With more people leaving their roles than ever before, hanging onto your top talent has become a key concern. In this guide, we’ll explore some retention plans to help your business keep hold of your best employees.
Over the past few years, millions of people across the world have quit their jobs. You’ve no doubt already read about this mass employee exodus, you might have even experienced it for yourself. But one thing we know for sure is that organizations are currently facing an unprecedented retention challenge.
Today employee retention is a key concern, and leaders are having to reconsider exactly what it is that makes their company worth working for. If you’re worried about losing your top talent, or you’ve already lost some valued people, then you know that it’s time to act.
So what can organizations do to keep their employees in their roles? Read on to find out what retention plans you can put into action to keep a hold of your best workers.
A retention plan is a strategic framework implemented by organizations to attract, engage, and retain employees by offering competitive compensation, professional development, a positive work environment, and other incentives to reduce turnover and maintain a talented workforce.
Before we get into the subject further we should first define exactly what we mean by employee retention. So what is it?
Put simply, employee retention is how well an organization can keep a hold of the people who work for it. Companies that have low staff turnover tend to use retention plans to encourage people to stay with them for as long as possible.
Employee retention is vital on its own, but it can also be a key indicator of how an organization is performing in certain areas of the business. Typically if you have a high retention rate it means that your employee morale is high, your people are satisfied in their roles, engaged in their work and have bought into the company culture. At the other end of the spectrum, if you have low retention rates and high turnover, it could point to serious problems.
It’s no wonder then that retention plans have become a big deal for today’s top employers.
It all started with the so-called Great Resignation that came in the wake of COVID-19. After lockdowns and restrictions ended workers across the world found themselves at a crossroads. Driven by a desire for better work/life balance, fresh challenges and higher wages - many decided to quit their jobs.
But while we’ve firmly put the global pandemic in our collective rearview mirrors, the Great Resignation has never really gone away. If anything the problem is only getting worse.
In the US alone, around 50.5 million people quit their jobs in 2022 - surpassing the record set the year before. And 2023 looks like it will continue this trend. Indeed, there are currently around 10 million unfilled positions in the United States.
The numbers are staggering. But the overall impact is that it has transformed employment into a workers’ market.
That means that it’s employees who hold all of the cards. They don’t just feel empowered to do what’s right for them, they know that there are plenty of opportunities out there should they decide to quit. It’s no wonder then that 87% of employees admit they have actively considered switching jobs over the past year, with 65% stating that they could find a better role elsewhere.
And, as the power dynamic has shifted, organizations have been forced to act by developing retention plans to reduce their turnover and keep hold of their top talent.
Clearly, organizations need to act if they’re going to hold onto their best talent. But before you begin to put your retention plans in place you should first understand why your employees are leaving.
It’s not always an easy question to answer. Perhaps the best tool you have in your arsenal is to simply ask your people why they are leaving. This is where exit interviews are worth their weight in gold as they provide valuable insight into how your employees feel and what you need to do to combat any negativity.
Even though we can’t tell you exactly why your employees are leaving, there are some common factors that drive the vast majority of people to quit. These include…
Money talks, and salary is still the most common reason for employees leaving their roles.
Beyond cold hard cash, perks and benefits packages have become a key consideration for employees in the current climate.
The world of work is currently experiencing something of a burnout crisis. So it’s no surprise that a lot of employees cite stress and overworking as the key reasons for them to quit.
People want to see a future in your organization. If they don’t, then the chances are that they will seek out opportunities to advance themselves elsewhere.
One of the biggest changes to the way we work since the COVID-19 pandemic has been the increased focus on work/life balance. For many people, this is now a dealbreaker as they expect their employers to make every effort to help them find a better balance.
People need to feel like their work is appreciated. If they don’t, then they will vote with their feet.
Nobody wants to be bored. So if your employees aren't engaged in their work then the chances are they will seek a new challenge elsewhere.
Whether it’s your workplace culture or your financial health, people will up and leave their roles if they worry about the direction you are headed in.
If people don’t feel like your organization is diverse and inclusive then they may feel that they aren't safe or welcome. This is one of the reasons why building a workplace that’s respectful of people of all races, backgrounds, genders and sexual orientations is so important.
This one is more common than you think. Indeed, managers can play a crucial role in staff turnover. If people don't like their immediate managers, or the senior leadership team, then it won’t be long before they seek opportunities elsewhere.
