HR employee retention strategies: 14 tactics that work

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Recruiting top talent is a huge accomplishment for any business leader. But unless you have a strategy for retaining those talents, your efforts are more or less pointless.

Efficient employee retention strategies help you keep those important employees. The 14 approaches below also increase your ROI for each recruit. How? By delivering cost savings and reducing the wastage of resources in constant hiring.

This guide explores some effective strategies that can encourage employees to stay. You’ll learn what top companies such as Zapier, Canva, Zappos and Deloitte are doing to reduce employee turnover rates.

Table of contents
What are employee retention strategies?
Why are employee retention strategies important?
What are the top reasons employees leave an organization?
14 employee retention strategies
Frequently asked questions

What are employee retention strategies?

Employer retention strategies are deliberate practices a company uses to reduce or prevent employee turnover. These may include practices and programs that cater to employee needs. For example, personal development, career growth, or job performance needs.

Several theories exist around employee retention programs. But why bother about theories? Well, learning about these theories can help you develop more effective retention strategies.

One such theory is the Barnard-Simon theory of organizational equilibrium (TOE).1 This theory suggests that employees will likely stay in a company if they feel they’re getting enough compensation for their effort.

Another concept is the Human Capital Theory.2 This concept reveals how employees who receive training and development become more valuable to the organization. Such employees are more likely to stay with your company.

The following sections will show you how these theories play out.

Why are employee retention strategies important?

Employee retention strategies help you create a supportive and welcoming work environment. This is one way to cater to your staff’s mental well-being and emotional stability.

These strategies go beyond keeping employees happy and engaged in their work. They also involve supporting your employees' physical health. For example, having exercise and relaxation facilities in the workplace.

But it doesn't stop there. A company that cares about employee well-being shares resources for healthy living. For example, you may share resources about managing stress or eating well. This can empower remote employees to live healthier lives away from the office.

Essentially, employee retention focuses on creating a culture that encourages wellness and growth. This, in turn, leads to better employee engagement and a desirable level of commitment. And when employees are happy, they’ll want to stay and help the company grow.

What are the top reasons employees leave an organization?

The Harvard Business Review looked at voluntary employee turnover.3 They shared several reasons that influence employees to leave.

Unclear expectations

Employees should be well-informed about the expectations of their current roles. Otherwise, they are likely to become disengaged. Disengaged employees4 may exhibit decreased productivity, increased absenteeism, and eventually leave.

Always communicate job expectations, and do this during the onboarding process and throughout the employment period. Also, involve your employees when making any changes to job expectations that may be required during their employment.

Job role mismatch

Placing employees in roles that don't fit their skills can make them dissatisfied. It's also likely to happen when they don't have an interest in the tasks you assign to them. This can lead to turnover, so consider each employee's skills and interests when making hiring decisions to avoid it.

Too many procedures

Having too many procedures or processes may hinder employee productivity. This can also make their job functions draining and frustrating, which leads to employee dissatisfaction.

To prevent this, streamline your processes and procedures as much as possible. This means eliminating unnecessary steps/bureaucracy, automating repetitive tasks, and documenting all processes.

14 employee retention strategies

Let’s explore some innovative employee retention strategies you can adopt.

1. Start with onboarding

The onboarding stage sets the tone for the employee’s stay at your company. According to Zippia,5 organizations with solid onboarding processes increase retention by 82%. Here are some practical ways to spice up your onboarding process:

Hands-on training programs and workshops

Intuit6 uses an intensive training program. The program not only familiarizes new recruits with the company culture, it also gives new hires a broad perspective on their roles.

Like Intuit, training programs can help you ensure that new employees are engaged with the learning process, making it more interesting for them. They’ll also become more aware of their abilities to deliver on the job.

Pairing new employees with existing employees

Zapier7 adopts a buddy system called the “Zap pal” program, which pairs new hires with more experienced employees. This helps new employees learn about the company culture and quickly build relationships with teammates.

Welcome videos

A good example is the “This is Zendesk” video.8 The purpose of the video was to give potential and new hires a glimpse into what working at the company would be like.

