Employee Retention Strategies to Try Out in 2023

Employee turnover is expensive. LinkedIn notes that not only do you have to spend the time getting a new employee trained, but you may also have to waste money on recruitment costs, experience lower productivity, possible off-boarding costs, and potentially lower morale from the rest of your team. If you constantly have a high turnover, that’s a lot of money wasted. 

Knowing the downsides of a bad retention rate is step one, step two is getting to the bottom of why they’re quitting. According to Forbes, 62% of people left their jobs in 2021 due to a “toxic company culture,” 59% left because of a “low salary,” 56% left because of “poor management,” and 49% left because of a “lack of healthy work-life boundaries.” In turn, the top 6 things employees want in their next job include better pay and/or benefits, better work-life balance, more time spent doing the job that keeps them engaged, higher stability and security, COVID vaccine policies that “align with [their] beliefs,” and a more diverse and inclusive work culture.  

Now that we know why turnover is a problem and what causes it, we can dive into the nitty gritty: what can you do to increase your employee retention rate? 

10 ways you can increase your employee retention rate

The 5 reasons employees decide to stay in their current job are a good salary, engaging work, flexibility in work schedules, a caring upper management, and a “great company culture and team,” according to Business News Daily. With that being said, trying out some of these retention strategies can help you see less turnover and higher profits:

1. Make sure you’re offering competitive pay and benefits

As we previously discussed, one of the main reasons employees quit their jobs in 2021 was due to poor salaries and wages. Forbes reminds readers that they’re spending their time working for money they need to pay their bills, keep a roof over their heads, take care of their kids, save for retirement, etc. Ensuring that their compensation reflects how much their valuable time is worth will help ensure they don’t find another company that will. With the poor state of our current economy and inflated prices, it’s more important now than ever that their compensation is both fair and able to keep up with the cost of living. 

It’s also important to keep in mind that, as their expertise, list of responsibilities, or seniority increases, their pay should increase, too. To successfully offer fair pay, you need to know both what the current cost of living is in your area and what your competitors are offering their employees. If you’re feeling anxious about how much more you might need to start paying your employees, keep in mind that it’s much more costly for you to stay in this pattern of high turnover. 

2. Provide your employees with more flexibility

Flexibility can mean a variety of things, each important to the job satisfaction of your employees. This can include allowing them to work from home as needed. Not only does this allow them to cut down on gas expenses and commute times, but some people actually work better from the comforts of their home office. In allowing them to work from home, you’re also giving them the opportunity to work according to their own schedule. Morning people may prefer a 5 am-3 pm schedule whereas the night owls might want to work from 5 pm-3 am. 

This can also mean being more accommodating to when people come into the office and when they leave. Some workers may be parents who can’t come in until they’ve dropped their kids off at 8:00 am for school. One more thing to consider is that recent studies have shown that shorter work weeks and shorter working days actually contribute to increased productivity and retention. 

3. Maintain a focus on work-life balance

To build off of flexibility, employees are much more likely to continue working for a company that values work-life balance. Sage informs us that some ways to support a healthier work-life balance include:

  • Offering your employees more working flexibility
  • Making sure your employees are taking breaks throughout their workday
  • Focusing on productivity over the number of hours worked
  • Taking the time to ensure your employees’ workloads aren’t too much
  • Encouraging your employees to use their paid time off
  • Making sure both moms and dads are getting the support they need from you to take care of and enjoy time with their families (kids are only young once)
  • Remembering that no two employees are alike and everyone is going to have their own needs and idea of what constitutes a good work-life balance

In addition to your employee’s work-life balance, you should also be focusing on your own as well. A good work-life balance fosters better management and more happiness within your workplace. 

4. Have your employees doing engaging work

Bored employees are unhappy employees. If your employees aren’t participating in work that’s challenging or that they enjoy, they end up falling into patterns of malaise. Not only is this bad for morale, but it lowers productivity, too, and increases the chance that they will leave and find more engaging and exciting positions. So, the trick is to ensure that every one of your employees is highly engaged on a daily basis. 

According to BDC, you can do simple things like showing your employees recognition for a job well done with verbal praise or even with something like a gift card or certificate. You can also schedule team activities that will help your employees connect with one another and boost morale. You can even go as far as to let your employees try out other roles in the company temporarily for a change of pace and provide your team members with opportunities to build up their expertise and continue their training and education. 

5. Provide transparent opportunities for growth and advancement 

Many employees are going to want to know they have a path for growth within your company. This not only means laying this out for them during the interview process but also ensuring that your team is aware of opportunities that are available to them as they come up. Instead of a new, outside hire for an open management position none of your team members know about, is there someone already in your company that could be a good fit? 

