February 15, 2023

Employee Retention Strategies & Benefits (2024)

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In 2020, the COVID-19 pandemic kicked off a wave of resignations that lasted for many months and only grew as time went on. More than 50 million workers quit their jobs in 2022, besting the previous turnover record that had been set the previous year. This led one economist to call 2022 “the real year of the Great Resignation.”

While the turnover rate finally seems to be slowing down, there’s no denying that the Great Resignation normalized job hopping to an unprecedented degree. Employees have fewer hesitations about switching jobs if it means a bigger salary, better perks, and more career advancement opportunities. This means employers need to be more proactive than ever before about retaining talent, preventing turnover, and improving employee happiness.

Why should employers prioritize employee retention?

First of all, hiring new employees is not just time-consuming, it’s also expensive: It can cost between one-third and two times someone’s salary to find a replacement. In most cases, it’s significantly more cost-effective to keep an existing employee, even if it means giving them a raise.

When one worker quits the team, the remaining employees have to pick up the slack, which puts more stress on them. If your company has a lot of employee turnover, that can negatively affect employee morale, engagement, and job satisfaction. It might even trigger a cycle of quitting that ripples throughout your ranks.

When a veteran employee quits, both their team and the company lose all that employee experience and knowledge. Even if you find a qualified candidate to replace them, new employees also require a lot of training and time to get them up to speed. On the other hand, better employee retention will lower turnover and boost team performance, productivity, and efficiency, which all contribute to better revenue.

Reducing turnover also improves the experience of customers, clients, vendors, and other third-party partners. After all, nobody wants to talk to a different inexperienced rep every time they contact your customer service department to get an issue resolved. Increasing your retention rate ensures continuity and helps employees build the skills and knowledge they need to quickly assist customers and clients.

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What are the most effective employee retention strategies?

There are several tactics you can implement to retain staff and reduce employee turnover. These include: 

  • Offering competitive compensation packages.
  • Providing the opportunity for career advancement.
  • Investing in employee growth and development.
  • Engaging in two-way feedback.
  • Training leaders instead of managers.
  • Fostering a positive company culture.
  • Encouraging employee input and initiative.
  • Facilitating employee recognition.

Offer a competitive compensation package

Bigger salaries and better benefits are among the top reasons people quit their jobs and look for new positions. If your company can’t seem to get a handle on turnover, take a look at your compensation strategy to see if your package is on par with competitors in your industry and geographic area.

You should also make sure you are offering substantial raises often; simply keeping up with the cost of inflation won’t be enough to stop employee turnover if they can get a 10–20% pay bump by switching jobs.

Provide the opportunity for advancement

Promotional opportunities tie into salary bumps, but the retention rate runs far deeper than that. Many employees, especially those early in their careers, are looking to quickly build their skills and gain new industry knowledge. If they are trapped in the same position with no chance for lateral or upward movement, then they will have no choice but to job hop to another company in order to gain that experience. Providing a clear path for advancement with estimated timelines will incentivize employees to stick around.

Invest in employee growth and development

A sense of growth and development is vital to job satisfaction and engagement, not to mention building the skills necessary for a promotion. If employee development isn’t supported by the organization, they’ll start to look elsewhere.

This means meaningful learning and development initiatives are non-negotiable for staff retention. Supervisors should also act as career coaches to help employees prepare for the next step.

Engage in two-way feedback

Retaining talent and improving employee satisfaction starts with finding employee pain points early on. Don’t wait for an exit interview to discover why voluntary turnover is happening.

Identify what’s behind employee frustrations through anonymous employee surveys, direct feedback in one-on-ones, and other employee engagement strategies. Leverage this feedback to find out what would make an employee decide to stay, and work together to make it happen.

Train leaders, not managers

Good leaders make sure their teams feel safe enough to offer their opinion without punishment. They prioritize listening before talking (e.g. listening to an employee’s frustrations before defending the organization’s choices).

Leaders should also create an open rapport with employees. This doesn’t mean blurring professional boundaries, but it does mean empathizing with each individual employee. This extends to understanding employees’ expectations for benefits and pay, too.

Foster a positive company culture

A toxic company culture will send current employees running for the door, while a positive workplace culture is an employee retention strategy. To start, you need to create a sense of trust with workers, so they feel safe disclosing employee dissatisfaction.

You also need to encourage clear communication across all levels of the organization and implement tools to support that goal. If you have a couple of poor performers who bring the team down, then you might need to let them go, so you can build a healthier workplace culture from the ground up.

Encourage employee input and initiative

Innovation and creativity only flourish in environments that support risk-taking and a spirit of “intrapreneurship.” Sadly, most workplaces are more focused on preventing mistakes.

Instead, build your culture around learning. When a risk doesn’t pay off, employees should feel empowered by the experience and have the confidence to keep trying new ideas. The environment should welcome out-of-the-box thinking and input from all employees instead of only managers.

Offer employee recognition

All too often, companies focus on what employees can improve and ignore employee success, which is the opposite of an effective retention strategy. Taking time to praise employees for their accomplishments and hard work—both in private performance reviews and in public team meetings—will show them that you’re cheering for their wins instead of only dissecting their mistakes.

Also Read: Employee Recognition Software Guide

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What tools help with employee retention?

You don’t have to implement these employee retention strategies in a vacuum. There are plenty of tools available that can help your human resources (HR) team start an employee retention program and improve the employee experience.

Payroll and benefits administration software

Payroll software provides insight into compensation data to help HR teams ensure the business’s compensation strategy is competitive and raises are being offered regularly. Meanwhile, employee benefits administration software can help identify which employee benefits are most popular and which are underutilized.

Performance management software

Performance management software helps managers and employees work together to set and track goals and have more regular performance reviews. They also help supervisors identify high performers who deserve a raise or bonus.

Learning and development systems

Supervisors can help employees gain new skills and prepare for a promotion with employee training and professional development resources. Learning management and development systems make it easy to create internal training programs and then assign them to employees to complete.

Employee engagement software

Employee engagement software doesn’t just allow you to show your appreciation for employees and recognize their achievements; it also makes it possible to gather employee feedback about what they think will make the company better. Your company can use this information to make positive changes that will keep employees engaged.

Ready to find some tools that can help your company retain top talent? Explore top solutions in our HR Software Guide.

Featured employee recognition partners

1 Kudoboard

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Enjoyed by tens of millions of people, Kudoboard streamlines employee recognition and engagement by providing fun features that connect and give gratitude that’s felt — not just received. Kudoboard is focused primarily on fostering authentic connection and recognition. Known for being fun and easy to use, Kudoboard has powerful features and integrates with over 300 other platforms. If you want to boost morale, connect and celebrate employees, Kudoboard is the right choice.

Learn more about Kudoboard

2 Cooleaf

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Cooleaf is a streamlined employee recognition software that uses data to help manage performance. Multiple integrations allow you to instantly send recognition from the apps you use most.

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3 Workstars

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Make work rewarding and deliver a sustainable boost to your employee engagement strategy with Workstars' integrated social employee recognition and reward platform.

Learn more about Workstars

Browse all employee recognition software →

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