An engaging welcome video is a good opportunity to equip new hires with a positive mindset about your work environment and employee morale. Showing them they have something amazing to look forward to allows them to be more open about their experience in your workplace.

2. Benchmark your team and offer competitive base salaries or hourly wages

Offering competitive salaries is vital if you want your employees to stick around. You must compare what you pay to what other companies offer – this is benchmarking.

Why benchmark? In a job market where candidates have more options, employers need to be more transparent. Employees also need to know that you value their work and respect industry compensation standards.

Employees are more likely to stay when they know they’re receiving fair compensation. A 2022 report9 by Beqom reveals that 60% of US workers would leave their current company for one with more pay transparency.

In a transparent model, employees know the salary ranges for their positions. They also know the factors you considered when setting their salaries. For example, do they need to occupy critical roles? Should they have more skills or experience?

To achieve this transparency, consider publishing your company's salary information. Do this where employees or potential recruits can see. That’s what Buffer10 does.

Share salary ranges with your job postings. Also, allow employees to discuss their salaries with each other. Such openness gives them the confidence that what you’re paying is adequate for their roles.

3. Invest in the whole person

Develop an environment that nurtures high-performers by investing in employees. Schneider Electric11 is an example of a company that knows its employees are a valuable asset. It adopted an AI platform that allows its employees to find internal opportunities that match their skills and individual career goals.

Amy deCastro,12 Schneider Electric’s HR vice president, says that Schneider sees an employee “not just as a means to profit but as a whole person.” This is the ideology to have in today’s employment space.

Three notable areas you want to invest in are skills, well-being, and opportunities. That means you shouldn’t focus solely on the areas that have a direct impact on the company’s bottom line, for example, investing in employees’ training alone. Instead, see the whole person and go out of your way to support their overall well-being and development.

Making an effort to improve your employees' overall growth creates a loyal relationship. It also leads to increased employee retention and a lower cost of recruiting.

4. Understand your team's work styles and communication preferences

You can improve work relationships by understanding your team. More specifically, pay attention to their preferred work styles and communication methods. This helps when discussing project requirements, resolving conflicts, and prioritizing tasks.

Fingerprint for Success (F4S) makes it quick and easy to understand your employees’ work styles. For example, Canva has benefitted hugely from F4S’ people analytics. The insights have helped the company create an inclusive and diverse work culture.

Here are some key items you need to determine:

  • Affinities – common interests and shared values among your employees.
  • Differences – unique perspectives and skills that team members bring onboard.
  • Culture – prevailing practices within your team. For example, values and norms.
  • Benchmarks – the quality of an employee’s performance compared to your organization’s established standards.

Invite your team to take the 30-minute assessment on F4S.

You’ll understand your teams’ work styles and communication preferences, which will help you create an inclusive culture. Each individual employee will feel heard, valued, and respected, and the assessment reveals unique opportunities for growth.

F4S team dashboard shows team work style preferences

5. Offer professional and personal development

Professional and personal development are major drivers of employee retention.

According to LinkedIn’s 2023 global talent report,13 companies with employees who learn on the job have higher retention rates. In fact, they have an almost 7% higher retention rate within a 3-year mark.

So, how do you contribute to your team's professional and personal development opportunities?

  • Start with regular performance reviews and employee surveys. This will help you identify skill gaps that you can fill.
  • Encourage employees to maximize the employee training platforms you provide. For instance, you can run special recognition programs. Or, offer incentives for those who complete their training within a specific time period.

The talent development program from F4S can help your employees improve their skills. F4S provides personal coaching based on the unique motivations and goals of each team member. The rapid coaching programs are supported by both AI and human coaches.

Additionally, a thorough employee assessment helps you identify your talents' blind spots or skill gaps. Not only that, it also shows you each individual's preferred learning methods.

In essence, F4S reveals what you need to focus on within your workforce and how to best address it. It then guides you through the process with accessible and effective personalized coaching programs.

6. Leverage performance management software

To further improve employee retention rates, you can use performance management software to support your existing strategies. For example, tools such as BambooHR or Zoho People let you track and manage employee performance. Here’s how this helps:

  • It streamlines your performance review process. These tools provide real-time data for tracking employee productivity.
  • It enables frequent communication and continuous feedback. For example, scheduling regular check-ins or sharing updates.
  • You can also set well-defined goals based on feedback from employees.