Sometimes people simply want to do something different. Whether it is to try something new or even relocate, change is a fact of life that employers have to deal with.
Sometimes your employees will have their heads turned by better opportunities. Whether it’s higher salaries, a bigger challenge, or a role that’s better suited to their lives.
87% of HR experts consider employee retention among the highest priorities
The business sector could see a turnover rate as high as 24% in the years to come
In 2022, a record 50.6 million U.S. workers quit their jobs, accounting for 70% of total separations
93% of organizations are concerned about employee retention
67% of employed job seekers are planning to quit in 2023. Of these, 34% would take the leap without having a new job lined up
75% of turnover is for preventable reasons
Roughly 1/3 of new hires will leave in the first 90 days of employment.
Expectations have changed. Today’s top talent aren’t just looking for a corner office and a big salary, they’re looking for something more. It’s because of these changing expectations that organizations find themselves locked in a battle for talent. Skilled employees are voting with their feet and gravitating towards employers that offer them the very best experience.
Whereas once employees might have stayed in a job for life, today’s organizations have to navigate a fluctuating job market where traditional career paths are a thing of the past. Instead, organizations are now competing to offer better company cultures, working environments and compensation packages to attract and retain the very best candidates.
So why has employee retention become such an important issue for organisations?
It’s largely because the benefits of having a consistent workforce and reduced employee turnover are huge. From morale to your bottom line, here are just nine ways that employee retention can boost your business.
Employee retention can be a virtuous cycle. After all the longer your employees stay at your organization, the more invested they are in it. Over time employees invest huge amounts of time and effort in their roles, so they want to stick around to see the fruits of their labor. This is good news for your business as increased loyalty typically leads to increased productivity.
Losing a valued employee doesn’t just put a dent in your workforce, it can also put a dent in your finances. That’s because the cost of hiring new team members can be huge. While the exact cost varies, - estimates put the cost of replacing an employee at between one and a half to two times their annual salary - it’s a huge expense, one that’s usually attributed to the cost of training as well as the lost productivity during employment gaps. So the more you can reduce turnover, the more you can save your organization from the snowballing costs associated with it.
The longer an employee works with your company, the more skilled they become. That’s because they get exposed to relevant experience that helps them build a toolset that’s specifically geared towards your organization’s systems and processes. Over time your employees will also benefit from training, career development and life experience that will make them better workers.
One of the biggest issues that arises from employee turnover are the gaps that are left when a person leaves. That can be both a social issue - such as the friendships and relationships that are lost - but also a physical issue due to a hole that a departing employee can leave in your workforce.
That’s because when an employee leaves, it can take time for you to fill their role with a new hire. That, in turn, leaves a gap which either creates more work for your existing employees or reduces productivity. Neither of which is particularly appealing.
It’s not just you who notices when you have a high turnover rate, your clients and customers do too. That’s because your customers build relationships with your people, a rapport that takes time to grow and develop. That familiarity not only leads to better customer service but can also develop repeat sales and higher customer loyalty.
From the breakroom to the board of directors it seems like everyone is talking about company culture these days. There are countless theories about how to build a flourishing culture, but the real secret sauce behind the very best in the business is employee retention. After all, people are the foundation of your culture - so the longer they stay in place the stronger yours will become.
Over the years colleagues can develop deep bonds. That’s because, the longer your people work with one another, the better they get to know each other. Those deep connections mean that they gain an inherent understanding of what makes their colleagues tick as well as their own unique working style. This knowledge can be vital to encouraging collaboration in the workplace. It can also help build the kind of camaraderie that fuels creative thinking.
If your organization is going to thrive you don’t just need to hold on to your best people, you need to add to your workforce with talented new hires. During the current Battle for Talent where employers are having to work harder than ever to attract the very best talent, retention can be a powerful recruitment tool. Today’s employees are increasingly prioritizing things like culture and work/life balance over salaries and big offices. So if you can show them that you’ve built the kind of organization where people tend to stick around, you’re well on your way to standing out from the crowd.
Ultimately, retaining your employees and reducing staff turnover will impact your business’s bottom line. Whether it’s better customer service, improved collaboration, or optimized processes - it can help you increase revenue. And don't forget its ability to cut costs, particularly those associated with employment gaps and recruitment.
Employee retention is not a nice to have, it’s a business imperative for organizations that want to thrive. Which leads us to the million-dollar question:
How do you get your employees to stay?
