Learning & Development

Retention Fundamentals: What Makes Employees Stay?

High turnover is a cost most employers seek to avoid. Yet, societal norms have changed such that it’s quite normal for individuals to change jobs every few years. An unhappy employee is more likely to move on, of course, so employers have incentive to do what they can to increase retention levels—reducing their own costs and maintaining productivity.

But what can employers do? Obviously, there can be times when an employee is just not a good fit no matter what the employer does, and sometimes an employee will move on even without being dissatisfied. But in many other cases, there are a lot of actions an employer can take to reduce turnover and encourage more employees to stay. Employers can work to cultivate a culture that encourages loyalty.

What Can Employers Do to Increase Retention?

Thankfully, there are quite a few things employers can do to cultivate loyalty. These tasks are not always simple, but they can reap great rewards in terms of employee satisfaction, employee morale, reduced turnover, and increased productivity. Employers can:

  • Start with the hiring process. Find employees who are a good fit with the culture of the organization. This elusive “fit” is a key factor in retention. Good cultural fit reduces the likelihood of losing the employee later.
  • Work hard to cultivate a culture that shows that you value employees. If they feel valued they will be more likely to value their employment in return.
  • Continually monitor employee satisfaction levels and, more importantly, take action to improve areas of dissatisfaction. For example, if you conduct an employee engagement survey, act on the results! Another way to gain insight is to talk with employees who leave to see what you could have done better.
  • Focus on employee development opportunities that are personalized with individual goals in mind. Create individual development plans if they don’t already exist.
  • Effectively set short-term goals for employees. Ensure that goals are clearly communicated and not constantly changing (in other words, don’t move the goal post).
  • Provide training opportunities and clear paths to advancement. Help employees reach their goals by providing training, mentoring, and teambuilding opportunities. Get to know employees personally, and know their goals and what drives them.
  • Offer multiple different career paths, if possible. Not everyone wants to climb to CEO; some would prefer lateral moves.
  • Offer flexible working options to accommodate differing needs and priorities.
  • Give employees responsibility—as much as they can handle—and recognition for work done well. Provide continual feedback to let employees know how they’re doing. Ensure employee efforts are being recognized often through pay, rewards, or formal recognition programs.
  • Be consistent in dealing with employees, ensuring that employees don’t feel there is a culture of favoritism nor a culture in which problems do not get addressed.
  • Have open, clear, continual communication, which makes employees feel like a part of the team. Tell them what’s going on with the organization so they don’t feel left in the dark.
  • Listen to employee ideas and take them seriously. Treat everyone with respect, and find ways for employees to have their ideas heard and considered.
  • Get rid of any bad apples in the organization. One sure way to bring down morale is constantly subjecting good employees to poorly performing coworkers and/or bad managers. Don’t hold on to bad employees for too long; doing so will only bring negativity, reduce morale, and often result in the loss of more than just the bad apple.
  • Show employees they’re trusted.
  • Provide an appropriate compensation and benefits package. Consider incorporating things requested by employees, such as gym memberships or on-site child care. Ask employees what they would value.

What other items would you add to this list? Which types of programs or policies have you found to have the biggest positive impact on morale and retention?


About Bridget Miller:

Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.