Employee Retention Essentials: Building Long-Term Success

Okay, that's an oversimplification of things, but you get the point. You wouldn't leave employee retention to chance and risk losing your best talent, would you?

Given the talent shortage, changing work realities and new employee mentalities, it is important to move with the times and find new ways to retain employees permanently (or at least for a long time). This way, your company will not only become a better place to work, but also more successful.

We all know that great employees are worth their weight in gold, so making them feel valued is worth their weight in gold. Their happiness depends on so much more than just how engaged they are. If you want to retain your employees in your company for the long term, you need to ensure that everyone finds a healthy balance between work and private life and enjoys being part of the team.

Are you ready to get started? Read on to understand what employees really want at work and discover our data-driven employee engagement strategies.

Understanding employee turnover and termination: Why do employees quit?

In May 2021 we heard about the Great Resignation for the first time. The pandemic changed the reality of work and acted as a catalyst that made people think about their needs and reprioritize them.

Flexibility played a big role here. People became accustomed to working from home, and many employees abandoned their hectic habits in search of a better work-life balance. But flexibility wasn't the only reason for the record-breaking employee turnover.

The Current Landscape of the Modern Workforce

Did you know? 50.5 million Americans will quit their jobs in 2022, surpassing the previous record set in 2021 by 2.5 million.

McKinsey surveyed over 13,000 workers in Australia, Canada, India, Singapore, the United Kingdom and the United States to understand the phenomenon in more detail. The study found that the most common reasons employees leave or consider leaving their jobs are as follows

• Lack of professional development
• Inadequate salary and total compensation
• Indifferent and uninspiring leaders
• Lack of meaningful work
• Unachievable work expectations

High turnover rates are bad news for companies around the world. Not only does turnover incur high costs from the start, but it also leaves a ripple effect that can negatively impact company culture, morale, and profitability.

The good news is that we now have access to a wealth of data to help us understand how people feel in the workplace so we can develop better employee engagement strategies.

The business impact of high employee retention

If you (or your managers) are still hesitant to invest in employee retention, consider this: every employee who leaves the company incurs at least a third of their annual salary in replacement costs. However, prioritizing employee retention doesn't just make short-term financial sense. There are a number of benefits that come with high employee retention and an engaged workforce.

When employees stay with a company, they are more likely to:

• Gather valuable knowledge about your company and your products or services,
• Create strong and consistent processes for higher productivity and quality of work
• Build solid, trusting relationships with your customer base,
• Contribute to positive team dynamics,
• And strengthen your employer brand to make the hiring process easier.

Simply put, keeping your employees engaged will keep your business running smoothly and efficiently. As you work toward developing employee retention strategies, you will see your employee satisfaction, productivity, and happiness skyrocket. If you maintain this throughout the year, you are sure to achieve good financial results.

So how can you achieve this?

Important considerations for better employee retention

Recognizing the importance of work-life balance and flexibility

Everyone knows we are in a new era of work. An era in which a healthy work-life balance is more important than ever. The hybrid and distributed work models we have become accustomed to have given workers more flexibility and time to take care of their personal needs, which has essentially become non-negotiable. Employees have demonstrated the ability to manage their time and remain productive. That's why recognizing and respecting this balance has become a key factor in employee retention.

Flexible schedules and the ability to work remotely meet employees' personal needs and allow them to prioritize the things that are important to them, such as self-care and family time. Employers who provide the resources and support needed to manage stress and promote well-being are the ones who perform best and retain the best talent. When you foster a company culture that values work-life balance and emphasizes the importance of personal time, both sides can only win.

Consideration of career growth and development opportunities

While growth looks different for everyone, all employees want professional development opportunities in their career path. That's why it's so important to make training programs and workshops accessible and offer mentoring or coaching programs to support each employee's professional development.

It's also important to remember that there is no one size fits all. Take the time to create individual development plans, talk to your employees about career opportunities, and be sure to reward employees who take initiative and make notable progress in their professional development.

The importance of a positive and inclusive work culture

There is a lot to be said for a workplace culture characterized by respect, trust and open communication. It lays the foundation for a company's success and makes it a safe space where everyone can grow, socialize and learn. Such an environment celebrates diversity, promotes inclusivity in all areas of the company and ensures equal opportunities for all employees, regardless of their individual background.

