Employee Retention Ideas To Help Foster Long-Term Company Success
- Human Resources
6 min. Read
Last Updated: 02/07/2023
Table of Contents
Nearly half of the business leaders shared that hiring and retaining good employees is the top operational challenge they are currently facing. Roughly half of the companies with 10 to 500 employees expect attracting and retaining quality talent to become more challenging in the next 12 months.1
With retaining good employees being a top challenge for many businesses, accessing new ideas for holding onto employees can help keep top talent from walking out the door while also maintaining business productivity.
Why Do Employees Leave?
The loss of a valuable employee can trigger a cascade of negative impacts. Other employees may be required to pick up the extra work until a replacement is found, which can ripple into feelings of resentment and anxiety for staff. The departure may also spark uncertainty and doubt among other staff members regarding their own sense of security within the organization. There are many reasons for employee departures, and understanding why individuals leave is key to helping others stay. Chances are high that an exit interview may reveal one or more of the following concerns:
- Stagnant wages or inadequate compensation.
- Limited path forward for advancement and career growth.
- Unhappiness with management or coworkers.
- Feeling unappreciated and lack of recognition.
- Dissatisfaction with company's health, direction, or culture.
- Boredom, or feeling stuck or overlooked.
- Job role isn't as expected.
- Seeking an improved work-life balance.
- Desire to make a change.
It's impossible to fully eliminate employee attrition but you can encourage workers to stay by focusing on employee retention and its advantages.
Why Is Employee Retention Important?
Among the many benefits of employee retention, loyal workers can help companies reach their strategic goals and may help decrease the high cost of employee turnover.
Employee turnover costs can be measured in many ways, including:
- The expense of recruiting, hiring, and training replacements, especially given today's tight job market and the increased costs of finding and hiring the right people.
- The negative effects on a company's culture and employee morale stemming from dissatisfied workers or constant turnover.
- Loss of valuable knowledge about the company's internal operations when trained employees depart for outside opportunities. If the departing employee has not documented job procedures properly, or there isn't adequate training put in place, there is a risk that a new hire will take longer to learn the procedures of the position.
- Workflow disruption that occurs when someone leaves the company. This includes redistributing work to other employees as well as investing additional time in training/developing a new employee in the position.
- Loss of productivity as other employees, who may already be stretched thin, may struggle to perform the additional job duties as efficiently or effectively as their former colleague. In the event of a customer-facing position, there's a risk of current or potential customers noticing these shortcomings, which can negatively impact a business's reputation.
Employers want to hang on to good workers as much as possible. The Paychex 2021 Pulse of HR Survey found in the pandemic economy, HR leaders are reporting employee engagement has decreased in the last year by more than 50%. This is concerning given that engagement is often an indicator of an employee's willingness to stay with a company. In response, HR leaders are using many tactics to try to increase retention, including offering remote work options (41%), providing financial incentives (41%), and providing flexible work options (38%).
When it comes to the benefits of employee retention and investing in employee retention ideas, simply avoiding turnover costs makes for a compelling business case. While employee attrition can create a negative feedback spiral, one of the great advantages of employee retention is the positive influence that it brings to a business. Creativity and knowledge stay within an organization, which can strengthen reliable workflows and productivity. In turn, this boosts employee morale, making the business an attractive place to work for future hires. Addressing and acting on employee attrition may allow a business to perform the self-evaluation it needs to work towards sustained success.
Standard Employee Retention Ideas May Be Highly Effective
To help ensure you're doing the most you can to retain employees at a basic level, consider the following common worker retention strategies:
- Offer competitive salaries: Offer employees a competitive salary and keep up with the current standards in your industry and locale. In fact, a 2021 survey by Paychex and Future Workplace® exploring employees' current loyalty to their employer revealed that an increase in pay is the top driver of employee retention. A raise of 10-15% carried the most impact for preserving employees.
- Provide superior benefits: Desirable traditional benefits, including health insurance and retirement plan offerings, may attract and retain top talent in any job market.
- Pay employee bonuses: If your industry pays bonuses, consider offering them as well. When combined with salary and benefits, an annual bonus can help recruit and retain high-quality employees that your business values most.
- Prioritize career development: Top employees may want to continue their career growth and seek other jobs if they aren't provided the right opportunities within your company. Expand your employee retention ideas by considering career development tools, including on-site training and higher education tuition reimbursement — as either a percentage of the cost for college courses or the full amount — so employees can expand the range of skills needed to improve their professional skill sets. Provide customized e-learning materials with the use of an advanced learning management system, a retention idea that can be implemented at a manageable business cost. Another path for career development could include a mentorship program. Mentoring helps employees identify opportunities for growth and skill development they may otherwise miss as well as being a particularly valuable resource for strengthening inclusion practices.
