10 Effective Employee Retention Strategies Every Company Needs

Employees are your company’s greatest asset – without them, there is no business to run. That’s why retention is a core HR priority. The ability to keep top talent engaged and motivated directly impacts productivity and the company’s bottom line.

As an HR leader, your role is to build an environment where employees want to stay. These 10 proven strategies will help you minimize attrition and reinforce workforce stability.

Why is Employee Retention Important?

Staff retention is vital because it reduces turnover costs and boosts company culture. Not only are employees your most valuable asset, but employee turnover can cost employers 33% of an employee’s annual salary. If you keep losing employees, your bottom line will suffer.

Plus, your retention rate says a lot about your company culture. A high employee turnover rate is not a good look — and employees talk. A poor retention rate showcases the fact your employees aren’t happy. This will make it all the more challenging to find quality candidates who are excited to work with you. Limiting the turnover rate is critical to maintaining a strong workforce.

A low employee retention rate hinders your ability to retain talent and attract new hires, ultimately damaging your company’s reputation. An organization unable to maintain a stable workforce risks becoming unsustainable.

Unsure about your employee retention rate? Learn how to calculate it.

Effective Employee Retention Strategies

Employee retention requires deliberate effort and strategy. Keeping top talent engaged and satisfied means regularly checking in and ensuring they feel valued.

To help you maintain a motivated workforce, here are proven strategies used by companies that excel at employee retention.

1. Ensure a Smooth Employee Onboarding Process

Retention starts on day one. Onboarding is a new employee’s first and defining experience with a company. Your onboarding process can quickly expose the good, the bad and the ugly when it comes to your company’s processes and procedures. If the onboarding process isn’t handled effectively, new hires could arrive at work on their first day to discover an apathetic, disorganized, and intimidating work environment. If this happens, any new employee will be mentally refining their resume before lunch.

As an HR professional yourself, you know any effective onboarding or orientation process must make new employees feel comfortable and confident both in their new role and within the larger organization.

A smooth employee onboarding process can be ensured with brand guides, company guidelines, password access, welcome swag, office tours, calendars, clearly defined responsibilities of the role, and opportunities for new employees to share their own hopes and goals for the position. All of these components together enable employees to hit the ground running as soon as they start the job.

Effective onboarding is important for remote employees as well. While there may be no office tour, getting to know your remote co-workers is all the more important because communication won’t come as naturally. Employees won’t bump into each other in the elevator or when having lunch. A remote onboarding process must include a thorough orientation with the entire team to minimize the initial intimidation new employees face.

Encourage employees to work with their new teams – and to get exposure to other teams as well.

Check out our 9 best practices for onboarding new employees.

2. Prioritize Employee Recognition Efforts

When it comes to HR best practices for employee retention, prioritizing employee recognition is high on the list.

If an employee doesn’t feel appreciated, it’s unlikely they’ll stay long with your company. And while you may think you do a good job of celebrating your team members, 39% of employees report they don’t feel appreciated at work.

This is why it’s vital for HR to encourage their company to invest in employee recognition programs. Making a conscious effort to recognize when co-workers succeed is a huge boost for employee morale, as it shows employees that management sees them and appreciates their hard work. Recognize positive contributions, and encourage team members to do the same for their peers.

If an employee shows up every day, never misses a meeting, always goes above and beyond to help their co-workers, and is never recognized for their hard work, they’ll begin to internalize that lack of appreciation. Why are they working so hard for a company that doesn’t notice them? Over time, they’ll move on to a company that appreciates their hard work.

Recognition programs are essential to an employee retention plan, as they make each team member feel like the work they do makes a difference. When employees feel valued, they’re far less likely to look for work elsewhere. Employee recognition programs boost morale, engagement, and company loyalty, which makes these programs invaluable to any organization that wants to improve employee retention.

Recognition programs could include:

• Public kudos at a team meeting.
• Private kudos in an email or one-on-one meeting.
• Extra time off for balance and employee well-being.
• An office lunch after a project is successfully completed.
• A gift for notable employee anniversaries.

For more ideas, read our ultimate guide to employee recognition.

3. Encourage a Healthy Work-Life Balance

Companies with high employee retention rates encourage a healthy work-life balance.

Workplace stress is a clear and present danger to employee wellness. Prolonged stress doesn’t just affect mental health with things like anxiety and depression; it can also lead to physical ailments like diabetes, asthma, arthritis, high blood pressure, and heart problems.

If your team constantly feels overworked, like they never have any free time to relax, exercise, or spend with their family, it’s very likely they will burn out. This burnout could result in a leave of absence. Even worse, the situation may become so strained that the employee sees quitting as the only option for preserving their own wellness.

A healthy work-life balance is crucial to reducing burnout in employees. Prioritizing work-life balance in your company values and making it a key piece of your workplace culture demonstrates to employees their company cares about them. This increases morale and employee retention. Why would an employee leave if they know their company values their wellness and understands they have a life outside of work?

Looking for retention ideas? HR pros can encourage management to prioritize a healthy work-life balance with work-from-home or remote work opportunities and flexible schedules. What about making the last Friday of every month a wellness day? Promoting a healthy workplace culture is hard work, but it is a worthwhile investment.

4. Drive Engagement to Build a Committed Workforce

High levels of engagement can help your retention rate.

