5 Effective Strategies to Improve your Employee Retention

Each year brings a new workplace trend, from the Great Resignation in 2021 to ‘quiet quitting’ in 2022. While these buzzwords may come and go, the underlying issues they represent are anything but new. Over the past decade, there has been a shift in what employees expect from their jobs, with concerns over adequate salaries, limited career advancement, and poor work-life balance taking centre stage. While these apprehensions were exacerbated by the pandemic, they remain prevalent and must be addressed by businesses to succeed.?

As employees drive these new expectations, companies must reassess what they offer to attract the best talent and retain their current workforce. Developing a clear employee retention strategy is essential, benefiting both employees and the overall health of your business. High employee turnover can lead to costly recruitment expenses and damage your employer brand, making it harder to attract new talent. This article will discuss five effective strategies to consider in your retention plan.

Common Reasons that Push Employees to Leave

It can be challenging to please everyone in business, especially considering that three in ten UK employees leave to join another company each year. However, by learning from familiar themes and fostering a positive work environment, businesses can aim to keep employee turnover at the healthy 10% rate proposed by Gallup .

Research by PWC found workplace dissatisfaction to be an overwhelming theme when it came to employees seeking new opportunities. Below are seven reasons employees frequently cite when leaving their workplace, many of which can be addressed with simple yet strategic implementations:

-?????? Non-competitive pay and benefits

-?????? Limited opportunities for advancement

-?????? Not feeling respected/recognised at work

-?????? Feeling over-worked or an unsatisfied work-life balance

-?????? Discontent with management or leadership culture

-?????? Concern over the business’s financial wellbeing

-?????? Boredom or more attractive offers from another company

By understanding these common issues and proactively addressing each one, businesses can create a more positive work environment that not only reduces turnover but enhances overall employee satisfaction and productivity.

Understanding Employee Turnover & Retention in a Post-Recession Market

Economic growth often brings more job opportunities and higher wages, benefiting both employees and employers. However, when the economy contracts and enters a recession, as the UK did in the latter half of 2023, these benefits can reverse, leading to job losses, scarce promotions, and pay raises that don’t keep pace with inflation.

?Despite the UK’s recent economic progress of 0.6% in the first quarter of 2024, the aftermath of the recession is still affecting many workers and companies. As the labour market gradually returns to post-COVID normality, employee turnover remains high at 34%, and vacancy levels are persistently high. Yet EY’s research found over half of employers believe their employees are less likely to quit due to poorer market conditions, contrasting with employee sentiments. It is vital for businesses to understand the post-recession effects on their employees to avoid reduced retention.

For instance, the Money and Mental Health Policy Institute found that 59% of adults believed the cost-of-living crisis, exacerbatedby the recession, was harming their mental health. Elevated stress levels impact employee well-being, making it crucial for organisations to focus on providing effective support systems. This not only attracts new hires but also reduces the likelihood of existing employees leaving. Managing employee expectations and meeting their needs becomes more challenging with recession-driven budget constraints, but solutions do exist. Creating budget-friendly strategies that allow employees to develop their skills and advance post-recession can prevent feelings of stagnation and the urge to leave.

Understanding employee turnover and retention in a post-recession market requires a multifaceted approach. By building a resilient people strategy, businesses can ensure growth and stability in an evolving economic landscape.

What Drives Employee Retention

Understanding and addressing the key factors influencing employees to stay with a company can encourage a loyal and motivated workforce. Here are four major drivers of employee retention:

Recognition:

Employees want to feel valued and appreciated. Recognition programmes can boost morale and motivation, helping employees feel respected and like they belong.

Flexibility:

Flexible working hours, remote options, or hybrid models can enhance job satisfaction. This flexibility helps employees better manage their personal and professional lives, reducing stress and increasing commitment to their organisation.

Competitive Pay:

Providing market-rate or above pay and benefits packages helps employees feel fairly compensated for their time and work. Regularly reviewing and adjusting salaries to reflect market standards, performance, and cost-of-living changes can prevent employees from seeking more attractive opportunities.

Training & Development:

Growth opportunities keep employees motivated and show them that your company is committed to their professional development, encouraging them to envision a long-term future with the company.

By focusing on these critical areas, businesses can create an environment that leads to a more satisfied and loyal workforce, ultimately driving the organisation’s success.

