7 Tips for Managing Employee Retention 2024

Over the past few years, the world of work has taken multiple hits. First with a global pandemic that left life as we know it at a standstill, followed by increasing inflation and a looming recession. All in all, let’s face it, it hasn’t been great and has subsequently left any workers feeling unsatisfied with their overall work conditions. 

A mass exodus from the workplace has come as a result, with individuals seeking improved employment opportunities to help them through these uncertain times. According to Cendex’s Labour Turnover Rates 2023 report the overall voluntary labour turnover in the UK was noted to be 13.8%, which means 1 in 7 employees handed in their resignation in the past year.

To this end, it goes without saying that turnover can be very expensive, costing UK companies around £7,729 to find and hire a new member of staff, which roughly translates to 26.1% of an employee's salary. 

In order for companies to combat these high figures, however, employee retention strategies must be put into place, to firstly identify employee motivations for seeking or maintaining a position and then set up effective changes to address them.

Why are employees leaving?

There are a number of reasons why employees choose to leave their job and they can vary depending on the organisation and industry. Some reasons may include: 

• Insufficient salary 
• A non-competitive perks and benefits package
• Lack of flexibility 
• Feeling overworked and/or unsupported
• Seeking better work-life balance
• Poor leadership 
• Little opportunity for advancement or career development
• Worry about company’s financial health and direction 
• Desiring a better workplace culture
• Lack of recognition 

By conducting exit interviews employers can gain helpful insight into employees’ perspectives of the company and better understand the reasons as to why they decide to leave. This can ultimately help identify whether the employee retention strategies in place are effective or if they should be reviewed. 

Tips For Effective Employee Retention 

1) Offer Competitive Salary 

Perhaps the most important thing on this list is offering a competitive salary. We’re sorry to say, but regardless of how many of the other strategies listed you offer, you cannot typically minimise turnover and maximise employee retention without paying employees what their time is worth. 

Not only should employees be paid fairly, but employers must ensure that their staff is paid sufficiently to afford the cost of living, taking into account factors such as inflation. With the ongoing cost of living crisis currently in the UK, this is more important than ever. Based on a survey conducted by HR software provider Ciphr, 76% of employees felt stressed or overwhelmed as a result of an increase to their cost of living, while 31% reported having asked their employer for a pay rise and 34% are already actively looking for a better paying job. 

Additionally, employees should also receive a pay rise every time their responsibilities increase or receive a promotion. Providing a competitive salary will inevitably make you employees feel more valued. Keep in mind that to hire and train a new employee is more expensive than simply raising the salary of an existing employee.

2) Encourage Better Work-Life Balance 

After the pandemic drastically changed how employees value work, promoting a good work-life balance is increasingly becoming one the main criteria for job seekers. 

Individuals are looking for employers and managers that understand they have lives away from work and recognise the importance of work-life balance as an essential aspect of their well-being and job satisfaction. Yet, work-life balance can come in many different ways such as:

• Remote work
• Flexible schedules
• Reduced workdays
• Encouraging employees not to check emails outwith working hours 

However, it’s vital that employers also model such an approach themselves in order to cultivate work-life balance as a principal value of the company. So, respect your employees’ time away from work to maintain a healthy relationship with them.

3) Recognise and Reward Employee Efforts

It should come as no surprise that employees who feel properly recognised and rewarded by their employers are much easier to retain and more likely to be satisfied with their working conditions. Aside from that, they’re also more likely to be productive in their role and work harder.  

Research has found that around 78% of employees would be more productive if they were recognised more frequently, while 83.6% reported that they feel that recognition affects their motivation  to succeed at their work. Still, the same research identified that only 52.6% of employees surveyed had recognition programmes at their company.

There are numerous ways you can implement recognition in your company, whether that would be in the form of a social recognition or monetary rewards, either way something must be put in place to encourage employees to work towards something. Rewards can include anything from cash, to gift cards, even perks such as paid time off. 

Even so, it’s vital to not only recognise employees for the results they bring in, but also their effort. In challenging economic times, reaching targets can be extremely difficult and perhaps impossible. While this can be very disappointing, it's essential for employees to feel that their effort is appreciated  to continue to work just as hard and not result in them feeling defeated.

4) Provide Wellness Offerings

Safeguarding employee health, whether that’s physical or mental, is imperative for a successful and functional organisation. According to studies, employees who are in good health are more likely to feel engaged and be productive at work, while those in good mental health are also less likely to experience burnout. 

Although offering things such as flexible or remote working can contribute to improved employee wellbeing, they're simply not enough to foster healthy employee wellbeing. They should in fact be shown that their health and safety matter and is valued, so consider offering things such as: 

• Sick pay to incentivise employees to stay home when sick
• Quality health insurance 
• Stress management programmes
• Mental health days to avoid and cope with burnout 
• Reimbursement for fitness classes and gym memberships
• Health and safety protocols for the office. 

5) Foster Professional Development Opportunities 

As new technologies and ways of working are constantly being adopted, a proficient company that recognises the importance of training and upskilling its employees, not only to stay ahead of the competition, but also for their retention, is one that is likely to succeed.  

Data found that 83% of employees view learning and (L&D) as a “vital factor” when choosing their employer.

That being said, investing time and resources toward employee upskilling will undoubtedly make them happier and more likely to stay with your company, but will also be beneficial to the company, through directly addressing potential skills gaps. 

Allow them time away from work to attend conferences, provide tuition for continuing education or offer training programmes within their field. Either way you decide to approach this, make their professional development a priority. 

6) Boost Your Benefits Package 

Benefits packages can go a long way to encourage retention and they come in various ways. In combination with offering flexible working and a competitive salary, an enticing benefits package will certainly make your company even more desirable to employees. Introduce benefits such as:

• Employee discount on food shopping or phone services
• Cover work-related travel costs
• Comprehensive health care coverage 
• Lower rates for car rentals
• Eye test and prescription glasses discounts.

These can also be taken a step further by reaching out to local small businesses to create connections and secure offers on their products for your employees, such as restaurant and café discounts. 

7) Offer Continuous Feedback on Performance 

Many employers are beginning to abandon the dated and inefficient annual performance review and are instead adopting more frequent and personal meetings with team members. 

These meetings allow employees to feel more comfortable to be open and honest with their managers about their progress, concerns and aspects of their job they feel unsatisfied with, since they promote a safe place for open conversations. 

They’re also a great opportunity for employers and managers to speak to staff about their short and long term professional objectives, provide them with constructive feedback and help them envision themselves in the company’s future as a valued member. 

Although you should beware of making promises you can’t keep, these meetings are a notable way to set out a realistic plan for employees to reach their professional goals, while allowing them to identify their dissatisfaction before it’s too late.

Altogether, the list above provides excellent examples of employee retention strategies to decrease turnover and keep efficient staff on board. In times of financial difficulty, where skilled and talented staff are hard to find, this is exceptionally important to safeguard your company’s future and success.

Help increase your company’s retention strategies by gaining a recognised and sought-after HR CIPD qualification with DPG today.