When you support this type of inclusion, you also promote teamwork and collaboration and create a sense of belonging among employees. When you have this sense of belonging, you feel more valued and embedded in the company, which is of course a positive factor for employee retention. Be sure to recognize and celebrate the contributions of employees from different backgrounds so that everyone feels valued.

13 employee retention tactics tailored to the needs of the modern workforce

Employee retention can be approached in several ways. We've put together the following list of employee engagement strategies based on industry research insights and data from our recent IceHrm Pulse Survey. We've also included an example and some actionable advice for each tactic.

1.Define a clear and inspiring mission

Nowadays there are hardly any people who don't care about making a positive contribution to the world - even at work. We have experienced a number of very unfortunate events as a collective, but the silver lining is that people are prioritizing what really matters to them, and that includes working for organizations that do good for society. This is especially true for the hypercognitive and goal-oriented Generation Z.

"Their desire to know how their individual contributions and role on the team contribute to supporting the company's mission sets them apart. They make career and purchasing decisions based on the impact they have in the world."

2.Align your strategies with your values

It's clear that modern employees are values-driven. Not only do they value that their company's values align with their own, but they also expect companies to act in accordance with those values. Considering that, according to the IceHrm Pulse Survey, 26% of employees feel like their companies don't make decisions that reflect their values, there's a lot of room for improvement.

And how? By ensuring your values are translated into concrete, actionable strategies. For example, if one of your company's core values is "continuous learning," you should establish and implement a learning and development program that provides ongoing training and development opportunities for all employees.

Next Step: Stay on track by regularly reviewing whether your company policies, practices and decisions align with the values you have established. This way, you'll be better able to make effective adjustments and communicate updates to your employees so they can take ownership of the direction.

3.Make sure your goals are challenging but realistic

Setting goals is an important piece of the alignment puzzle. Challenging company goals often lead to exciting new projects and help employees develop, learn new skills and acquire knowledge. But big, bold goals can quickly become demotivating if they feel too unattainable.

31% of employees feel that their company does not invest the necessary resources, people and effort to achieve its goals.

Next Step: Start by establishing clear guidelines and allocating the right resources to help employees achieve their goals. Regularly review progress and provide constructive feedback that can help employees overcome challenges and continue to grow.

Basically, pursuing big goals is okay and necessary for business success. However, the key is to balance your ambitions with the resources required to make them realistic.

4.Show your employees why their work is important

When employees can connect their daily work to larger company goals and outcomes, they are more likely to understand their value. Not only does this boost their confidence, but it also instills a strong sense of purpose, which, as we've already established, is an important need for younger employees.

A great way to show appreciation and inspire others to do great work is to share success stories that show how your employees' contributions have positively impacted your customers, your company, and even the community.

Next Step: When managers regularly have conversations about the impact of their employees' individual tasks and projects, they become clear about the connection between their work and the company's tasks and goals. After all, greater meaning makes for more motivation!

5.Give your employees access to the right tools and technology

Few things are more frustrating than the feeling of not making any progress due to a lack of resources. If you don't provide your team with the tools and technology they need to do their jobs well and efficiently, you're putting your company's success and your employees' job satisfaction at risk. It's a zero-sum game. Investing in what matters is a surefire way to ensure high levels of productivity and engagement.

One of the best actions you can take is to invest in project management software that streamlines workflows and improves collaboration between team members. This allows everyone involved to agree on what they need to do and how it contributes to the overall picture of the project.

Next Step: As technology continues to evolve and improve, you should conduct regular technology assessments to identify gaps or outdated tools that no longer serve you and your team. When introducing a new tool, it is important to provide your employees with appropriate training and support to ensure they can use the tools effectively. We can't just assume that everyone is able to use and handle it, so remember that a little guidance goes a long way.

6.Offer a fair and competitive compensation package

In times of economic uncertainty, compensation plays an important role. And considering that salary is the main reason for looking for a new job, you shouldn't neglect your compensation strategy. But you don't necessarily have to pay salaries your company can't afford to make an impact. The most important thing for employees is that they are paid fairly.

