Top 12 Employee Retention Strategies

Category: Employee Engagement.

Human resources are among the top assets of an organization. Without the right employees with suitable skill sets in the right positions, the organization cannot meet its goals and move in the right direction. Once the organization gets a potent workforce aligned to its goals, it is easier to set high targets, constantly innovate and build a significant competitive advantage.


Start the retention process when the person is still open to staying and not after they’ve already told you they’re leaving.

Jeff Weiner, CEO, LinkedIn

But the biggest challenge in managing human resources is employee retention. Retaining the key employees means retaining their skillsets, experience and their value to the organization. While it is possible to replace one or two employees and train them, employee turnover does not necessarily happen as isolated events. If something in the organization causes a bad employee experience, then it can trigger a massive chain reaction that can lead to employee turnover.

It is mainly because employee turnover may be caused by things within the organization that can broadly affect the entire workforce.


During such times, employee turnover can leave an organization without crucial skillsets and leadership. It can be disastrous for the organization.

Effects of Employee Turnover

When the employee retention rate is less and when the employee turnover is high:

  • The organization loses key talent and skill sets.
  • It costs employee goodwill, which will make it hard to hire and fill the positions with the best minds in the business.
  • When the key employees go to competitors, it makes them stronger.
  • A large number of new recruits make it necessary to reorient the workforce towards goals. It can be a long, unnecessary exercise that costs, time, resources and productivity
  • It causes financial stress on organizations and teams, as recruitment and training costs more than paying for existing employees.
  • Synergy amongst team members and their relationship with the organization need to be built from ground up.
  • It results in a lesser amount of innovation.
  • There is loss of performance, productivity and employee engagement

As a result, it is wiser and more economical to reduce employee turnover and increase employee retention rate in the organization.

Employee Turnover Rates

Employee turnover is not uniform across industries and sectors. Some sectors have more volatility. The software industry, for instance, usually has higher employee turnover rates compared to manufacturing, since human input is crucial for those jobs, which makes recruiting key people more important than anything else.

Even within sectors and industries, some rapidly-growing fields may demand new recruits in high numbers. For instance, currently, expertise in AI and ML are in high demand. Software companies pursuing these skills may try hard to recruit highly skilled individuals in this area. As a result, the employees may get more attractive offers and better growth as they move to a different organization within a short span. This may result in higher employee turnover.

In contrast, some industries, sectors and occupations may see steady levels of employee turnover. Whatever the turnover rate is, it is essential to keep it below the industry average to be successful at employee retention.

What causes Employee Turnover?

Employees may choose to leave an organization when they are not happy to be there. But employee happiness is a result of a multitude of factors. In most cases, factors impacting on employee happiness and the resultant employee turnover are endemic in the organization. By studying these factors using industry-standard research methods, you can address the gaps and restore happiness in the organization, thus reducing employee turnover and increasing employee retention rate. You can know more about employee happiness and how to fathom employee satisfaction and employee engagement using surveys in the following articles.

But prevention is always better than cure.

In order to reduce employee turnover and improve the employee retention rate, the following employee retention strategies will prove to be useful.

1. Hire the right people for the right job

Right people are not just the ones who bear all the skill sets suitable for the job, but also the ones who are potentially compatible with the organization already, right when they are freshly recruited.

So, while recruiting, it is crucial to analyze the profile, attitude and aptitude of the candidates along with the skills and competencies, and choose the ones who can potentially fit into the organization well. This will go a long way in addressing employee turnover from the very beginning of employees’ tenure. Following are some of the qualities of the ‘right candidate’.

  • The right candidate, in addition to meeting the job description, also believes in the vision of the organization and fits naturally in the culture, processes, strategy and the work environment of the organization.
  • Employees with an excellent profile are not necessarily team players. While personal achievements do matter, it is vital to look into the things the employee had previously achieved with a team, even outside the purview of their work, such as volunteering and CSR activities.
  • It is equally important to make sure to hire employees who are attached to the organization. A candidate with long tenures in previous organizations is potentially someone who stayed loyal to them through various challenges. In contrast, employees who have worked with multiple organizations within a short time may leave the organization quickly.

When the right person is appointed, everything falls in place for him or her, and it becomes easy for them to seamlessly integrate with the organization. When the person feels one with the job, it is easy to retain them as an employee.

2. Give employees the challenges they deserve

Employees need a compelling reason to stay in a job. While employees need to feel comfortable at work, remaining in that safe and comfortable zone forever breeds boredom. Jobs that involve a boring routine, without any room for employees to put their skills and abilities to test, do not make work life interesting. Without any excitement at work, the employees may turn towards alternatives. So, giving them suitable challenges periodically is key to keeping them interested and engaged. It enriches their experience in the organization.

At the same time, care should be taken to not overwhelm them with challenges and tasks that are beyond their capabilities. Also, before giving employees any challenges, it is extremely important to analyze the risks of failure. Otherwise, it can seriously backfire and result in loss of motivation.

When the organization periodically provides challenges the employees are capable of overcoming, employees have a strong reason to stay with the organization. This reduces employee turnover and increases employee retention.

3. Encourage innovation

Organizations that innovate more often find greater amounts of success and growth. So, it is essential to bring out the innovation from employees. For that, the organization should provide the platform, essential tools and the motivation to come up with new ideas.

Celebrating innovations should be made an integral part of the organization culture in order to tap the innovation potential at all levels. When it is ingrained in the organization culture, innovation is not limited to certain pockets of the organization, be it a team, department or employee grade. This energizes the workforce as a whole and brings out creativity and innovation at all levels, making the organization collectively innovative.

