While employee retention is one of the most important aspects of a business’s success, keeping staff around and happy is no simple task. A 2022 survey of over 13,000 U.S. employees showed that their top motivating factors are:
- Better pay and benefits (64%)
- More work-life balance (61%)
- Jobs aligned with their strengths (58%)
Do you notice that better pay and benefits are only 3% higher than more work-life balance and only 6% higher than jobs aligned with strengths? Most people think to keep people you have to pay them more–but that’s not your only option! To retain staff and reduce turnover rates, there are 12 data-backed strategies to help keep people in your company.
Top 7 Reasons Employees Quit Their Job
It’s no secret that hiring and training employees is a costly endeavor. On average, companies spend nearly $2,000 onboarding and training each new employee. If things don’t work out, the bottom line is even direr: employee turnover accounts for over $11 billion in annual losses.
But why do people quit their jobs? According to data, here are the most common reasons:
- Toxic company culture: According to a 2022 survey of 1,000 U.S. employees who resigned in 2022, over 30% cited toxic culture as their primary reason. Workplace discrimination, verbal abuse, poor communication, and sexual harassment have no place in a healthy workplace that wants to retain employees.
- Problems with management: This 2021 survey of over 2,000 employees across 15+ industries found that 60% blamed a lousy manager for their desire to leave within the following year.
- Lack of appreciation: People tend to “check out” when they don’t feel valued. Over 65% of employees say they would quit if they think their hard work or above-and-beyond efforts go unrecognized.
- Low pay: The Pew Research Center found that over 60% of surveyed workers quit their jobs in 2021 because of low income. With the rising cost of living, employees are searching for the best salaries and benefits for their skillset.
- Feeling burnt out: When cuts in the budget and stakes run high, people quickly become susceptible to poor work-life balance and burnout. They may leave in search of lower-stress jobs. Quitting a job due to burnout is especially common amongst Gen Z and Millennials in the workplace.
- No flexible work options: When the world shifted online in 2020, people realized they didn’t have to be in the office all the time. Employees are more likely than ever before to quit their job due to a lack of schedule flexibility or the absence of remote work options.
- Lack of career advancement opportunities: In a 2021 survey of over 6,000 working adult Americans, over 60% said that a lack of opportunities for advancement was the primary reason they left their job. People want to feel like their current career has upward mobility and room for growth.
How to Retain Good Employees: 12 Science-Backed Tips
Fortunately, keeping good workers isn’t rocket science. As a business owner or manager, you can transform your workplace with new systems, incentives, and leadership tactics.
Moreover, developing your communication and people skills can dramatically accelerate your ability to create a positive workplace worth staying in. Here are the top employee retention strategies for companies of all sizes:
Improve your hiring and onboarding processes
Stellar employee onboarding can improve retention rates and boost productivity by over 70%. If you dig into the root cause of people quitting their job, you’ll probably discover it wasn’t a good fit from the beginning.
The best investment you can make in employee retention is creating a solid onboarding process.
Looking at your hiring strategy, onboarding process, and training protocol, you may notice gaps in your systems that should be weeding out quitters from the beginning. Ask yourself:
- Do your job descriptions accurately portray the position?
- Do you make it easy for the employee to learn tasks?
- Are you properly vetting applicants based on their attitudes, enthusiasm, and capabilities?
- Are you hiring overqualified people for a job where they’ll quickly get bored?
- Does your initial training cover the full range of job tasks and expectations?
- Is the overall experience for a new employee sluggishly slow or fast-paced and exciting?
- Do you offer opportunities for unique connections, such as onboarding lunches or new employee welcoming traditions?
Improving these things may seem menial, but they’re crucial to hire the right people and get them off to a positive start. After all, an employee’s first impression of your company sets the tone for their entire tenure.
Action Step: Learn Google, Amazon, and Facebook’s Secrets to Hiring the Best People. You may be surprised by their tactics, like making the interview schedule confusing and unpredictable so you can find people who don’t need instructions.
Increase employee engagement and motivation
Employee engagement strongly correlates with employee retention. People like to feel like their work matters. They need a connection to the company mission that makes them care about their job and feel invested in the company. According to Gallup’s State of the Global Workplace 2022 Report:
- Highly engaged teams are more productive.
- Units with low engagement have higher turnover rates.
- Employee stress is at an all-time high (leading to less attention).
- Investing in employee wellness can improve concentration.
Action Step: Try these 20 Awesome (& Fun) Ways to Motivate Employees, such as promoting workplace friendships with communal lunch tables or regularly surveying employees for their opinions about ways you can improve the workplace. Easy ways to start:
- Promote workplace friendships by setting up a birthday calendar and new birthday traditions
- Change up your work environment or encourage employees to personalize their workspace
- Learn each of your colleague’s goals and cheer them on
Show employee appreciation
It should be no surprise that employee recognition programs reduce employee turnover by over 30%. Nearly 70% of employees say they’d work harder if their efforts were more appreciated.