39% of employees believe they are not paid appropriately based on their tasks, skills and experience.

Next Step: Importantly, this is an ongoing practice. As time passes and the market changes, you should regularly review and adjust your compensation packages to remain competitive. You should also be transparent with your employees about which factors are taken into account when determining their salary (we will go into this in more detail below).

To keep your employees happy, you should evaluate the entire compensation package and make sure you can keep up with the rest of the job market.

7.Be transparent about compensation

Transparency is key when it comes to money. IceHrm Pulse Survey data shows that 34% of employees do not trust that they will be paid fairly compared to similar positions at other companies. But is compensation itself really the problem, or is it perceived injustice? We examined our fairness submetric in IceHrm and found that the root of the problem is a lack of transparency and communication.

Introducing a clear and consistent compensation structure with transparent criteria for salary adjustments, promotions and bonuses is the fairest way to provide clarity for everyone. When you eliminate the gray areas, you create trust.

Next Step: This trust comes when you communicate the company's compensation structure to all employees and give them the opportunity to openly ask questions or seek clarification. Review the structure regularly and address any discrepancies or concerns.

Ultimately, employees want to understand exactly how compensation is determined and whether it is fair. So if you have a specific formula, market basis and performance standards, be sure to share them with your team from the start.

8.Provide opportunities for growth and professional development

Professional development is of utmost importance for young workers. So much so that many of them between the ages of 18 and 34 probably change jobs ten times in search of professional development. If you want to ensure high employee retention, you must support your team internally with career planning, skills assessment, and training and further education.

To give your younger team members the support they need, it's helpful to set up a mentorship program where more experienced employees act as advisors. They are a truly valuable asset that helps younger employees grow into their role and guide their career path and professional development.

Next Step: Here too, it is important to look at the matter from the individual's perspective. Create personal development plans that identify specific training opportunities and areas for growth, and encourage your employees to attend conferences, workshops or online courses to expand their knowledge and skills.

Setting SMART performance goals helps employees reach their full potential and also moves your company closer to its goals. Support your team's performance with these 10 examples of employee goal setting.

9.Encourage your employees to recognize each other

Employees are more likely to stay in a company where they feel valued and recognized. And people want to be recognized not only by their managers or superiors, but also by their colleagues. Peer-to-peer recognition programs strengthen working relationships and team dynamics. A kind praise or note of appreciation also brings a little joy to someone's day.

Help get the ball rolling by implementing a peer recognition program where employees can personally nominate and recognize the contributions of their colleagues. A simple and accessible program is a good way to encourage employees to share kind words with one another.

10.Invest in employee health and well-being

The major reprioritization has made it clear that health and wellness are non-negotiable for today's employees. However, IceHrm's data shows that most companies are still lagging behind, which is likely affecting their employee retention:

• 29% of employees don't feel like their company offers them the support they need to deal with work-related stress.
• 24% of employees feel like their company doesn't care about their mental well-being.

Knowing how important work-life balance is to today's workforce, it's more important than ever to seize the opportunity to implement health and wellness programs that employees truly value. From yoga classes and meditation sessions to access to mental health resources, there are many ways employers can support their employees' physical and mental health.

Next Step: Conduct regular wellness surveys or focus groups to determine your employees' wellness needs and preferences. The feedback you collect can help you design, design, and implement wellness initiatives that address specific employee wellness concerns. These are the first steps to show employees that your company truly cares about them.

11.Pay attention to workload and energy levels

Many employees are dissatisfied and leave the company because the workload is too high and the workload cannot be managed.

23% of employees are unable to maintain good energy levels at work and 34% perceive their work-related stress levels as negative.

Avoiding burnout starts with properly assessing your employees' workload to ensure they are not overloaded and overwhelmed. Once you have a clear picture of the workload, it is important to take steps to reallocate projects and provide additional resources or support to your team. This will show that you care about employee well-being, and employees will appreciate you providing them with additional support.

Next Step: Proactivity is the only solution. Talk to your employees regularly to gauge their energy levels and job satisfaction. Encourage them to address their concerns about workload and, if possible, offer flexibility in task assignments or schedules. Support work-life balance in every way and encourage them to take breaks and vacations to recover and come back stronger.

