Employee Retention Strategies and Ideas

All companies, regardless of size, are struggling with how to keep employees from leaving for more money or better opportunities. Studies consistently show that even though employees may say they are leaving for more money, when those same employees are asked several months later why they really left, the money factor is about 5th or 6th on the list. The first few reasons include lack of recognition, disagreement with the culture or direction of the company, poor treatment by their boss, lack of excitement about their growth prospects, and poor relationships with co-workers.

Did you know that studies have indicated that it will cost a significant amount of money to replace an employee? How much? When you add the costs of finding an employee, training the new employee, lost productivity and filling in for the employee who leaves, the cost can easily equal 150% of the base salary of the person who left. So, if you are paying someone $50,000, the cost to replace that person will be approximately $75,000. This money comes out of your hard-earned profits.

This is one of the key reasons that companies are focusing so much effort on keeping their current employees. How can you increase your chances? Listed below are a number of ideas you may want to consider.

  • Ensure you offer competitive compensation.
  • Ensure you offer basic health care benefits at reasonable rates. Consider adding lifestyle benefits that are cost effective (read easy on the cash flow).
  • Find out what employees want from their career and do what you can to provide for their needs.
  • Be as flexible as possible about how the work gets done.
  • Be as flexible as possible as to when and where the work gets done. Can it be OK for an employee to take a few hours off to attend to a family or personal matter if they can accomplish the job at their home in the evening?
  • Take a real and genuine interest in people’s career aspirations and personal lives.
  • Catch people doing something right…frequently recognize positive contributions to the company.
  • Communicate company progress, financial news, major customer or sales activities on a regular basis. Follow up on your commitments to provide information or answers.
  • Have regular (bi-weekly or monthly) meetings with all employees where they can ask you questions about your plans, company progress, new developments to look for, etc. Be accessible to them so you can learn their needs. If you can respond to their needs before they become real issues, they won’t begin looking for greener grass.
  • Ask former employees why they resigned. Even if they left six months ago, they still have a valid perspective.
  • Routinely ask employees what you can do to make the company a better place to work. Set boundaries if necessary as to what items are not negotiable; such as ownership in the company or 50% per year salary increases.
Keeping people is arguably the most challenging aspect of running a business today. The answer lies in the fact that there is no one set of answers. People are different, so their reasons for doing anything are different. Successful companies today ensure they know what makes their best people different, and they work hard to see that those needs are met. Hopefully, some of the ideas mentioned above will spark some useful ideas for your unique company and your unique group of employees.


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