Recruiting new and qualified personnel is undoubtedly of enormous importance. However, it is just as essential to retain existing staff in the long term. In addition to high turnover rates, articles about “quiet quitting” have circulated recently. They cite lower morale, a lack of prospects and other reasons for employees staying with the company but remaining unmotivated and performing only a fraction of their actual tasks.
To counteract such circumstances or to avoid getting into such a situation in the first place, we take a closer look at the concept of employee retention and what role it plays in companies in our blog post. You will then receive 5 strategies with supporting measures that you can follow to have a positive effect on employee retention in your company.
Employee retention definition
The definition of “employee retention” covers all measures aimed at retaining qualified personnel in a company over the long term. This is a central field of action in human resources management, as it both promotes the willingness of employees to perform and reduces staff turnover.
Employee retention is not only good for the employer brand, but also for the employees themselves. They feel valued and are more motivated, which has a positive effect on their willingness to perform. In addition, a high level of employee loyalty can help employees to become positive ambassadors for the company and thus contribute to attracting new skilled workers.
To optimize employee retention, companies should develop an individual strategy tailored to the specific needs and requirements of their workforce. In doing so, they can draw on best-practice examples such as those realized by companies like Google, Zalando or MTU Aero Engines.
It is important to emphasize that employee retention, by definition, is not just a task for the HR department, but is a company-wide responsibility. Everyone in the company, from the executive level to the individual, has a role in promoting and maintaining employee retention.
Why is employee retention so important for companies?
In today’s working world, where qualified specialists are in short supply, employee retention is more important than ever. Companies that succeed in retaining their employees in the long term benefit from lower turnover rates, higher employee satisfaction and productivity, and a stronger employer brand. In addition, high employee retention can help reduce the cost of recruiting and training new employees.
Now that we have established the importance of employee retention, we will look at five effective retention strategies and what actions can be taken to achieve them.
Strategy 1: Creating a positive working environment
According to a Gallup study, 65% of the workforce is not adequately engaged. These employee:s are basically “checked out.” They sleepwalk through their workday and may put in the time, but they lack passion and energy. They pose a risk, and that risk can tip both ways – good or bad.
Create an atmosphere in which employees feel valued, supported and motivated. It’s about creating a culture based on respect, collaboration and mutual support.
Strategy 2: Flexible working conditions and work-life balance
In a job satisfaction survey, 30% of respondents reported that they left a job because it did not offer flexible work options. 16% are currently actively looking for a new job because of flexibility issues.
In today’s fast-paced and connected world, work-life balance is a key aspect of employee satisfaction and retention. Flexible working conditions can help employees better balance their work commitments with their personal needs and obligations. This reduces stress, increases satisfaction and engagement, and ultimately strengthens employee retention.
Strategy 3:Personal development and career opportunities
According to studies by Gallup, low engagement teams have an 18% to 43% higher turnover rate compared to highly engaged teams. Employees who have a sense of perspective in their career and can develop both personally and professionally are more committed and stay with the company in the long term.
Strategy 4: Attractive compensation and benefits
The cost of high turnover is greater than you might think. The Society for Human Resource Management (SHRM) estimates that replacing an entry-level employee costs 50 percent of their annual salary. This figure rises to as much as 250 percent when it comes to replacing managers or highly qualified employees. A decisive factor when thinking about keeping existing staff in the company.
Attractive compensation and benefits is a key factor in making employees feel valued and motivated to perform at their best. They also help attract and retain qualified employees, which ultimately increases your company’s productivity and success.
Strategy 5: Building a strong corporate culture
According to a survey, companies whose bosses see corporate culture as the top success factor achieve twice as much growth as those that do not.
A strong corporate culture promotes employee retention and is the backbone of a successful company. It defines who you are and how you work. It is the invisible bond that holds employees together and motivates them to give their best. A positive and welcoming company culture is an important part of making employees feel valued and engaged, which in turn increases their productivity and job satisfaction.
Employee retention summarized
Employee retention drives the success of a company. Effective employee retention strategies help companies secure qualified employees, increase productivity and strengthen their competitive position. The most effective retention strategies directly address the specific needs and expectations of employees. Therefore, it is essential to know the employees and their needs exactly.
If you follow the key messages of the strategies and actions in our blog post and work with your employee:s to implement them, you are sure to have a positive impact on employee retention in your organization. We wish you good luck in the realization!