Employee retention strategies are important in business because they help you reduce employee turnover. When you hold onto your people, you improve business performance while minimising the time and costs involved in hiring, onboarding and training new staff.
What is an employee retention strategy?
An employee retention strategy is a plan you put in place to keep your staff working for you longer.
Why use employee retention strategies?
Employee retention strategies will help retain staff, which minimises the costs related to staff turnover. You boost your business performance and bottom line when you don't have to spend time and money on hiring, onboarding, and training new recruits.
10 employee retention strategies
The ten employee retention strategies listed here are best practices for keeping your team as long as possible.
1. Offer competitive salaries and benefits
Offering competitive salaries and benefits is the first and most obvious retention strategy. It shows that you value your employees' time and work and will make it harder for competitors to poach them. You can base your compensation strategy on job descriptions, average market rates and employee performance. You can also include other incentives like additional leave days, flexible working arrangements, shares, health insurance or other perks.
2. Ensure your hiring and onboarding process is sound
Ensure the hiring and onboarding process is sound to set the tone for your employee experience. For example, MYOB Business’ employee self-onbarding streamlines the process for your company and new hires.
A structured, engaging and informative process shows new recruits that they're valued and will be cared for. It also helps instil company values and gets them settled in faster. When your people feel connected to the company and their colleagues and set up for success, they're more likely to be engaged, productive and loyal.
3. Develop a company culture employees want to be a part of
A company culture that employees value is a crucial employee engagement strategy that can dramatically impact how long each person stays. One study of Australian and New Zealand workers said a non-supportive culture (27%) and stressful working conditions (26%) would drive them to quit. For 30% of respondents, a culture that champions diversity, equity, inclusion and mental health are key reasons for staying.
4. Encourage communication
Encouraging internal communication and collaboration can help your people feel more connected to their colleagues and managers, better understand their roles, and increase job satisfaction. It also helps spot and solve any issues that could lead to employees resigning.
Working from a business management platform can make it easier for your teams to communicate and collaborate with real-time visibility of what’s happening across your business. This keeps teams better connected, informed and empowered to do their jobs.
5. Offer professional development opportunities
Offer professional development opportunities – employees are putting more importance on this when considering how long they may stay with a company. An Australia & NZ study reported 42% of respondents thought companies could improve in this area.
6. Provide flexible work schedules
Flexible work schedules have become the new normal post-COVID – 71% of employees in the Australia and NZ study saw this as a top factor in staying with a company. Along similar lines, a 2021 Gartner survey suggested that banning work from home could see you lose a third of your team.
To make it easier for your people to work from anywhere, consider moving to the cloud and investing in cloud-based business management software.
7. Provide wellness offerings
Wellness offerings like fresh fruit in the office, a safe, healthy workplace and a generous sick leave policy can show you value your people and their well-being.
8. Train quality leaders
Training quality leaders can support employee retention. When your team members trust their leaders and feel their thoughts and contributions are valued, they're much more likely to stay. Almost a third of respondents (28%) cited the quality of management at their workplace as a reason for remaining.
9. Recognise achievements
Recognising achievements can lead to better employee retention. According to one report, if you can get employee recognition right, your people are x5 more likely to see a future with your company.
10. Offer mentorship programmes
Mentorship programmes are often overlooked but can be very helpful in reducing employee churn. Mentoring means you build a talent pipeline, grow mentors, and foster a culture of collaboration and innovation – mentee retention rates are also likely to be 50% higher than those who haven't been mentored.
When you have the right software to help you run your business smoothly and efficiently, you can free up capacity to spend more time with your employees on training, development and mentorship.
Employee retention strategy FAQs
What are the four pillars of employee retention?
Four pillars that underpin any strategies you implement are:
Rewards and recognition to ensure your people feel valued for their work
Training and development to keep your people engaged with and growing in their careers.
Open communication and transparency that promote a sense of community and belonging.
Hiring practices and ongoing training that promote diversity and inclusion.
What's the most effective method of employee retention?
The most effective employee retention method is building an exceptional company culture. Doing so promotes many elements that contribute to employee retention, including good management, job satisfaction, clear communication, employee well-being and more.
What is the first step to retaining employees?
The first step to retaining employees is to review your overarching retention strategy, ensuring that it considers career development, rewards and recognition, working arrangements, workforce management and the employee experience. To help with this, make sure you have good HR metrics on hand so you can easily measure the success of your strategy
Put your attention to retention
Keeping, rewarding and upskilling your employees isn't just great for productivity – it also means you avoid the time, money and disruption of hiring and onboarding new team members. That's why an employee retention strategy is vital to business performance and long-term success.
MYOB's business management platform can make this simpler. Streamlining backend processes improves communication and efficiency while removing frustration to boost employee experience and free management to invest in retention activities. Real-time reporting also ensures you have the data you need to continuously measure and improve your strategy.
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Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.