strategy with inaccurate data, outdated technology, and a lack of direction makes it even harder. Keeping up with today’s evolving workforce requires an advanced, customized solution that streamlines every aspect of talent acquisition and management and optimizes the experience for candidates, employees, and organizations. 

    Phenom transforms the challenge of employee retention into an opportunity by leveraging AI to enhance HR workflows, focusing on enriching the employee experience from the outset. Our platform is designed to empower organizations to engage, grow, and retain top talent by providing comprehensive career development opportunities, including career pathing, professional development, and upskilling and reskilling. It also unifies talent acquisition to source talent internally and externally, making sure recruiting teams consider the best talent regardless of the source. 

    With Phenom, organizations can harness real-time data to develop a nuanced understanding of their workforce, enabling them to implement targeted retention strategies that recognize employees’ potential.

    Learn how Phenom Talent Marketplace can help you create, implement and maintain an employee retention program tailored to the needs of your organization and your employees.

    John Deal

    John is a product manager whose goal is to package Phenom's employee-centric culture into a solution that can be used by other organizations. He enjoys horror novels and running—mostly from age.

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