How to Improve Employee Retention: Best Practices
Organizations today are walking a thin tightrope, balancing employee acquisition and retention in our currently tumultuous labor market. Between the pandemic-driven “Great Resignation,” the current labor shortage, and employee demands for work-life balance prompting many to re-assess whether or not they want to stay with their employers, finding and retaining top talent is paramount for companies hoping to stay afloat.
Almost two-thirds of companies report they are changing their acquisition and retention strategies to address labor shortages — including rescinding offers — while 64% are increasing compensation for existing employees to entice them to stay.
But increased compensation — though a major factor — is no longer enough to retain employees, with 76% reporting that an organization with career growth opportunities is a must have.
So how can companies keep top talent from leaving?
Check out the following best practices for how to improve employee retention.
1. Provide Opportunities for Employee Growth and Development
Almost 60% of employees say they want their company to be a place they can do their work well. In order for that to happen, companies must provide access to career pathing, learning and development (L&D) programs, and internal gigs — all of which lead to an increase in employee engagement and retention.
Why are these opportunities important? They enable upskilling and reskilling so that employees can evolve and bring growth to the organization. Let’s break them down further:
- Career Pathing: Helping your employees visualize a path at your organization is an employee retention best practice because it gives them a clear view of how they will advance. Career pathing can also help illuminate skills gaps that employees can then focus on for their future.
- Learning and Development (L&D): L&D is a driving factor in whether or not employees stay at an organization, with 94% reporting that they would switch jobs if another company offered more L&D. In fact, organizations that have comprehensive learning programs found that their profit margins increased by 24%.
- Gigs: Matching employees with short-term internal gigs helps upskill, reskill, and engage employees at scale — all through AI-powered technology. Gigs help unleash talent within the organization, mitigate company risk, and increase retention.
If employees don’t have access to these opportunities and feel stagnant in their career, they are more likely to leave for a place they view as better for career advancement. In fact, 63% left a job last year due to inadequate growth opportunities.
Customer success spotlight: “Our initiatives, coupled with Phenom’s technology, makes internal career opportunities more tangible and transparent. This encourages our employees to make their next career move cross-functionally within Kuehne+Nagel so we don’t lose them to the external market.” – Kuehne+Nagel
Related Reading: Driving Employee Engagement with Gigs and L&D
2. Promote Feelings of Connection and Belonging
Employees, especially those of younger generations, are actively voicing their opinions — and expecting companies to listen. They want to feel safe and heard at their jobs, and they’re prepared to move on if a company can’t meet their standards. Let’s look at the stats:
- 48% say a diverse and inclusive workplace is a requirement before they even consider working for a company
- 56% won’t consider a company that doesn’t share their values
- Only 36% of employees report feeling engaged and connected to their current company
“The best companies are going to listen to many opinions,” said human resources advisor and author Paul Wolfe. “People want to feel seen and heard.”
Creating a company culture where employees feel connected to their work, the mission, and — most importantly — each other, is a retention best practice that’s critical to implement.
One way to do this is by creating a mentoring program, letting AI-powered technology match and connect employees with best-fit internal mentors who will help them develop and evolve. Mentoring programs not only foster one-to-one relationships that promote connection, they also enable employees to gain more skills for their future, and ultimately, the business.
Another way to promote connection is to implement Employee Resource Groups (ERGs). ERGs are places for employees to connect on similar interests, beliefs, hobbies, and lifestyles — ultimately empowering them to build stronger networks and stronger feelings about your company.
Though this employee retention strategy seems simple enough to begin building, only 26% of leadership say that employee engagement and connection is a very important part of what they think about, plan, and do every day.
To create a place where employees feel like they belong, in turn retaining employees for the long haul, that number must change.
Customer success spotlight: “Now with Phenom, Quadient has an internal talent marketplace where employees are able to easily identify open roles and opportunities for job progression based on their goals and company needs. The AI powering the platform remembers employee info and allows them to connect with other employees who may be on the same career journey.” — Shelia Gray, Quadient
Related reading: How Mentoring Improves the Employee Experience
3. Take Care of Your Employees
This sounds like a no-brainer, but showing your employees that you care about them — and following through with tangible action — is a top employee retention practice.
But what does “taking care of your employees” look like? Increased benefits, competitive salaries, and flexible work schedules, to name a few.
Increasing mental health benefits is a meaningful way companies can create a positive employee experience at their organization. Phenom, for example, offers a $1,000 mental health stipend for all U.S. employees. Other companies are doing the same, with SHRM reporting that “25% percent of employers increased their mental health service offerings during the pandemic.”
The pandemic also normalized remote work, and though it’s considered an employee retention best practice, not all companies are acting on it. SHRM found that “44% of employees want to work remotely full time, while only 16% of employers plan to continue allowing full-time remote work.” If remote work doesn’t impede an employee’s role, it’s a benefit candidates are actively searching for before they even consider applying.
One way to keep employees invested in your organization is to constantly update and highlight company benefits through regular internal communication. Reminding employees what your company offers — and encouraging them to take advantage of perks — shows you care.
Customer success spotlight: “Phenom helped us build a tool that created an ecosystem for us, not just for people to find their next jobs, but to actually grow within the company, build a network, and build mentorships. We’ve retained employees that would have left for something different because they got frustrated with the archaic tools that we had.” – Amanda Day, VP Talent Acquisition, The Cigna Group
Related resource: 6 Elements for a Meaningful Employee Experience
4. Adopt an Intelligent Talent Marketplace
In short, a talent marketplace is an internal platform that engages and empowers employees to apply for open internal roles and discover opportunities for learning, development, and connectivity within your organization. It’s also one of the best ways to develop and retain top talent.
Why?
Through a talent marketplace, employees can access all opportunities discussed previously — career pathing, L&D, gigs, mentoring, ERGs — all in one place. In fact, Gartner predicts that “by 2025, 20% of large enterprises will have deployed an internal talent marketplace to optimize the utilization and agility of talent,” leading to higher retention rates and ROI.
The bottom line is that employees who feel connected to their company and leadership perform better and stay longer. Providing a talent marketplace where employees can find everything they need to learn, evolve, and connect is a retention strategy you don’t want to miss.
Customer success spotlight: “Newell Brands stepped up their [internal talent marketplace] efforts by launching a fully global program, which handed employees more control over their long-term career goals. The team chose to implement Phenom’s Employee Experience (EX) platform, recognizing that its AI-supported job search, skills matching, and interest-based job alerts capabilities would empower employees to take control of their careers.”
Related reading: Boost Employee Engagement and Retention With a Talent Marketplace
Future-Proof Your Workforce
Creating an employee experience that helps your talent grow and evolve also makes them more profitable for your company, and more invested. Employee engagement affects retention — and employees who are engaged are more likely to stick around for the long haul.
Dive deeper into ways to support your employee retention strategies — check out our Talent Marketplace Buyer’s Guide.
Maggie is a writer at Phenom, bringing you information on all things talent experience. In addition to writing, she enjoys traveling, painting, cooking, and spending time with her family and friends.
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