Some other things you can do to ensure your employees have room for advancement within your organization are to have an interest in what their goals are, provide them with “training and development” opportunities, and put together a “succession planning program” for those who show interest in or potential for moving into a leadership role somewhere down the line (Robert Half Talent Solutions). 

6. Ensure your team members feel like you value them

Employee recognition is a great way to boost, not only your retention rate but your company culture and morale, too. Around 80% of workers in the U.S. reported that they didn’t feel appreciated or recognized for their work within their current position and, conversely, a study showed that “companies that prioritize recognizing their employees multiple times per month are 41% more likely to see increased employee retention and 34% more likely to see increased employee engagement.” Some ways you can do this include:

  • Public/social efforts of recognition for work (in front of the office or via social media)
  • Monetary means of recognition (raises, bonuses, gift cards, certificates)
  • Additional PTO
  • A better parking space
  • Bring in food to reward your employees for a hard week of work or just to simply show that you appreciate them
  • Remind them their job matters to the success of the company and why

Find more ideas here.

7. Create a positive and inclusive work culture

If you’re not really even sure what “work culture” is, Built In informs readers that it “encompasses the values, beliefs and attitudes that guide an organization.” It will also set “expectations for how employees should behave and interact with one another as they perform their day-to-day responsibilities and contribute to the company’s overall mission.” Without a good culture for your employees, they likely won’t be aware of the bigger picture as to why you want them there and there may even be a toxic environment for your employees to work together in. 

Things you can do to have a better work culture include:

  • Ensuring goals are made clear to each of your employees at every level
  • Work to have respect as a main priority whether it’s leader to leader, employee to employee, or leader to employee
  • Create a safe space and set a “zero tolerance policy” so everyone knows bullying, harassment, and other forms of aggressive behavior aren’t welcome
  • Keep stress low by allowing for moments of “lightheartedness”
  • Make sure your company’s mission, vision, and values are clear and known to everyone in your organization
  • Curate a culture that’s diverse and welcoming to people from all backgrounds
  • Ensure your employees are receiving appropriate recognition for their work
  • Be open to feedback from your employees and actually use it when appropriate
  • Make sure you’re successfully promoting work-life balance for everyone 

8. Do what you can to prevent employee burnout

Forbes goes onto note that common reasons employees feel burnout are due to treatment they feel is unfair, an overwhelming workload, poor managerial communication, inadequate support, and deadlines that aren’t realistic. It’s been previously believed that burnout can be solved by taking a few days off and coming back in feeling refreshed. However, recent studies have shown us that’s simply not the case. While employees may feel better after some time away from their work, the problems that caused them to feel burnout are still there when they return. 

The same article notes that there are several ways you can prevent burnout including providing better employee engagement, recognition, job flexibility (less hours, remote work, better scheduling), work culture, transparency, communication, and rewards.

9. Focus on having a well-received management style

A study done in 2018 told researchers that roughly 50% of people quit because of poor management styles from their leaders. Hubspot discusses 4 management styles you should aim to have and 4 that you want to avoid. Desired management styles include:

  • Visionary management – provides their teams with clear communication and visions that they should be working toward and properly motivates employees to achieve them 
  • Democratic management – makes room for their employees to participate in making decisions and strives to function as an efficient team
  • Transformational management – focuses on innovative ways to change and grow for success and push and challenge their employees to succeed beyond their comfort zone
  • Coaching management – operates similarly to a coach who is always working to teach their employees something new, grow within their profession, and stick with them through the highs and lows of their work

Conversely, the management styles you want to avoid include:

  • Autocratic management – utilizes a top-down approach without much input from others
  • Servant management – so focused on their positive relationships with employees that they tend to neglect performance and avoid confrontation
  • Laissez-fair management – keeps an eye on their employees’ performance but has a hands-off approach to their management style
  • Transactional management – relies heavily on extrinsic rewards to motivate their team, which loses its effect over time 

10. Have a thorough hiring process

While you don’t necessarily want to drag out the hiring process, you’ll want to ensure you’re hiring someone who understands your company and is in line with your culture, values, mission, and vision. Creating that clarity and making sure they fully understand what you and your organization are all about will ensure they know what they’re signing up for and that they won’t jump ship soon after you onboard them. The fewer surprises the better! Check out this link for helpful tips on getting the right employees for your company. 

The takeaway

We’re not here to tell you that managing a team of employees, no matter how big or small, is easy. Being a good manager is hard and doesn’t oftentimes come naturally to people. It’s something that most of us have to work for.

Following these tips can not only help you create a better working environment for you and your employees, but it can help you avoid the costly consequences of having a high turnover rate.