It's key to look for employee retention ideas across many of your current practices. Fostering employee loyalty starts with your hiring process and strategic recruitment. In your search to find the most qualified individual for the role, be careful not to overlook attitude, enthusiasm, and non-traditional yet relevant work experience. Company retention strategies should also include an element of self-reflection by assessing how well the company can satisfy a candidate's long-range career plans.
Personalized Employee Retention Strategies
In addition to salary and benefits packages, offering employees something they may not find anywhere else may be an effective way to help increase retention. The following creative retention ideas may make an impact precisely because they are unexpected.
Company-specific products: Offer discounts on company products to employees or give away branded merchandise.
Employee recognition: Employees may want to be recognized for the work they do. While it's often desirable to demonstrate recognition through a raise in salary or a holiday bonus, many employees also respond favorably to gestures that extend beyond financial rewards. Such employee retention solutions and initiatives may include:
- Monthly or annual high-performance awards — Recognize an employee for their contributions at a staff meeting or other departmental gathering.
- Offer additional responsibility/visibility — Invite key employees to head a new project or lead a committee exploring changes in business operations.
- Peer recognition programs — Encourage fellow employees to nominate a colleague for outstanding dedication and service.
- Make it a point to notice the efforts and achievements of your employees with perks such as rewards, gift cards, or printed certificates. Work with your management team to devise a way to add more recognition into the routines of each team.
Low-Cost Employee Retention Ideas
Many long-term retention strategies can be cost-effective when compared to the expense of hiring and training a new employee. Still, companies should keep an eye on the benefits budget to ensure they aren't overspending. Monitor who is taking advantage of programs offered and gauge satisfaction levels.
Also, remember that retention tactics aren't always defined as "benefits" and there are creative ways to retain employees. Jessica Totman, Paychex HR consultant, believes that recognition, appreciation, and encouragement are also important components of employee retention. Creative employee retention ideas can simply reinforce a desired workplace culture favoring diversity, support, and fairness. In this way, each employee can feel empowered with the opportunity to advance, learn, and feel like they're contributing to the company's success.
Some relatively low-cost company retention strategies include:
Onsite health and wellness support: To help employees become happier and more productive in the workplace, adding the benefit of corporate support for health and wellness goals can be highly effective. Implementing health and wellness programs at work may also reduce employee tardiness and absenteeism, plus it may help save as much as $1 for every $3 spent on health care premiums, according to an International Foundation of Employee Benefit Plans report.
Employee-paid supplemental benefits: If your current employee benefit plan covers just the basics of healthcare and retirement, you can augment these benefits. Supplemental benefits give employees the chance to buy extra insurance like dental, vision, and life insurance policies at group discount rates. Employees choose what they want and contribute out of their own paychecks via payroll deduction.
Self-service benefits and payroll 24/7: Today's employee is on-the-go, trying to find balance between the demands of a professional and personal life. To help add a perk to your current benefits, allow them to access benefits and payroll information from a secure web-based portal. Give employees the option to view pay stubs, set up direct deposits, and get important benefits information when it's most convenient for them.
Corporate-sponsored celebrations: Enjoying the fruits of labor is one of the benefits of teamwork. Your business can make it a point to thank your hard-working employees on a regular basis with celebrations. They can be as involved as something such as planned activities or entertainment, or they can consist of employee downtime.
Using Non-Traditional Benefits for Employee Retention
Another source of retention strategies comes from non-traditional benefits. According to the Paychex 2021 Pulse of HR Survey, some of the top benefits, both traditional and unique, offered included:
- Health insurance
- Parental leave
- Retirement plans
- Life insurance
- Telecommuting/remote work
Take a look at your workforce to determine which of these items makes the most sense for your company, both financially and from a utilization standpoint.
Find Additional Retention Ideas Through Employee Feedback
Employees may value feedback centered on their individual performance as well as opportunities to share knowledge with the executive team. Employees may also appreciate having a say (within reasonable guidelines) about the company's future direction. The more a business shares with employees, the stronger the bond may be between them. When people are given an honest view of the company's big picture — its current strategies and long-range vision — they may feel greater motivation to do work that makes a difference to the business. It can be a powerful method for tying individuals to an organization and nurturing loyalty.
For business owners who are unsure of what it will take to motivate employees to stay, seeking feedback can be useful. Townhall meetings or employee surveys can help determine how receptive the workforce would be to proposed changes. Exit surveys can also provide a wealth of information about areas of dissatisfaction that ultimately caused an employee to seek out other opportunities.
Keep in mind that employees may want to provide feedback, but may feel uncomfortable doing so. Adding safe and anonymous channels for employees to provide feedback can help an employer gather valuable information from hesitant employees. Anonymous polls, suggestion boxes, or an anonymous email inbox can all do the trick.
