Employee Retention: Definition, Importance & Top Tips

It’s no secret that employing the best talent is key to organisational growth. But if employers fail to hold on to their top talent, they may face considerable costs and lower team morale and productivity. As employers scramble to combat turnover, the need to adopt an effective retention strategy has become increasingly important. 

Nearly a quarter of UK employees are actively looking to change jobs in the next few months. A survey of 6,000 workers found that while 69% of people feel confident about switching jobs within the next few months, 24% plan to switch roles within three to six months. It comes as part of a nationwide ‘great resignation’ that’s leaving employers struggling to retain staff. With a combination of employee burnout, a high number of vacancies, and remote work becoming the new normal, employees have a wider range of options than ever before.

What is employee retention?

Employee retention is an organisation’s strategy to keep its top talent and reduce turnover risk. Companies need to keep their top employees to assist growth and competition, and it’s a leading challenge for all today’s organisations. 

People leave their jobs for all manner of reasons. For some, it’s voluntary, while for other employees, the decision may not have been theirs due to redundancies. Employee retention strategies predominantly focus on voluntary staff turnover that is largely avoidable and can harm the company. 

Why does employee retention matter?

Employee retention is about protecting your organisation’s health, success, and growth. High employee turnover can create many problems for a company, including low productivity and morale, a loss of knowledge and expertise, and high costs. Retaining employees has a range of benefits:

Reduced costs

Staff turnover is expensive. Employees earning over £25,000 a year cost their employers £30,614 on average to replace. There’s also a risk that new and inexperienced workers may reduce the quality of your team’s output or customer experience, resulting in potential revenue loss. A solid employee retention strategy can save your company money.

Less time on recruitment, onboarding and training

Recruitment, onboarding and training can be extremely time consuming and disruptive. By reducing – or even avoiding – the amount of time spent attracting, interviewing, onboarding, and training new hires, you can devote more time to improving the employee experience and preventing staff turnover.

Improved employee morale

Employees leaving can significantly affect the mood of remaining team members. However, an effective retention strategy can boost morale and create a positive working environment for everybody. When people feel positive about their job, they believe their company is a great place to work. As a result, happy employees are more likely to become great company advocates and want to stay.

Increased employee engagement

Highly engaged employees are 1.8 times more likely to still work for their current employer in a year. Not surprisingly, companies that prioritise employee retention have highly engaged employees, lower absenteeism, and better employee health.

Increased productivity

Employee engagement, productivity, and quality of work tend to be considerably higher among long-term employees. They have also had the time to develop their knowledge and skills. Long-term staff also tend to be more loyal and committed to the company’s success. When employees can see that you are committed to employee engagement and retention, they are more likely to perform well.

Improved customer experience

When staff notice that you are committed to employee retention, they feel happier. Happier staff tend to pass that feeling on to customers. Happy employees mean higher engagement and better customer service. 

Improved workplace culture

Your workplace culture affects workers’ decisions to stay or leave. When you have high retention, chances are you can thank your company culture initiatives. In terms of retention, 63% of employees say company culture is one of the top reasons they stay in their job. Meanwhile, 70% say they’d look for a new job if their current workplace’s culture deteriorated. When you engage your employees, they’ll feel more connected to their team, job, and company culture.

6 strategies to improve employee retention and keep the best talent

Given the considerable benefits of low turnover, it’s important to adopt strategies that drive employee engagement and retention. Here are six strategies to improve your employee retention:

1. Hire the right employees

A whopping 80% of staff turnover is down to bad hiring decisions. Investing in the right people from the start is an effective way to ensure you don’t waste recruitment and training efforts. Make sure you clearly explain expectations for each position and note any mismatches in culture and experience that arise during the interview process.

2. Improve onboarding

An effective onboarding experience is far more than just giving a tour of the office. Onboarding is crucial to retaining employees and should be a year-long process used to clarify policies, highlight benefits, set clear expectations, and integrate recruits into the workplace culture. Using Seenit for internal communications helps to create a more engaged workforce and involves them in your company’s storytelling right from the start.

3. Prioritise employee well-being to avoid burnout

Employee burnout is a serious but common issue. It can result in reduced engagement and productivity, a lack of energy, and feelings of isolation. But you can help avoid it within your organisation by giving employees the option of flexible hours, encouraging staff to use all their annual leave and supporting them to make healthy choices. Ensure managers know the signs of burnout and how to reach out to those who might be struggling.

4. Focus on recognition

As many as two-thirds of workers leave their jobs if they feel under-appreciated. To retain your best staff, you need to prioritise recognition that makes them feel valued. When you use recognition consistently, employees feel respected and competent and are less likely to explore employment options elsewhere.

5. Drive employee growth

For many employees, growth and career development opportunities are important enough to influence whether or not they stay at an organisation. To boost employee retention, inspire long-term employee goal setting, encourage consistent growth conversations, provide mentorship and training, and promote internal staff when possible. 

6. Use feedback

Feedback should drive growth across all levels of your company. When you use employee feedback consistently, your staff understand what they are doing well and how they could improve. When you are honest and transparent, staff will feel more included and empowered. You may also find that their productivity and quality of work also increases. But feedback works both ways. Create a process where employees can give feedback to help your organisation grow and better support employee needs.

It’s inevitable that some employees will think about leaving your company before you would like, especially talented workers who attract the attention of other organisations. Whatever reason makes them consider leaving, you can make their decision more difficult with an effective retention strategy. When employees feel valued and supported, they are less likely to go. And those who do leave will be more likely to say positive things about your organisation. Who knows, they may even return to work for you again in the future.