The BIG problem: Not everyone feels appreciated in the same way. Dr. Gary Chapman found there are 5 appreciation languages. Find out your colleague’s appreciation language so you can make them feel supported in the way they prefer:
People respond remarkably well to genuine gratitude. It gives them a reason to keep showing up every day. Who wants to grind away 40 hours weekly for a boss who never notices your above-and-beyond efforts? Appreciation is like the fuel that keeps team morale up and running. Without it, employees can quickly become disengaged and seek employment elsewhere.
Employee appreciation makes people feel like a valuable part of the team. It also helps build a company culture of trust, teamwork, and positive recognition.
Action Step: Here are 30 Fun Ways to Make Employees Feel Valued & Appreciated. Public praise? Little notes of appreciation? Delivered food? Team retreats? Yes, please!
Reward high performance
If recognition fuels employee morale, rewards are like tasty road trip snacks. Recognition keeps the vehicle running while the snacks keep the driver focused and excited about the road ahead.
This 2018 survey found that nearly 70% of employees would be motivated to remain at their current job if they got more rewards and recognition.
Action Step: Rewards for high achievers can come in bonuses, promotions, gifts, team-building experiences, or even retreats. Here are the 43 Best Employee Appreciation ideas by Industry, plus How to Announce a Promotion (The Fun Way). Here are some easy ones:
- Have team members write a short note highlighting their coworkers’ successes
- Host a private holiday party that treats your staff like VIPs
- Invite remote workers for a virtual happy hour and mixology class
- Gift your team company swag
A whopping 80% of employees report feeling stressed out at work because of poor communication. Workplace communication includes any type of interaction about work, from assigning tasks to sharing project updates to giving feedback.
The way you talk to your team (whether virtually or in person) drastically impacts their motivation, performance, and overall feeling about the workplace. When people are confused about their job tasks or feel disrespected by management, they may seek work elsewhere.
Instead, effective communication in the workplace has these characteristics:
- Clarity: Whether you’re sending an email or answering an off-the-cuff question, your message is clear and straightforward. You avoid wasting time or energy on confusing instructions. Employees are sure about what they need to do, how to do it, and when they need to get it done.
- Two-way communication: Feedback and opinions come from both team members and management. Instead of feeling like they’re being “talked at” by their boss, people feel free to share their perspectives.
- Respectful: No matter who you are talking to (or what mode of communication), there should always be a tone of professionality and respect. This means no angry outbursts, profane language, or condescending tones.
- Conflict resolution: When problems arise, higher management should have systems and methods for resolving the conflict. Managers remain solutions-oriented and never point fingers or cast blame on staff members.
Action Step: Here are 10 Effective Ways You Can Improve Your Communication Skills to teach everyone on your team. As a leader, you can learn to leverage the power of tiny communication signals to improve your relationship with your employees. Vanessa Van Edwards’ book Cues can help you become a master at charismatic communication in the workplace and beyond.
Unlock the Secrets of Charisma
Control and leverage the tiny signals you’re sending—from your stance and facial expressions to your word choice and vocal tone—to improve your personal and professional relationships.
Invest in employee success with career development
When people feel like they’re working a “dead end” job, they start acting like it. Giving your employees learning opportunities can improve engagement and encourage them to stick around.
On the flip side, employees who don’t see a path forward in the company are less likely to see a future with your company. Not only does career development improve day-to-day employee performance, but it also gives them a goal to work toward.
Career development creates a self-perpetuating cycle of loyalty: the employer invests in their team members to demonstrate that they care about their career trajectory. As a result, the employee gets to learn new things and work toward higher-level positions, making them feel more loyal to the workplace that invested in them.
Action Step: Professional development can be as simple as a weekly communication exercise or creating a team book club. Consider hosting a monthly workshop with a relevant professional to help employees learn new skills. You can also set aside funds to send your staff to annual conferences in your industry. Consider:
- Bringing in a speaker to train your team on soft skills that would help make their job easier
- Buying a helpful book for the entire team to read together
- Creating career development plans for each of your top team members
Provide mentorship programs
A mentorship program is one of the best professional development benefits because it’s:
- Productive: By experienced grouping staff with less experienced team members, you can improve the whole team’s productivity.
- Relatively cheap: You likely already have the veteran staff on hand to take newbies under their wings.
- Job-focused: Instead of trying to build skills outside the workplace, mentorship can occur on a daily and weekly basis while working on specific tasks related to an employee’s position.
This can boost employee retention rates because it helps new hires feel like they have someone guiding them. At the same time, people who have been in your organization for a long time may feel a renewed excitement about their job because they get to mentor someone beneath them.
Action Step: Whether you want to directly mentor employees or group them with your most experienced staff members, define specific goals for every mentorship pairing. Do you want the mentor to help the employee become more efficient at a particular task? Can you pair your employee with a mentor who shares their interests or holds a position they have expressed interest in? Be sure to keep mentorships mutually beneficial. Learn these 5 Coaching Techniques to Turn Your Employees Into All-Stars.
Create an incredible company culture
Company culture is among the most critical aspects of a healthy workplace. Younger generations of workers are primarily concerned with the overall vibe of their job.