This is where employee retention plans can help. By focusing your efforts on addressing the reasons why people leave, you can drastically reduce turnover and reap the benefits that employee retention can offer.
We’ve mentioned it a few times already but what exactly is an employee retention plan and how can it help your organization?
The best way to think of a retention plan is a strategy that organizations employ to reduce turnover, prevent attrition, increase retention and improve employee engagement. While some staff turnover is inevitable, the goal of an employee retention plan is to prevent as many people from voluntarily leaving your organization as possible.
Exactly how your plan looks and what it will entail will be unique to your organization. After all every employer is different. That means there’s no “one size fits all” approach when it comes to retention plans. Instead, you will need to tailor your retention plans to meet the unique challenges that you face as an employer.
However, there are some tried and tested strategies that you can employ as part of your retention plans. So, if you’re looking for inspiration, here are 11 tactics that you can incorporate into your organization’s retention plans.
If there’s one thing you can do to make your retention plans work it’s to look at your employee compensation. Competitive compensation ensures that employees feel valued and fairly rewarded for their contributions, it will also stop them from being tempted by better offers from elsewhere. So make sure that your compensation aligns with industry standards and don't forget to regularly review what you pay to make sure that you stay up to date with current trends.
While competitive salaries are a vital tool for your retention plans, the power of perks shouldn’t be overlooked.
Offering the right kind of perks can help to re-engage your existing employees and keep them in their roles for longer. Offering support with essentials like cell phone bills, gym memberships, travel costs and food is a great way of going the extra mile for your people. Healthcare too can play a key role in keeping your employees in place.
Put simply the more you look after your people the more likely they are to stay loyal.
Given the transient nature of the current employment market, you might decide to pull back on career development. Why invest in your people’s future if they’re just going to leave to work elsewhere right?
But this approach is shortsighted.
That’s because supporting your employees with their career development isn’t just a long game, it has a huge number of short-term benefits that can help you to improve engagement, attract top talent and improve retention.
Research has shown that you can trace a clear line between people’s perception of the opportunities for growth within an organization and their willingness to stay in their roles. One study by Deloitte, for example, shows that companies with a strong development culture have retention rates that are 30-50% higher than those without.
In the current competitive climate, where organizations are scrambling to hold onto their top performers, career development can’t be seen as an optional extra. Instead, it should be front and center for your employees, so they can see the value you place in their futures.
Your employees work hard for you, and rewarding them can go a long way to encouraging them to stay.
Rewards can play a big role in boosting retention. That’s why for years, bosses have turned to employee rewards programs to help reduce turnover.
The reason for the enduring popularity of rewards is that they tap into a basic human need. You see, our brains are hardwired to respond to recognition. We don't want to bore you with the science here, but the takeaway for leaders is that employee recognition and rewards result in higher levels of motivation, engagement and productivity. That’s a whole lot of positives from something relatively simple to set up, especially if you use the help of a dedicated recognition and rewards platform like Bucketlist.
Recent years have brought about seismic changes in every aspect of our lives, including the way we work. In just a few short months organizations have experienced decades' worth of innovation as workplaces have pivoted to remote and hybrid structures in the wake of COVID-19.
But while it may have started during lockdown, it’s become clear that remote working is here to stay. As a result, flexible and hybrid working has now become the norm. That means your employees don’t just look for flexible working opportunities, they expect them.
By offering options such as remote working and flexible hours, you can significantly improve your retention efforts. Offering flexibility in work arrangements allows your employees to achieve a better work-life balance, accommodate personal commitments, and reduce the likelihood of them seeking opportunities elsewhere. It also demonstrates trust in employees and their ability to manage their work effectively, fostering a positive and supportive work environment that helps retain talent.
Given that a third of new hires quit during the first 90 days of their job, the work you do to orientate and onboard your employees can form a crucial part of your retention plans. Every new employee should be set up for success from day one. Your onboarding process should not only make them feel welcome, but it should also introduce them to the company culture and show them how they can thrive as part of it. The key is to help them see a future for themselves within your organization and to find where they fit in the bigger picture.
We can’t stress how important this is, so don’t cut corners. Invest in your employees during this crucial first step and you will lay the foundations that will set the tone for their employment journey with your organization.
If your people are coming into the workplace then it’s important to make the environment that they work in as appealing as possible. Think of it this way: would you rather work in a drab office where colleagues work in cramped conditions, or somewhere where there’s space to focus and enjoy your work?