To illustrate this, an Allied health company needed to improve employee performance after a recent acquisition. Diane Gatto, a change manager and business coach, took to F4S’ assessment program to identify the causes of performance declines.

One of the things that became apparent from the results was that ‌some employees needed a detailed description of projects to perform better. The company transitioned to providing more detailed debriefs to fix this.

This is just one way ‌performance management software can help your organization strengthen its employee retention efforts.

Take the free F4S assessment and set up your team.

Find out how F4S can improve employee retention at your workplace, understand individual team members' motivations, and uncover potential blindspots at your company.

Accelerate understanding between teams

Breadth

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Motivated by macro big picture thinking, these teammates value moving quickly to connect dots between abstract ideas to 'get the gist' of things.

Chart showing rage from Average, High and Ver High.

vs

Depth

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These teammates value being concrete and specific, getting into details to understand the steps or tasks required.

Chart showing rage from Average, High and Ver High.

See the different work styles in your team

Take the free assessment & set up your team

7. Create a culture that employees want to be part of

The ideal company culture promotes inclusiveness. It also encourages employees to be the best version of themselves. This happens when you create an environment where employees feel safe and respected.

No doubt, people will want to be part of an organizational culture that supports them. So, how do you create one? Start by promoting inclusion.

An attractive work culture is achievable when you understand your team dynamics. Ensure you are well-informed about factors including gender, race, and socioeconomic status, and know how they influence employee behavior.

With the F4S culture map, you can take a deep dive into understanding your employees. Canva used this to gain a detailed understanding of its staff — the culture map identified blind spots, work motivations, and potential causes of friction or conflict. With this, the company was able to facilitate an inclusive workspace by encouraging employees to find ‌common ground while celebrating individual differences.

Promoting an inclusive workplace culture also means educating your employees about the benefits of a positive and accepting workplace. Help your employees ‌see how individual differences can potentially contribute to attaining your corporate vision.

Putting inclusion at the core of your employee retention strategy is essential, not only in retaining top talent but also in helping them see how meaningful your business' work environment can be.

8. Hire for the cultural fit

An effective employee retention strategy does not focus on the current employees alone. You must also think about the potential new hires. Do they fit with your existing organizational culture?

It’s important that new hires can adapt to your corporate environment. This means hiring candidates who are more likely to fit into your company culture. You can use F4S to match new hires to your existing team culture during your hiring process.

F4S provides insights such as each new hire’s growth potential and preferred work styles. These insights help you identify how well new employees will fit into your team.

That said, don’t be afraid of cognitive diversity when hiring new employees. Cognitive diversity refers to the different ways people process information or make decisions. Cognitively diverse teams are more likely to achieve better outcomes than homogeneous teams.14 Diverse teams are also more creative as they approach problem-solving in different ways.

9. Create an emphasis on teamwork

A Stanford study by Carr and Walton15 revealed that working with a team can produce higher engagement rates and success levels.

Henry Ford,16 in his automobile company, favored teamwork and considered it “a driving force of business development.” With a cross-functional team, Ford employees from different departments and disciplines often work together on projects to bring new products to market and improve existing products.17 This means everyone has a stake in the success of a project and that ideas are shared and considered from all angles.

It’s not surprising that a study on team collaboration18 found that employees feel more engaged when they work on projects together.

So, foster teamwork by breaking silos and adopting collaboration tools such as Trello and Slack. Set clear project goals so your teams can take a focused approach to meeting project needs. You should also encourage team members to reach out to colleagues when they encounter challenges.

10. Focus on managers

Leadership development is another effective way to spur employee retention in your organization. The goal is to ensure managers can relate with employees in an effective and positive manner.

Well-trained managers know how to build positive relationships with team members. They also know how to motivate and build on the strengths of their team. This results in higher levels of productivity and employee retention.

Research19 shows that employees who have positive relationships with their managers are more likely to commit to work.