The organization should evaluate all the ideas it gets from every employee and adapt the ones that could prove to be significant. When employees have the room to share their ideas and get them adapted by the organization, it gives them the motivation to stay in the organization, which helps increase employee retention rate.

4. Provide them the growth opportunities they want

Staying static in the career is always seen as a risk by the employees, and it gives them a sense of insecurity. Employees have their own aspirations, and they want to reach a certain level in the organization at any given time. If they cannot achieve their career milestones on time, they feel the need to find a job that promises them the growth they want.

So, in order to improve employee retention, it is crucial to understand their career aspirations, create growth opportunities within the organization, draw suitable career plans and live up to the promise. Following up on their career growth in the performance reviews and addressing their concerns by promoting employees at the right time ensures employee retention.

5. Assist them in their growth

While making plans for promotion and career development can pay dividends, employees need to become deserving of the promotions they receive. It would be a blunder to promote employees when their skills and competencies do not meet the job description of the position they would be promoted to. It can not only affect the organization, but also demotivate the employees when they fail to fulfill their responsibilities due to lack of skill and leadership qualities.

The organization should provide employees with training and new learning opportunities so that they upgrade their skills, become deserving of the higher positions and do their duties without any difficulty. This helps increase employee retention rate.

6. Recognize their work

Recognition of work is essential for an employee to be happy in an organization. Recognition can range anywhere from a pat on the back to awards, rewards, incentives and perks, depending on the magnitude of the achievement or impact of one’s work.

Recognition should reach all the levels, and the flow of recognition from top to bottom is achieved only by imbibing a culture of recognition in the organization. Selective recognition and the lack of recognition in some areas can weaken the performance of the organization. An organization is only as strong as its weakest link. By enabling recognition at all levels, you can strengthen the organization, keep motivation levels high across all levels and reduce employee turnover. You can also give employee incentives to amplify the impact of acknowledgment and motivate employees to continually excel in their work.

Employee incentives can be a powerful tool for recognizing achievements and motivating employees. When employees are recognized for their hard work and contributions, they feel valued and appreciated. This can lead to increased motivation, productivity, and engagement. There are many different types of employee incentives that you can offer, such as:

  • Financial incentives: These can include bonuses, commissions, profit sharing, and stock options.
  • Non-financial incentives: These can include public recognition, additional vacation days, flexible work arrangements, and professional development opportunities.

By using a combination of recognition and employee incentives, you can create a work environment where employees feel valued and motivated to do their best work.

7. Listen to them and resolve issues

A good organization enables a free and safe environment for employees to speak out. Employee turnover can happen when problems remain unheard. In order to understand the needs of the employees and to solve the issues in a timely manner, the organization should give opportunities for the employees to voice out their grievances. The organization should follow up with suitable action to solve those issues. It will instill confidence and increase employee retention.

8. Maintain transparency and earn their trust

The organization should be fair and transparent in all its interactions with the organization. Lack of transparency results in paranoia and lack of trust from the employees. When the organization does not share everything an employee needs to know, it can undermine his or her confidence and make him or her look for alternatives, resulting in lower retention rates.

9. Create a healthy feedback loop

Interactions between the organization and employees should involve two-way communication. The organization should give feedback about the performance of the employee, and the employee has to give feedback on experience of working with the organization.

Both parties should speak and listen to the other constantly, to maintain a healthy communication and feedback loop. When positive feedback comes from both sides, it means everything is working in the organization as it should be, leading to higher employee retention rate.

10. Be the benchmark in payroll and benefits

Getting paid well and having a comforting and robust safety net in the form of benefits such as health insurance make the employees feel valued. They also show that the organization cares for the employees. While happiness at the workplace can have various factors behind it, none of them can compensate for less-than-ideal pay scale and benefits, as it is the foremost motivation and the reason why an employee works with the organization. Keeping them at the higher end of the industry standard helps reduce employee turnover and increase employee retention rate.

11. Make meaningful changes and give employees the time to adapt

Stability is key to keeping employees comfortable; but change is constant. Setting new goals, aligning employees to new strategies, adapting new best practices, tweaking the processes and changing the way the organization operates, are all essential for maintaining the competitive advantage of the organization.

But introducing drastic changes and forcing employees to adapt within a short span can be counter-productive. The organization should give employees enough time to get in sync with the change. It should also facilitate the acceptance and adaptation of these changes by the employees through training sessions and constant communication with the employees. Disturbing the stability in the organization can make employees uncomfortable and have a significant impact on employee retention rate.

12. Give employees adequate time for themselves

The organization should provide a good-work-life balance. The employees have a life outside the organization, and the quality of life there has a direct impact on their experience with regard to working in the organization.

So, the organization should give ample time for the employees to take breaks and spend quality time with their family. Whenever the employee achieves a significant milestone or makes a big achievement or contributes valuable ideas for the organization, rewards for the achievement can include breaks. It helps employees get refreshed and recharged. It helps the organization win their trust and reduce employee turnover.

Engaging employees is perhaps the most important thing organizations can do to help retain employees. Using an employee engagement software or platform to help engage remote employees is a great idea for companies with remote or hybrid work models, or even just an office that doesn’t allow for continuous interactions throughout the day. The employee engagement module allows team members and managers to award one another for jobs well done, and offer congratulations or praise. To learn more about how can help you keep employees engaged no matter where you are, book a free demo with our OKR experts today!

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