In the post-pandemic world, employee retention has become a critical issue. 2021 saw the highest annual job mobility rate in a decade, with 1.3 million Australians changing jobs. What’s more, research suggests up to 84% of those currently employed could be considering a career move in the next 6–12 months. 

This kind of attrition puts pressure on organisations, undermining their ability to operate at peak productivity. It's expensive and dispiriting to have to start over again at square one, having already invested time and effort into another candidate. In this article, we examine the problem and discuss 10 ways to improve employee retention.  

Benefits of happy employees

By some estimates, replacing lost talent can cost as much as 150% of their annual salary. And, according to an Australian Human Resources Institute survey, that cost is on an upward trend, having doubled in the past 12 months. This is especially galling when one considers that studies suggest up to 80% of resignations are avoidable. 

Even before they have left, disengaged employees can hamstring performance. Organisations with low employee engagement have 18% lower productivity, 16% lower profitability, 37% lower job growth, and a 65% lower share price over time. 

Employee happiness is of critical importance to organisational performance. It should be a priority of any organisation to have a clear idea of how to keep employees happy and motivated at work.

Why workers leave

Many of the reasons workers decide to leave their company are entirely within the control of management. Some of the most common examples include:

  • poor relationships with team or direct manager
  • a lack of opportunities for professional development or career progression
  • a lack of appreciation, support, or recognition
  • tasks that are repetitive, boring, easy, meaningless or unfulfilling
  • inadequate compensation
  • dissatisfaction with company culture, mission, or direction
  • need for greater flexibility / better work-life balance 
  • feeling overworked or undersupported.

Reviewing the above list and considering how each of these dynamics might be affecting your organisation is the first step to putting in place an employee retention strategy. 

10 Employee retention strategies

With the key threats to employee retention identified, let’s turn to those areas where you can make a positive difference.

Salary

While salary and benefits may seem the most obvious determiner of an employee’s satisfaction, in fact, this is not the case. According to polls, just 24% of employees identify financial security as a persuasive factor in deciding to stay or go. Still, it’s important to ensure your salaries are competitive for your industry, but don’t assume pay rises alone will keep employees happy and motivated. 

Recruitment

One of the best ways to increase your chances of retaining employees is to hire the most suitable candidate out of the gate. That means being as upfront and transparent as possible about expectations, conditions and potential challenges for the role. Nobody is served when a role turns out to be different from what a candidate was expecting.

Onboarding and orientation

Research shows that effective onboarding can increase employee retention by 82%. Despite this, Gallup polling finds that a mere 12% of employees strongly agree that their organisation does a great job of onboarding new employees. Arriving at a new organisation is a major step for anybody, and is often accompanied by strong emotions, doubts, and uncertainty. The quality of the welcome an employee receives will make a significant difference to their ability to find their place within an organisation and, thus, commit to the long term.

Branding

With effective employer branding, employee turnover can be reduced by as much as 28%. That means directing marketing resources not simply towards communicating with potential customers, but also to current and potential employees. Posts celebrating your employees or reinforcing shared values and culture can be one way to build employer branding.

Training and development

Employees stay longer at organisations that invest in their learning. This is confirmed by the 53% decrease in employee turnover seen in companies with high training rates. In the health sector, research by Southern Cross University revealed that the delivery of training programs to new graduate nurses improved workplace culture and reduced staff turnover. Professional development is a driver of employee satisfaction and has obvious benefits for an organisation besides employee retention. 

Recognition and rewards systems

Recognition and rewards programs are a fantastic way of improving staff morale and organisation culture. They allow for moments of celebration between managers and their team members, which increases team cohesion, and set continuous positive examples for others to aspire to. 

Flexible work arrangements

The pandemic only accelerated a cultural and technological shift towards remote working. Now, 62% of professionals say they would consider leaving their job if it couldn’t provide them with their preferred flexible working options. The ability to work remotely, at least in some capacity, is becoming non-negotiable. Family and personal circumstances are more and more trumping salary or professional status. Certain employees have a legal right to request flexible working arrangements, and even with those who don't, businesses have to adapt to this remote shift or else risk losing valued employees.

Opportunities for advancement

Employees want to be able to feel a sense of progression and development in their career. That means having a clear idea of their pathway towards more senior positions in the organisation. Otherwise, they will look elsewhere.

Managers

It’s often said that employees don’t leave their jobs, they leave their managers. Indeed, Growth Faculty cites research that found 43% of employees have quit because of a bad manager and that 53% have ‘considered leaving’ for the same reason. Training programs targeting managers can have outsized benefits in not only improving manager performance, but also increasing employee happiness.  

Effective change management

Organisational change increases the possibility of employees quitting. However, this risk can, in some cases, be mitigated by intervention. When undergoing large transitions, it’s important to consider how this might affect employees, and what can be done to address their concerns. 

Conclusion

Carefully consider each of these ten areas in relation to your organisation to identify where you might need to direct more resources. At the end of the day, it will be time, effort and money well spent if it means saving your organisation the hassle of having to keep replacing disengaged employees. Of course, your approach will also depend on what industry you're in and what type of workers you are employing. Retaining seasonal workers presents its own challenges – check out our guide specifically on this issue to learn more.