Focus on equipping your managers with essential leadership skills. These skills cut across emotional intelligence, effective communication, conflict resolution, and strategic thinking.

Provide workshops and coaching programs for your managers to broaden their management skills. You can also provide mentorship programs and opportunities to better equip your managers — both senior and mid-levels.

11. Recognize and reward your employees for their work

Employee recognition is an effective way to encourage top performance in your organization. In fact, 81% of employees say they’re motivated to work harder when they receive recognition for their jobs.20

Simple gestures such as expressing gratitude and acknowledging a good job are helpful here. Verbal recognition, thank-you notes, and public appreciation at team meetings are also great at boosting employee motivation.

Zappos,21 for example, adopts an employee recognition program that’s based on peer-to-peer reviews. Every employee gifts US$50 to another employee, every quarter, for a job well done.22 Practices like this can help foster positive work relationships, making employees feel valued and recognized.

Some other effective reward systems include:

  • Employee of the month/year programs.
  • Performance-based bonuses.
  • Monetary incentives.

These tangible rewards serve as motivators and promote positive behavior and performance. You can also tailor rewards to suit individual preferences and interests – for example, giving personalized gift cards. Such efforts from you can make your culture of recognition even more meaningful.

12. Create pathways for growth

Creating pathways for growth allows employees to see clear opportunities for career advancement. This sense of growth and progress is a powerful driver of employee loyalty. Also, employees will be more likely to exhibit motivational traits and stay committed.

You can support employees' career growth through internal job postings and promotions.

Take Deloitte, for example. The company’s global initiative involves selecting top-performing employees for international assignments23. There’s also an opportunity for employees to advance to higher positions. This shows employees they can continue to grow within the organization.

Be sure to inform your employees about career advancement opportunities or pathways for recognition in your company. Give them the necessary details about the steps or requirements – for example, working with your company for a specific period of time, or gaining a new skill.

13. Provide wellness offerings

Wellness offerings build a positive and caring work culture, and prove your commitment to employee welfare. You also ensure that employees are in a comfortable and healthy position to work‌ in.

Here are some essential wellness offerings to consider:

Offer flexible work

Flexible work schedules and arrangements allow employees to adopt a healthy work-life balance. It helps them structure their work around personal needs or commitments. For example, Appen24 offers flexible work positions that are home-based and part-time. This flexibility allows employees to experience less stress and better job satisfaction.

Prioritize hybrid and remote options

If possible, allow employees to work from the office, or home, or use a combination of both. This helps your staff by reducing commute stress, which contributes to employee burnout.

Avoid burnout by focusing on employee wellness

Promote employee wellness initiatives that prevent or help employees recover from burnout. Focus on stress management and relaxation, and encourage employees to take breaks and provide resources for mental health support.

Also, consider team-inspired wellness programs such as paid vacations and company games to improve employee satisfaction rates.

14. Build employee engagement

Employee engagement25 is vital in encouraging job satisfaction and retention. Engaged employees are more enthusiastic about their work. This translates to higher levels of job performance and satisfaction.

One way to enhance employee engagement is by creating systems that help your staff manage their daily operations. This ensures that employees' job demands are not overwhelming.

You can run daily huddles or hold periodic meetings. Let your employees use these sessions to discuss deliverables and possible hindrances. These meetings can help employees stay focused, collaborate better, and track their progress, while offering informal opportunities for employee feedback.

Frequently asked questions

What are the benefits of employee retention strategies?

Effective employee retention strategies encourage your workers to get involved with their jobs. They can also improve job satisfaction and promote a positive work culture. Some of these strategies include employee training, professional development, and teamwork.

How can I measure the effectiveness of my employee retention strategies?

To measure the effectiveness of your employee retention strategies, look out for factors including employee turnover rates, employee engagement, and employee satisfaction. Your strategies are working when turnover rates are low, but engagement and satisfaction are high. You can get this information by conducting anonymous employee surveys in your company.

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  25. CIPD. (2021). Employee engagement: An evidence review. Available at: https://www.cipd.org/globalassets/media/knowledge/knowledge-hub/evidence-reviews/employee-engagement-scientific-summary-1_tcm18-89565.pdf
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