“[Company] culture is freedom of expression, freedom of creativity, and, of course, from organization to organization there are these subtle nuances, but generally to us, that’s what it means.”—Zach Suchin
It’s essential to define your company culture to attract the right personalities. For example, Lululemon Athletica is a Canadian-based athleisure retail corporation with a significant emphasis on wellness and personal development.
Their company culture includes free yoga and fitness classes, professional development coaching, and plenty of healthy snacks in the breakroom. As you can imagine, this mindful yoga-vibe culture shows in their recruiting process. They tend to attract and retain employees who are particularly passionate about what the brand is doing.
Action Step: Learn How to Create an Incredible Company Culture with Exceptional Hiring with Zach Suchin and watch the video for more insights:
Encourage work-life balance
Without work-life balance, employees can quickly become stressed, aggravated, and less sure about their dedication to their job. People who feel burnt out and overextended simply don’t want to stick around. Gen Z and Millenials are statistically the most likely to quit their job due to burnout.
Integrating work-life balance into your company culture may look like this:
- Check-ins to prevent work overload or overwhelm
- An “open door” policy to discuss situations where work is impeding employees’ wellbeing
- Flexible policies that allow people the freedom to create their schedule
- Avoid discussing work topics at lunch or happy hour
- Clearly defined work hours (especially for remote teams)
- Taking company-wide vacations so everyone is offline at the same time and no one feels pressured to check-in
Action Step: Encouraging work-life balance starts from the top down. If you’re the manager or business owner who misses your kids’ plays to stay in the office or texts employees with work after-hours conversations, you may be setting the wrong example.
Start with your balance and then extend what you learn to your team. You can teach your employees How to Fight Burnout and Get Unstuck in 11 Empowering Steps.
Create a staff wellness program
Investing in the health of your employees can reduce healthcare costs and improve retention rates. The average ROI for employee wellness is six-to-one, thanks to fewer sick days and higher productivity. Employees also tend to be happier, less stressed, and more motivated when their company demonstrates an interest in their well-being.
Wellness programs can include:
- Free health screenings
- Nutritional education
- Group workout classes or gym memberships
- On-site healthy food options
- Mindfulness and meditation app subscriptions
- Tobacco cessation programs
- Weight loss programs
- Personal or life coaching
Action Step: Help your workers stay healthier to be happier at work. Try implementing a new employee wellness program using this guide. Don’t forget to ask for feedback and focus on wellness experiences that your team is genuinely interested in.
Provide continuous performance feedback
There is a clear correlation between employee motivation and receiving feedback. Surveys show that over 90% of U.S. workers want job performance feedback more frequently than yearly. Casual weekly or monthly check-ins ensure that significant problems or minor workflow blockages are acknowledged as they arise.
Action Step: If you don’t already, organize weekly or bi-weekly check-ins with every employee. Consider taking a casual walk around the building or chatting on Zoom to ensure that it is a low-pressure, free-flowing conversation. Ask every team member:
- How are your current projects going?
- What kind of assistance (if any) do you need from me?
- In what ways can I better support you?
Make work more flexible
According to research, 60% of employees assert that flexibility would make them feel more empowered. But as Harvard Business Review points out, the desire for flexibility is about autonomy. People don’t want to feel like their boss is the “mom” over their schedule:
Team members want to feel like they have the freedom to manage their time and design their schedule, which is some of the biggest reasons remote work is so popular.
Providing people with flexible autonomy shows them that you trust in their skills and capabilities. You don’t need to micromanage or look over their shoulder. Instead, you enable them to take ownership of their tasks, leading to more engagement and job fulfillment.
Action Step: If remote work is possible for your company, reference The Definitive Remote Work Guide so you can adequately manage a partially remote or fully-remote team.
If you need to have people on-sight, see if there are ways you can add more flexibility in scheduling and task assignments.
For example, instead of mapping out exactly what a team member will do on a given day, give them a list of priorities for the week and allow them the autonomy to design their schedule. You can also give people more freedom over their break and lunch times.
Key Takeaways: Employee Retention is All About An Enjoyable Work Environment
People stay with their employers because they genuinely enjoy working for that company. People are more likely to leave when they feel bored, disrespected, or underappreciated. The keys to retaining your top talent include:
- Streamline hiring and onboarding: Set every new hire off to a good start by streamlining your training processes to set a positive tone for their full employment.
- Improving employee engagement: Make sure people get to focus on their “zone of genius.” Assign them projects they are legitimately interested in.
- Practice respectful, direct communication: Nobody wants to have a disrespectful talk.
- Prioritize communication: Communication training for all levels of management is crucial to ensure that people don’t leave the organization due to mistreatment.
- Invest in employee success: Offer professional development and demonstrate that you care about your workers’ career trajectories.
- Encourage wellness and balance: Prevent burnout by setting a good example and creating employee wellness programs. After all, healthy workers tend to be happier and less stressed. Happier workers are more productive and less likely to quit.
Perhaps the adage “people don’t quit their job, they quit their boss” is true. Do you want to take your team leadership to the next level to keep more employees around? Here’s How to Be a Good Boss with Immediate Actionable Steps.