Effective employee retention strategies

Virtually every business needs a team of capable, dedicated employees to be successful. Employee engagement and retention may be more important than ever in the wake of the COVID-19 pandemic and the Great Resignation, aka the Big Quit or the Great Reshuffle, which started in early 2021 and still shows no signs of abating.

One thing is clear: Whether it's wage stagnation, the rising cost of living or wanting more work-life balance, a multitude of employees have come to expect more from their jobs and aren't afraid to walk away if their needs aren't being met. Savvy employers who rise to meet their demands are often more likely to maintain a strong, productive workforce.

Employee retention is the ability to keep employees—particularly valuable ones—at your business for extended periods of time. Employee retention typically correlates with a positive work environment that makes people feel valued, respected and appreciated. Employees who are engaged and happy in their jobs—who are treated well, find value in what they're doing, and enjoy the atmosphere and culture within the organization—are often more likely to stay on longer.

Employee retention is important because it typically plays an essential role in building a successful team. It may also correlate directly with key aspects of your business, like employee output, work quality, client experiences, institutional knowledge and even your bottom line.

Strong retention often leads to better leadership, engagement and productivity because the team has a depth of experience and knowledge about your business. Longtime employees may also have a rapport with each other—and clients and customers—that allows for efficient task delegation, collaboration and innovation. Plus, happy employees are generally more personable and dedicated, contributing to more positive client experiences.

With high turnover rates, you're more likely to spend additional resources on training, correcting new-hire errors and parsing out problems that arise from a lack of long-term staff, who often have invaluable knowledge gleaned from their history with the organization.

To retain employees, you should usually have a proactive retention plan that focuses on meeting employee needs—and then some. Remember that your employees are human. Taking extra steps to support them and show your appreciation will often be rewarded exponentially through their gratitude, hard work and dedication.

Beyond a high turnover rate, there are several telltale signs that your employees might be unhappy and a strong retention plan is needed, including:

• Employees seem disinterested or disengaged at work.
• There are persistent decreases in productivity, performance and attendance.
• There is conflict and little communication among teams.
• Employees demonstrate signs of burnout.

If any of these apply to your team—or if you want to take action before they do—the following steps should help you develop an effective employee retention plan.

Cultivating a positive, inclusive company culture is a critical component of employee retention and should be a team effort. Typically, the most effective ways to do this are to build a diverse team and to encourage genuine feedback. Representation matters when fostering a sense of belonging, and soliciting feedback could help keep employees engaged and invested in the workplace. Both often help create a sense of genuine care and heightened team morale.

Consider conducting "stay" interviews, which are like exit interviews but focus on why employees have stayed and what would make them more likely to stay in the future. You might also offer anonymous surveys to solicit honest feedback about what could be improved in the workplace. Instituting an open-door policy might also help motivate employees to come to you with ideas or concerns.

Burnout typically occurs when employees are overworked and under-supported, which takes a toll on their mental and physical health. It's often a key factor in employees' decisions to leave. Taking a proactive approach to preventing burnout should aid your retention efforts.

Encourage employees to take time off—and actually stay unplugged from work while doing so. Set reasonable expectations for each staff member's workload, and check in on them during busy seasons. Try to foster an environment in which they feel comfortable speaking up if they're overwhelmed or need extra support. Offering flexible work schedules and environments—like hybrid or work-from-home opportunities—might also go a long way toward preventing burnout.

When employees feel like they're working toward an enriching, exciting future, they're generally more likely to be committed to their work and stay with your organization for the long haul. Connecting employees with opportunities for professional growth often adds value to their employment and provides additional incentive for them to stay on.

Take time to learn about each team member's aspirations and help them develop career paths that align with those. Set attainable employee goals to help keep them motivated and successful. Offer enrichment and professional development opportunities as employee benefits, like additional training, advanced certifications or industry seminars.

Bland cubicles with uncomfortable furniture, multiple barriers and limited communal spaces are likely to stifle anyone's enthusiasm and creativity. Offering an office space that's comfortable, open and inspiring may help boost employee morale and make staff more excited to come in, especially in the wake of the pandemic and long stretches of working from home.

Try to incorporate invigorating color schemes, instead of bland beiges and grays. Creating an open office with fewer barriers, quiet workspaces for focus time, and a flexible and fun communal space for collaboration may encourage innovation, teamwork and productivity.

Additionally, for those businesses that offer flexible working conditions—like permanent or hybrid remote work—consider offering a remote budget or stipend for employees to enhance their home offices. An updated workspace could include a new ergonomic chair, desk or even an additional computer monitor to help enhance comfort and productivity.

Happy, healthy employees tend to have higher energy levels and more positive mindsets that allow them to perform well, produce more, adapt to changes and stay engaged at work. Supporting their overall well-being may offer a twofold benefit: boosting your employees' health and fostering a sense of genuine care for their wellness, which builds team morale.

There are many approaches businesses might take in supporting their employees' well-being. Perhaps the most important is to offer competitive compensation and benefits. Employer-sponsored health programs and on-site health-related resources like an employee gym, yoga classes and healthy snack options are also popular offerings that may bolster employee engagement and retention. 

With employees expecting more from their jobs, strong employee retention strategies are often critical to maintaining a successful workforce. When retention is low, everything from your business's reputation to its bottom line might be affected. Developing a proactive plan to retain strong employees typically yields impressive results that help your business thrive.