10 Strategies We Recommend for Improving Employee Retention Rates
You might think you have a great team that’s happy at work. Then one day, your top performers hand in their resignations and let you know that they’ve been feeling undervalued for months.
Of course, your employees will always think about what’s best for them. But if they’re compelled to constantly look outside your organisation for growth opportunities, you have a major problem.
If you want to avoid the stress that comes with high employee turnover, you need to be able to understand your employee retention rate. You’ll often find that it has less to do with offering liveable wages and more to do with creating a sense of purpose and connectedness in the workplace.
So, join us at Thankbox as we explore what your employee retention rate is, how to calculate it, why it’s important, and how you can improve it to keep your employees onboard.
Let’s get started!
What is the employee retention rate?
Your employee retention rate is an essential metric that measures the percentage of employees who stay at your organisation over a specified period of time. The higher the percentage, the higher your retention rate.
Here’s how you can calculate your employee retention rate:
Choose a time period—this could be a month, a quarter, or a year.
Determine the total number of employees at the start of the period.
Determine the total number of employees at the end of the period.
Determine the number of new hires made during the period.
Calculate your retention rate using the following formula:
Retention Rate = ((Total Number of Employees at End of Period – Number of New Hires during Period) / Total Number of Employees at Start of Period)) x 100
For example, if you started the year with 500 employees, ended it with 460 employees, and hired 20 new employees along the way, your calculation would look like this:
Retention Rate = ((460 – 20) / 500) x 100 = 88%
This means that your company was able to retain 88% of its employees throughout the year. The goal of this metric is to discover your overall workplace satisfaction and highlight the effectiveness of your organisation’s retention strategies.
Note: You need to subtract new hires because if you don’t, you’re calculating the headcount change rate, not retention. It’s possible for a company with an abysmal retention rate to have a high headcount change rate if it hires employees faster than it loses them.
Why should you know your employee retention rate?
Reduce company costs: It’s no secret that recruiting and training new employees is a costly and time-consuming process. By maintaining a high retention rate, you can reduce your recruiting frequency, save your organisation a ton of money and avoid potential operational disruptions.
Improve employee engagement: By understanding your retention rate, you can implement initiatives to help your employee engagement. This could be strengthening your company culture, developing talent pipelines, and improving motivation strategies.
Foster a Sense of Belonging With Thankbox!
Why not show your employees that they’re appreciated for more than their output by sending a Thankbox? Bring the whole team together and create memorable moments for your employees.
Boost employee productivity: The more stable your workforce, the easier it is to stay productive. Too much turnover can undermine your staff morale and cohesion because your employees can either feel insecure about their job stability or overwhelmed with constantly having to adapt to new team dynamics.
Uncover recruiting issues: Your retention rate can help you discover which roles and departments are facing the most challenges, allowing you to appropriately come up with better recruitment solutions for them.
Essentially, when you have a good grasp of your employee retention rate and the factors that influence it, you can take proactive steps to improve your employee happiness and overall operational efficiency.
10 ways to improve your employee retention rate
Now, let’s dive into our 10 strategies to help you improve employee retention:
1. Offer enticing compensation and benefits
While money isn’t everything, you still need to make sure that your compensation packages are pretty competitive within your industry. It not only helps you attract high-quality talent, but you’ll be able to encourage them to stay with your company, as they’re being compensated adequately for their skills.
Related: Check out our guide to total rewards and learn how total rewards packages can drive employee retention.
2. Consistently recognise your employees (and celebrate them)
Recognition in the workplace is often underrated, but it’s a game-changer for making employees feel valued. Undoubtedly, appreciation boosts morale, cultivates a culture of respect, and motivates your team to keep doing their best.
With Thankbox, you’ll have the unique opportunity to say ‘thank you’ as a team. Our online group greeting card allows you to big up achievements with personalised messages, quirky GIFs, and photos and videos to make the celebration a memorable one.
But that’s not all. You can even elevate your e-cards by adding a bouquet of flowers or allowing everyone to contribute to a digital gift card that your recipient can redeem at over 700 retailers, or as a Prepaid Visa gift card.
2. Foster a positive company culture
Investigate if your employees are experiencing a lack of trust, inclusivity, or respect in the workplace because this can move them to seek organisations that better align with their values.
A positive company culture encourages teamwork, collaboration, and a sense of belonging, which are critical for retention. You can even start off by bringing everyone together to celebrate personal milestones like birthdays.
3. Make it possible for your employees to grow
If you restrict your employees to their current roles and don’t provide a clear path for advancement, they’re probably going to start looking elsewhere to meet their aspirations. Invest in mentorship, development programs, and consistent performance reviews to provide your employees with the support they need.
Also, make sure to prioritise promotion from within so that your employees know that you believe in them and they’ll be more motivated to improve their performance.
4. Emphasise work-life balance
A company that overwhelms its employees with excessive work demands is a breeding ground for burnout. And since employees are more conscious about a healthy work-life balance, they’ll look to organisations that can offer that.
Make sure to show your employees you respect their personal time through hybrid work options, adequate personal time-off, and ensuring workloads are reasonable.
5. Strengthen your communication channels
Open and transparent communication is paramount for fostering trust. It also ensures your employees feel heard and informed about the organisation’s direction and their unique role in it.
Make sure to incorporate feedback sessions and an open-door policy so that you can maintain healthy communication in the workplace.
6. Give your employees some autonomy
Your employees want to know that their opinions hold weight. So, involving employees in certain decision-making processes can make them feel valued and more invested in the company’s success. Don’t hesitate to solicit their input on projects, policies, and new initiatives to enhance their commitment and job satisfaction.
7. Don’t underestimate health and wellness
Show your employees you care about their well-being by supporting their physical and mental health. You can do this through wellness programs, gym memberships (for those willing), stress management workshops, or access to counselling services.
Healthy employees are happy employees!
8. Work environment matters
Your work environment isn’t restricted to just comfy chairs and an aesthetically pleasing setup. It also extends to your management and leadership styles. If your employees feel undervalued, micromanaged, and unsupported, they’re more likely to seek healthier work environments.
So make sure your management communicates clearly, sets realistic expectations, empowers their teams, and proactively addresses issues.
Foster a Sense of Belonging With Thankbox!
Why not show your employees that they’re appreciated for more than their output by sending a Thankbox? Bring the whole team together and create memorable moments for your employees.
9. Listen to and act on employee feedback
Simply ask your employees what they need. Create reliable feedback channels for them to openly, and without judgement, express their concerns and suggestions. If you want to make sure you get honest feedback, you’ll need to use anonymous feedback tools so that your employees are more comfortable.
When you collect the feedback, make sure to act on it!
Wrapping up
All in all, a good compensation isn’t going to keep your employees around. You’ll need to foster a positive company culture, celebrate employee wins, and provide pathways for your employees to grow from within. By implementing our 10 suggestions, we’re sure your retention rate will soar.
By simplifying the act of giving, Thankbox encourages a culture of generosity and appreciation, which are key factors in employee satisfaction and retention. So, why not create a Thankbox today and show your employees how much they’re appreciated.
Images: Cover | Documents | Colleagues celebrating a birthday | Happy woman wearing a grey shirt | Young females training together | Colleagues looking at a laptop screen