Five Retention Strategies to Keep Your Employees

1. Invest in employee development

Continuous learning and growth opportunities are essential for employee satisfaction and retention. Companies can enhance their employees' skills and overall satisfaction by investing in training programs, workshops, and seminars. Providing access to online courses and certifications fosters a culture of learning, equipping employees with the tools needed to succeed and demonstrating a company’s commitment to its employees’ growth.

A LinkedIn study found 94% of employees would stay longer with an employer who invests in their learning and development. Companies that encourage this often see 50% better employee engagement and retention. Most employees feel valued when their career goals align with the company’s objectives. Additionally, frequent training offers employees new perspectives, keeping the workforce innovative and avoiding stagnation.

2. Review your compensation plan

Crafting a compensation package that drives employee retention involves more than just offering competitive wages; it requires a balance of salary and meaningful benefits. High salaries without benefits may not suffice to keep employees from changing jobs, and generous benefits without competitive salaries won’t retain them either.

Developing a competitive compensation plan should be a strategic process. Stay updated on market trends by conducting or reviewing salary surveys and understanding the average offerings in your industry. At JSS, we provide these insights across seven sectors in our quarterly salary guides.

While salaries remain a top motivator for job changes, today’s employees also seek benefits that enhance work-life balance, job security, and career growth. Meaningful benefits such as flexible schedules, more paid time off, and guaranteed family leave are essential. By addressing both financial and personal needs, companies can create a comprehensive compensation plan that effectively retains their talent.

3. Improve work-life balance

Work-life balance is a crucial element of a healthy work environment, essential for reducing stress and preventing burnout. Strategies such as remote work, compressed workweeks, and flexible working hours can significantly enhance this balance, each offering distinct advantages:

Remote work, popularised during the pandemic, allows employees to control their work environment, eliminate commuting time, and save on expenses.

Compressed workweeks condense the standard five-day workweek into four longer days or offer shorter hours over five days, providing additional time for personal tasks and relaxation, ultimately improving overall well-being and productivity.

Flexible working hours enable employees to tailor their work schedules around personal commitments, offering flexibility in start and finish times. This flexibility is particularly beneficial for those with caregiving responsibilities, increasing their motivation and satisfaction at work.?

Surveys underscore the effectiveness of these strategies, revealing that 40% of adults would consider leaving their jobs if denied remote work opportunities, and 80% of employees prioritise jobs that offer flexible schedules. Implementing these measures can alleviate fatigue, low performance, and irritability, fostering a positive workplace culture conducive to long-term employee retention.

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4. Recognise your employees contributions

Employee recognition is pivotal for encouraging motivation and maintaining employee satisfaction. It involves acknowledging and rewarding employees for their hard work and achievements, ranging from simple expressions of gratitude to tangible rewards like bonuses. According to the SHRM , regular praise plays a critical role in boosting employee engagement, resulting in higher job satisfaction, increased productivity, and lower turnover rates.?

Implementing performance-based incentives such as bonuses and gift cards, recognising long-term employees with service awards, and establishing peer-to-peer recognition programs all contribute to cultivating a culture of appreciation. These initiatives underscore the company’s commitment to its employees’ well-being and professional growth, enhancing employee engagement and retention.

5. Support social relationships in the workplace

High social capital is crucial for companies aiming to achieve their objectives, nurturing trust, operational efficiency, and enhanced retention. Social capital encompasses the resources employees gain from their social networks, enabling effective problem-solving, goal pursuit, and collective action. In the workplace, these networks encompass colleagues and managers and extend beyond work to include personal relationships.

Encouraging team building, social events, and positive communications can strengthen teams' social capital, mitigate workplace conflict, prevent burnout, and promote collaboration. Employees with robust social bonds are likelier to persevere through challenging times and contribute to a positive and engaged workplace culture, particularly as businesses navigate economic recoveries and adapt to evolving government policies.

When developing a retention strategy, businesses must thoughtfully assess their unique needs, available resources, and the feasibility of implementation for each component. Aligning these strategies with the company’s overarching vision and goals ensures a sustainable approach that mutually benefits both employees and the organisation. Prioritising these elements empowers companies to cultivate a resilient and motivated workforce poised for long-term success.

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