The Top Employee Retention Benefits
What makes employees stay or leave? Employees who experience satisfaction and happiness at their workplace are more likely to want to remain there. The following chart represents various retention benefits that make employees happy on a scale of 1-10, with 10 indicating they would stay and 1 indicating they would leave.
Inexpensive, quality health care — 7.95
Bonuses — 7.93
Paid sick days — 7.64
Work-from-home days — 7.54
Flexible schedules — 7.50
Unlimited/flexible time off — 7.41
Dental plan — 7.22
401(k) matching — 7.16
Paid training or tuition reimbursement — 6.99
Vision plan — 6.63
Additional Strategies To Boost Engagement and Commitment
Turnover and training new employees can cost companies time, money, and productivity, so it pays to retain good staff. To improve employee satisfaction, many companies have adopted flexible hours, hybrid work-from-home and office options, subsidized passes for mass transportation, 401(k) retirement saving plans, and casual dress policies. But there are also many uncommon ways you may be able to boost your workforce's engagement and commitment to the company. In no particular order, we offer 29 suggestions for creative retention ideas:
- Consider gamifying aspects of your workplace to engage and motivate workers (especially younger employees) — use game-design thinking to make projects and tasks more fun.
- Encourage managers to hand write thank-you notes to staff for performance or thoughtful workplace acts.
- Provide paid time off to participate in volunteer work.
- Provide discounted dry cleaning, with workplace pickup and delivery.
- Arrange annual clothing swaps among employees — a fashion bazaar at the workplace!
- Form workplace teams for softball, volleyball, trivia contests, bowling, etc., and hold tournaments.
- Bring in a massage therapist once a week to provide free or low-cost 20-minute chair massages.
- Offer lunchtime yoga classes, weight loss groups, and/or brown-bag lunches with educational speakers.
- Arrange for interest-free computer loans, whereby your company buys computers for employees and establishes a payment plan.
- Obtain discounts from local merchants, such as health clubs, parking lots, or office supply stores.
- Treat staff and their families to movie nights, sporting events, or live theater.
- Allow workers the day off on their birthdays, or the option of a floating holiday.
- Encourage workers to come in costume on Halloween (have a contest!) and host a holiday-themed lunch.
- Permit workers to use social media on company time (for short periods) to demonstrate trust on the part of management.
- Start a lunchtime book club.
- Establish a worksite lending library — employees bring in books they've read and want to share.
- Hold an annual staff craft fair to let people showcase their hobbies.
- Set aside a "quiet room" with comfortable furniture and low lighting, where individuals can relax, think, and deal with stress in private.
- Organize short exercise breaks, such as 15-minute walks.
- Let employees tailor workspaces for their comfort, e.g., standing desks, large balls instead of chairs, or under-desk exercise pedals.
- Put out a suggestion box and discuss submissions at staff meetings.
- Keep your promises — let employees know they can trust management.
- Organize an annual staff talent show.
- Set up a fitness room with weights and exercise equipment.
- Extend unpaid parental leave — perhaps by as much as six months.
- Line up concierge services for your workers. For example, professionals to buy, wrap, and deliver gifts; make reservations for restaurants and entertainment; or deliver groceries to the home.
- Allow employees to design their own staff-retention strategies.
- Have the entire company participate in a community service day.
- Help employees offset the costs of childcare, senior care, and even pet care.
The size of your company, your corporate culture, and your budget will determine the employee retention strategies you can apply. But never let creativity be the limiting factor.
Measuring Retention Success: Data Analytics and Retention Trends
Once you incorporate HR retention programs, how can you measure success? Quantifying the value of retention strategies can be challenging, but if you capture the right data, you may be in a better position to determine what's working and which strategies aren't adding value. Employee turnover rates, combined with exit interviews and employee satisfaction surveys, are great sources of data. You may also wish to examine overall company productivity and employee participation in certain benefits or career development programs.
By tracking data and analyzing trends through workforce analytics, companies may, companies may be able to identify issues early on and learn how to retain employees long-term. For example, when HR teams notice an uptick in employees leaving, this could signal a need to shift retention strategies and try something new. This can be accomplished through the joint efforts of HR and front-line managers, who often are the ones carrying out retention strategies. If expert advice is needed, consider seeking HR consulting services and an assessment of your retention practices, which can help you identify new ways to encourage employees to stay for the long haul.
Some employees will come and go, regardless of the benefits offered to them. But with the right combination of tangible and intangible benefits, many businesses can help retain the right ones. Those same benefits may also prove invaluable as part of a proactive recruiting strategy. Nothing demonstrates an employer's desirability like a workforce of satisfied and hard-working employees. If you're looking to improve retention at your company, seeking assistance with benefits administration and HR support can help you drill down on areas of potential improvement, where small changes can make a large difference in overall employee satisfaction.
12023 Priorities for Business Leaders, Paychex