Improving your organization’s work environment as part of your retention plans could involve creating dedicated quiet areas where employees can focus, or relaxed breakout rooms for brainstorming and meetings. It could involve opening up your space to encourage communication and collaboration or even something as simple as updating the decor to make it as appealing as possible.
It’s not just your physical environment you should focus on either. With so much of our work conducted on computers, the digital environment your employees work in is also important. So make sure people have the tools and up-to-date technology they need to succeed. You’d be surprised how much impact a few simple improvements can have on reducing common annoyances and encouraging your people to stay.
Your people are so much more than their jobs. And what happens in their personal lives can have a direct impact on what they do during their nine-to-five. That’s why the world’s very best workplaces are adopting a “whole human” approach, that focuses on supporting their people’s health, wellbeing and happiness - not just their workplace performance.
And it’s working.
Anyone who’s heard of Maslow’s Hierarchy of Needs will know that people need to take care of certain specific needs. If these needs aren’t being met by your organization, then they’re much more likely to look for an employer where they will be.
So a good tactic to include in your retention plans is to care for your people’s wellbeing. Helping them to look after their physical and mental health will not only make them feel cared for, but it will also dispel any fears or concerns they may have which will help to keep them in place. The result is a win-win for everyone involved.
In an ideal world, people would stay at your company because they love their jobs and want to see you succeed. Unfortunately in the real world, people often need a little encouragement. So if you want to encourage more of your employees to stay in their roles you’re going to have to incentivize them.
Incentives like annual bonuses and profit shares are great tools to help you keep a hold of your people. Not only is cash a great motivator, but you can structure these awards so that they’re paid out annually. That means if people want to be eligible for their bonus they are going to have to stick with you until a certain date.
But cash isn’t necessarily king. Some organizations offer non-monetary rewards like swag, gift cards or even money-can’t-buy rewards like paid vacation or unique gifts. Whatever you choose, employee incentives can be the carrot that you dangle to stop your people from quitting.
We use the word culture all of the time, but what exactly do we mean by it?
In the workplace, culture refers broadly to the environment you create for your people to work in. It’s not necessarily the physical space that they inhabit (though that can be a part of it). It’s the collection of principles, ideologies, beliefs and values that are shared by everyone who works there.
Positive work cultures are places where employees feel supported, where their well-being is prioritized and where policies are in place to encourage trust, respect and support. In a positive culture, morale is high, employees are engaged and motivated to come to work and perform to the best of their abilities. And, most important of all, they are happier and more satisfied in their roles which means that they are less likely to leave and look for work elsewhere.
Employees can be trained, they can be encouraged and they can be rewarded. But they can't change who they are. That’s why hiring the right fit is so important. If you get it right at the very beginning then there’s a better chance that the person you hire will stick around with your company in the long term. However, if you hire someone who isn’t going to fit in, then there’s a strong chance then they will be heading for the exit in the not-too-distant future.
To put it into perspective, bad hiring decisions are one of the single biggest factors that contribute to employee loss. So if you want to implement retention plans that keep your employees in place, a good place to start will be hiring the right people in the first place.
The 11 ideas above are a great place to start when it comes to implementing your own employee retention plans. But it’s important to remember that even the very best strategies can't guarantee perfect retention.
Employee turnover is a fact of life. At some point, your employees will move on, whether that’s to retire, to take time out for family, to move or to seek new challenges. Knowing when it’s time to say goodbye and handling that process in the best way possible can be just as important to your overall retention as it will help your people to see that they will be taken care of when they do inevitably move on themselves.
If you want your organization to succeed then employee retention plans should be at the top of your to-do list.
As we’ve explored, employers currently face a perfect storm of employee retention. Changing expectations, increased competition and a worker-friendly market mean that you have to work harder than ever to hold onto your top talent.
But by understanding these issues and actively addressing them through retention plans, employers can take steps to address their impact. By implementing some of the strategies we’ve outlined in this guide, employers can take their retention efforts to the next level and build a strong and committed workforce that shapes their long-term success.
Get it right and the benefits can be huge. With increased productivity and lower costs, you can boost your bottom line. Meanwhile, retention plans can help your efforts to build a positive culture and strong teams.
The key is to not take your people for granted. The days when people had a job for life are gone. Today’s employees have plenty of choices open to them, and they know it. That means that you are going to reflect their value to your organization. But an investment in them is an investment in your future, one that will pay dividends for years to come.