Do you notice someone having a hard time at work? Discuss work-related stress and find solutions together before it's too late.

12.Don’t let diversity, equity and inclusion fall behind

To achieve true belonging and psychological safety in an organization, everyone should feel seen, supported and heard. Workplace diversity, equity and inclusion, or DEI, should be top of mind at every employee touchpoint and at every stage of the employee experience journey. All employees deserve equal opportunities. If they don't feel considered and respected, modern employees will not shy away from looking for a new job.

47% of Generation Z employees identify as BIPOC, compared to 39% of Millennials, making them the most diverse generation in the job market.

If you want to promote a more inclusive culture, it's a good idea to form a diversity and inclusion committee or working group with your employees. Bring people from different backgrounds together to drive initiatives together.

Next Step: Conduct diversity and inclusion training for all employees to increase awareness and promote understanding. You can also start at the beginning by adopting hiring and recruiting practices that prioritize diversity and ensure equal opportunity. Take the time to evaluate the inclusivity of your company policies, practices, and experiences so you can identify opportunities for improvement. When everyone feels equal, valued, seen and heard, great things can happen.

What is the current reality of the different demographic groups in your organization? Send a diversity, equity, and inclusion survey using these 21 DEI surveys to find out.

13.Prioritize contribution to culture over cultural fit

The idea of hiring employees who fit the company culture is passé. This mindset promotes uniformity, ignores DEI best practices, and often leads to echo chambers in the workplace. A better way to tackle company culture and make your workplace better for everyone is to hire people who will make a positive contribution to your company culture rather than fit into a predetermined mold. During the hiring process, ask yourself:

• Does this person bring a new perspective?
• Does he or she have skills that can complement the rest of the team?
• Do their values align with the company’s values?

All of this begins in the interview. Try to focus on assessing candidates' potential contribution to the company's culture, values and goals, rather than simply assessing whether they fit into the existing culture. See the potential, support further development and welcome different perspectives.

Next Step: First, define the desired cultural traits and values that align with your company's mission and strategic goals, then incorporate behavioral interview questions that elicit answers related to cultural contribution. Make sure your interviewers are trained in assessing cultural alignment and potential so they can make the best choice for your company.

How to build your employee retention strategy

If you're starting from scratch, you can't go wrong building the first iteration of your employee retention strategy with a mix of the tactics above. However, it is important to remember that no single employee retention strategy is suitable for every company. The best way to increase employee retention is to tailor measures to your own employees and their needs.

Here's how to find out what matters most to them (and what makes them stay in their job):

• In personal conversations, you gain insights on an individual level and can find out what drives each individual employee.
• Regular pulse surveys take the guesswork out of feedback. They give employees ideas they otherwise wouldn't have considered and ensure you have a consistent and measurable source of feedback at all times.
• Anonymous feedback tools give employees the opportunity to share thoughts, feelings, suggestions and concerns openly and honestly without fear of consequences. They help managers focus on the message rather than the deliverer.
• Onboarding surveys give new employees the opportunity to provide feedback on their first few months at the company. They help HR and managers improve employee retention right from the start by optimizing the onboarding process.
• Retention surveys provide information about how employees feel in their current position, what concerns them and how they can increase their job satisfaction.
• Exit interviews are the last resort to obtain feedback on how to improve employee retention in the long term. In these conversations, a departing employee can give you specific insight into the reasons that led them to look for greener pastures.

Unlock your unique employee engagement strategies with an employee engagement solution

Congratulations! You've just read everything you need to know to get started on your employee retention plan. You have a better understanding of the current global context, you know why people leave their jobs, you can outline the impact of employee retention on the business, and you even have some ideas for employee retention strategies to get the ball rolling.

If you want to solidify your employee engagement strategies, the next step is to find the right employee feedback and engagement tools to help you tailor your plan to your company's needs.

IceHrm's employee engagement solution can help you do this by taking the guesswork out of it and providing actionable insights into where your team is and where you want them to be.

Employee retention is paramount in today's dynamic workplace. By implementing tailored strategies and leveraging tools like IceHrm, businesses can foster a loyal workforce and achieve sustained success.