How to Increase Your Employee Retention Rate

Posted by Muhammad Talha on Jun 16, 2022

EmployeeRetention

People continue to quit their jobs at a mind-boggling rate as the Great Resignation continues. More than 4.4 million people left their jobs in 2022 so far. Employees are being more selective about the employers, company cultures, and the nature of the work.

Companies that are listening to their employees are doing a better job of weathering this storm. Meanwhile, leaders who aren’t making any efforts to change their ways will struggle to retain their talent.

It’s more important than ever to look inward and see what you can do to increase your employee retention rate. The following actionable tips serve as great starting points for any business.

Take Comprehensive Recruitment Measures

Research indicates that more than 30% of new employees quit their jobs within the first six months of joining a new company. Common reasons include feelings of being underqualified and unappreciated and finding the work to be different than expected. Hence, a vital step in increasing the employee retention rate is to shortlist and hire the right people by:

  • Explaining the Job Realistically — Everyone starts a new job with certain expectations regarding the workload and the nature of the work. Therefore, your job descriptions must clearly state what the position entails and what your company expects from the new employee. Describe all the responsibilities of the job and avoid using vague language that the employee could potentially misinterpret. Consider sharing a few KPIs, performance benchmarks, and a six-month roadmap for the position. The new hire is likely to jump ship if the job demands more than they anticipated.
  • Finding the Right Culture Fit — Give an overview of your company’s values in your job ads, employer bio, and careers page. Ask candidates direct or indirect questions related to company culture and shortlist them based on their responses. For instance, if your company values accountability, it would be a red flag if a candidate blames their colleagues when asked about the times they failed.
  • Creating a Great Onboarding Experience — Give your new hires all the support, context, and tools they need to hit the ground running. Create an onboarding buddy program where a current employee shows a new recruit the essentials of their job and is there to answer their questions. Finally, give your new employees the room to ease into the job. Set a training period during which they’re allowed to make mistakes.

Create and Promote Pay Equity

One crucial step in becoming an admirable employer is creating and promoting pay equity in your company. This entails offering the same compensation to all employees for the same work, regardless of gender, race, sexual orientation, or national origin. Not only is it the right thing to do, but it also helps cultivate a culture where every employee is valued. This, in turn, leads to higher retention as employees who are usually discriminated against are more likely to remain content.

A 2022 survey by The Conference Board reveals that 31% of female workers who switched jobs ended up earning more. This indicates that minority workers have more employment options on the table and won’t think twice about switching jobs if their employers don’t offer pay equity.

Start by auditing your payroll. If an employee gets paid less than their peers for the same amount and level of work, don’t hesitate to rectify that mistake by giving them a raise. 

The next step is to increase transparency. One way to do that is to create salary bands and share them internally with your employees. That way, they can rest assured that they’re being compensated fairly and hold their managers accountable if that’s not the case.

Prioritize the Mental Health of Your Employees

A rise in mental health concerns is one of the factors driving the Great Resignation. A study by Modern Health revealed that one-third of employees are thinking about quitting their jobs due to their mental health.

This will likely remain a priority for employees long after the dust settles. Employers who take measures to focus on the mental well-being of their workers are therefore more likely to enjoy lower employee turnover rates in the coming years. Here are a few initiatives you should consider:

  • Give additional time off to employees for therapy and bereavement.
  • Offer mental health days and encourage your employees to utilize them.
  • Offer corporate gym, yoga, and spa memberships.

Finally, start cultivating a supportive workplace culture that’s conducive to a safe, stress-free environment. Encourage leaders to have an open-door policy, where employees can come to them at any time to voice their concerns or talk about any stresses in their lives.

Provide Flexibility to Your Employees

One unexpected outcome of the COVID-19 pandemic is that it made us realize that not every job requires a daily commute to an office. All you need is a stable internet connection, the essential tools, and the right processes to get the job done. Today, 94% of employees agree they should be allowed to work from anywhere. Offering that flexibility for certain office-based roles is a key employee-retention strategy.

Flexibility isn’t just limited to where employees work but also when. A study by the Pew Research Center revealed that 45% of workers blamed a lack of flexibility in choosing their working hours as a reason to leave their jobs.

Give your employees the freedom to structure their workweeks as much as possible — as long as it doesn’t get in the way of your goals. They should be able to optimize their routines and own their work-life balance. Not only will this help you retain your best employees, but it will also attract top talent to your company.

Embed Your Core Values in the Day to Day

A company’s culture is very important when looking for a new job, according to 46% of employees. Prospective employees gauge a company’s culture by reading about the core values that its employees practice every day. If your company doesn’t live by those values, you may lose not just your relatively new employees but eventually old ones.

It’s good to have integrity as a value, but it doesn’t mean much if the company isn’t honest about its product’s weaknesses. Similarly, transparency as a value is great, but it’s meaningless if the company doesn’t openly share important information with its employees.

In other words, make your values mean something by actually practicing what you preach. Start from the top — encourage top executives to lead by example and embed your company’s core values in their daily lives.

Keep a Pulse on Employee Engagement (and Take Action)

Employee engagement has a direct link to retention. According to Gallup, business teams with low engagement experience 18% to 43% higher voluntary turnover than teams with higher engagement.

If an organization has low engagement levels, it will always start showing symptoms, such as high absenteeism, low productivity, and an overall decrease in morale. However, those symptoms could go unnoticed until it’s too late and the employees start handing in their resignations. To that end, it’s crucial to take a proactive approach and always keep employee engagement levels in check.

The best way to track engagement is to get regular employee feedback. Send out pulse surveys to your staff that ask them to rate their employee experiences so you can calculate your employee Net Promoter Score (eNPS). Both employee experience and eNPS are directly related to engagement and will help you detect even the slightest drop in morale. Also, ask your managers to have regular one-on-one meetings with their direct reports to allow them to voice their concerns and share their feedback.

You should also track performance-related metrics using your people analytics tool or HCM. If productivity levels are on a downward path, speak to your employees about what the company can do to help improve its performance.

Finally, human resource and performance data is only as good as how you use it. Find ways to improve once you know where your organization stands in terms of employee engagement. For instance, give your employees access to all the tools they need to make their jobs easier if they’re unhappy with the existing tech stack. Or provide adequate training if new employees keep making errors that could be easily avoided with some coaching.

Remain Consistent to Improve Your Employee Retention Rate

Make peace with the fact that separations are inevitable. Even your most loyal team members will most likely end up quitting sooner or later. Some will leave for reasons beyond your control, and there’s nothing you can do about that. What you can do, however, is consistently listen to your employees and (where reasonably possible) offer them what they want.

Remember, merely looking at your employee retention rate isn’t good enough and will only help with reactive fixes. For a proactive approach, leverage people analytics and track additional data points, such as employee satisfaction, productivity, and feedback rate. Keep an eye out for anything that might signal a decrease in retention.

If you need help executing these employee retention strategies, consider Inova’s Human Resource Outsourcing service. Whether you want help with recruiting and onboarding or strategic HR, our certified HR experts will be there to assist you round the clock. Request a consultation today to learn more.

Topics: Employer Basics, Human Capital Management, People Analytics

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