Employee engagement measures an employee’s dedication and enthusiasm for the work they do. Engaged employees are satisfied with their work and believe their employer has their best interests at heart. In turn, this makes employees much more productive, efficient and committed to the company.

Seek out employee feedback through surveys, town halls or one-on-one meetings. Ask your team if they’re happy in their role or what they’d like to see done differently. Employees want to feel like they’re an important part of the organization. Engaging them directly and incorporating their feedback is essential to keeping them engaged.

Learn more about the essential role of HR in employee engagement. 

5. Evaluate Current Employee Perks

HR professionals must work with the decision-makers to evaluate current employee perks. What can be improved? What can be added? What isn’t working anymore? Be sure to seek employee feedback when making these decisions. Ensuring employees feel heard is critical to employee satisfaction.

Employee perks could include:

• Flexible hours
• Unlimited paid time off
• “Bring your pet to work” day
• Catered meals and free food
• Fun team-building activities (like an escape room)
• Company swag
• Peer mentoring
• An exercise or meditation space

Consider a variety of options to enhance your team’s experience. Collaborate with both management and employees to identify the perks that will add genuine value to the workplace while remaining cost-effective.

Prioritizing perks that align with employee satisfaction and retention will ensure your efforts are impactful.

6. Look into Wellness Programs

Similar to employee perks, employee wellness programs encourage team members to prioritize both their physical and mental health. They’re a set of benefits and activities companies offer to their employees to facilitate healthy habits both inside and outside of the workplace to elevate employee engagement, productivity, satisfaction and retention.

HR pros must make it clear to company decision-makers why wellness programs are such a worthwhile investment. What incentives can you offer team members to encourage them to eat right and exercise regularly? How could you turn it into a friendly team-building exercise?

Think outside the box — and always ask employees for feedback before implementing any wellness program. Wellness programs are an important part of overall employee well-being.

Read our 7 top benefits of employee wellness programs.

7. Emphasize Professional Development and Career Advancement

Employees don’t want to feel stagnant in their careers. If there’s no room to grow within the company, they’ll move on to greener pastures. According to Gallup, 87% of millennials rate professional development opportunities as a major factor in job satisfaction.

Considering millennials make up the largest part of the labor force in the U.S., it’s crucial that businesses invest in training programs to help employees focus on developing new skills.

Ask employees about the skills they most want to optimize, and ask management about a budget. A comprehensive, multi-faceted development program could focus on building technological skills, soft skills and personal development. It could also include networking or career advancement opportunities. Help employees with upskilling while also fostering the development of new skills.

If the company cannot provide robust training programs for financial reasons, emphasizing the importance of professional development could look more like reimbursement for courses or books employees buy themselves to hone their skills during their personal time.

8. Monitor the Employee Experience

The employee experience is not just one thing; instead, it is a combination of things. HR must monitor the employee experience to ensure each member of the team is satisfied with their current role as well as the company culture. It’s been said many times before: You can’t change what you can’t measure.

Put KPIs and metrics in place to measure employee engagement and job satisfaction. Are your engagement efforts working? Are team members happy with your company’s perks and wellness programs? Do people feel like there’s room to advance their career with your company? Do employees feel recognized? Do they feel they have a healthy work-life balance?

Gauge employee engagement by using routine surveys. Set goals when it comes to your employee net promoter score, retention rate, and current talent. Take time to collect feedback and thoroughly analyze it to determine how your organization can improve the employee experience.

9. Hire for Employee Fit

Since employees play a major role in determining and defining your company culture, when it comes to new hires, HR must consider not only who is a good fit for a specific job but also who is a good fit for the organization.

Ensure you hire the right person for the job by crafting detailed job descriptions, outlining future professional development opportunities, and showcasing your company culture. Consider bringing in other team members to help gauge the personality and culture fit of candidates.

Having both an internal and external talent pool of potential candidates drastically minimizes the chance of making a bad hire and ensures you choose the best employees even in an emergency.

Here are 7 talent management strategies for success.

10. Take Exit Interviews Seriously

Despite HR’s best efforts, employee turnover is inevitable, regardless of how well you pay or how phenomenal your company culture is. While it can be sad to see a team member go, you must use the time to conduct effective exit interviews.

Exit interviews allow you to dig deep into the employee experience and gather direct feedback from someone who is now able to speak openly.

During exit conversations, take feedback seriously, especially when you notice any trends in what you’re hearing from employees. Did they have problems with any team members or management? Did they not feel the organization did not effectively prioritize work-life balance? Did they feel underpaid? Did they feel their feedback was implemented or ignored?

This feedback can be invaluable to the organization. Addressing feedback when someone leaves can help prevent more employees from leaving in the future.

Continue to Hone Your Retention Strategies

Employee retention is a cornerstone of your organization’s performance and its culture. These strategies can help reduce turnover and foster an environment where employees thrive, driving both satisfaction and productivity.

As an HR leader, your role is to implement these strategies with intentionality. This means creating structures for development, recognition, and balance that resonate with employees. Regular feedback loops and a willingness to adapt will ensure that your retention strategies remain effective over time.

When employees feel supported and valued, they stay – and that’s the foundation for sustained growth and success. Prioritize retention, and you’ll see the impact on both your workforce and your company’s bottom line.