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Employee turnover occurs in every industry, and while the departure of one or two employees may not be cause for alarm, a mass exodus should be a concern.
Findings from Robert Half’s Job Optimism Survey show that of 2,500 professionals, many respondents remain confident of finding or landing a new role in the current hiring market.
This confidence gives employees more power to seek better opportunities and higher salaries elsewhere, putting their current employers at risk of losing top talent. Therefore, employers need to be vigilant about losing top performers by focusing on employee retention strategies.
This article will explore why employee retention is important, explain how to retain employees using effective strategies, and offer additional tips to help you build a stronger workforce.
Why are workers leaving their jobs in 2025?
Workers leave their jobs for better opportunities due to several factors, one of which is the lack of career growth opportunities within their current organizations. This drives employees to seek fresh challenges and growth prospects elsewhere.
Another major but often overlooked factor is poor managers. We know the maxim "employee leave manager, not companies." Research has shown that bad managers have been responsible for over 57% of workers leaving
Some of the reasons cited for workers leaving are:
- Poor salaries/wages
- Poor company culture
- Childcare issue
- Lack of diversity, equity, inclusion, and belonging
- Overstressed or burnout due to excessive workloads
- Undervalued and not appreciated
- Ineffective leadership and management skills
- Finding a new purpose
- Poor work-life balance
Why is it important to retain employees?
Workers are the heart of every company and play an indispensable role in driving its success. They are the wheels that keep the company moving. Hence it's crucial to retain them. Retaining employees has benefits abound, which shall be discussed below:
1. Increased productivity
Retaining employees comes with two-fold benefits — it instills confidence in them to continue performing at a high level and inspires their colleagues to do the same. This can result in a workplace with a group of enthusiastic, positive mindset people, which can increase productivity and business growth.
2. Stronger workforce
When workers remain in their positions for extended periods without frequent replacements, they gain a comprehensive understanding of their roles and responsibilities. This deepens their expertise, leading to increased task efficiency. Additionally, it promotes effective team building, which plays a pivotal role in business success. Over time, working together fosters cohesiveness and a shared understanding of each other's strengths and weaknesses.
3. Reduced costs
Replacing a skilled employee can be expensive and significantly impact the company's budget. Searching for and onboarding a new employee is time-consuming and can impact the company's budget. According to Credly, investing in employee retention shields you from some hard costs, such as:
- Administrative costs involved in the process of exit interviews and employee departure
- Costs related to severance packages
- Training and onboarding for the new hire
Plus, prioritizing employee retention also helps lower turnover because existing employees have more substantial productivity levels and are more likely to stay with the company longer.
4. Increase in employee engagement
Retaining employees enhances their sense of security and fosters a belief that their company values their contributions. This increased loyalty, motivation, and engagement drive the company toward success. Also, engaged workers are often “optimistic, team-oriented, and selfless.” With engaged workers, your organization is better positioned to meet its goals, according to SHRM.
5. Improved morale
Guaranteeing fair wages, providing career advancement opportunities, and cultivating a positive work culture and environment foster camaraderie and teamwork among employees. This, in turn, nurtures a cohesive and supportive workplace culture, ultimately enhancing employee morale.
10 Effective strategies for retaining employees in 2025
Looking at the importance of employee retention above, it’s irrefutable: an effective retention strategy is a win for your organization and your employee. To help you with building a successful retention strategy, here are 10 practical tips.
1. Provide an engaging and excellent onboarding process
Onboarding is often confused with training, but it is actually more than training. It teaches new employees about corporate values, company goals, and expectations. A successful onboarding process should involve managers, team leaders, and peers.
Google is known for its excellent onboarding process. Softstart identifies five main elements of Google's onboarding process, which are:
- Clearly defining roles and responsibilities from day one
- Matching new hires with peers
- Helping employees build social networks within the workspace
- Setting up regular check-ins during a new hire's first year
- Establishing an open-door policy
If done correctly, a good onboarding system can help new employees feel valued and invested in the company's success, so it is important to design one that works effectively.
2. Offer mentoring programs/opportunities
Mentoring is an effective way to improve organizational culture, individual development, employee engagement, and retention. While informal mentoring can work, having a structured program with clear goals and metrics is important.
For instance, Randstad, a Dutch multinational HR firm, implemented mentoring programs for various purposes, such as leadership development and onboarding for new employees. This led to a decrease in turnover (49% less likely to leave) and increased revenue (saving $3K per employee yearly.
3. Allow employees to speak their minds
Effective communication in the workplace is the key to building trust and community. Yet, some employees are deprived of the essential tool and hence find it difficult to share their work-related concerns due to poor management or work culture.
Positive work cultures encourage employees to speak their minds about work matters without the fear of losing their jobs. Consider adopting an open-door policy that enables employees to express their feelings. This can improve workplace satisfaction.
For instance, IBM has a successful open-door policy, where employees can converse with senior management and send reports by phone, email, or snail mail.
4. Show appreciation and respect
Respect is important for a productive workplace. Fair treatment of all employees, regardless of position or skill level, is necessary. Regularly recognizing everyone's contributions can motivate them to do more. This can be done through awards, a Hall of Fame, or verbal commendations.
Airbnb is a company that values employee appreciation. They have created a workplace culture that makes employees feel valued using positive feedback. Additionally, workers receive cash bonuses and special vacation perks based on their performance.
5. Encourage input and feedback
Building an inclusive work environment means listening to everyone, regardless of race, skin color, or employee status. A strong feedback culture opens you to a broader range of ideas and perspectives, leading to better decision-making.
Cargill, a US-based food producer and distributor, recorded massive employee engagement levels immediately after implementing an “Everyday Performance Management” system. Before this, it had issues with motivating employees. Its new policy embraced encouragement, feedback, and motivation in the workplace.
6. Offer the ability to grow (not just in salary bracket)
Nowadays, workers want more than pay raises and the satisfaction of employment. They want to climb the corporate ladder, which requires management support. They're more likely to remain on the job when they see such opportunities. That's why many companies should launch mentoring programs that foster career development.
An employee of SentinelOne said this to say about their company’s efforts in career advancement:
“The team has been supportive of me and my growth. They are optimistic, offer feedback and advice, and give space for my contributions. I enjoy the potential to grow from this role into another more advanced role,”.
7. Flexible work arrangements
Flexible work arrangements are still preferred by many employees, even as pandemic-induced lockdown measures have phased out. Having such arrangements in place allows workers to find:
- A healthy work-life balance,
- Reduce the need to commute to the office frequently, and
- Increase productivity.
Also, a great way to keep talent in your organization. Despite being home to over 50 000 employees worldwide, American Express, a popular credit card company, now has openings for contract, part-time, full-time, and remote work opportunities. This gives lots of flexibility to their workers, and job seekers who desire these work styles can freely apply.
8. Offer professional development opportunities
Another effective retention strategy is providing employees with the resources to grow. This makes them acquire new skills and experience, which will be useful when they apply for a promotion or raise.
Dolby received an Honorable Mention in The Muse 2022 VIBE awards for professional development. Its learning program includes “a blend of in-person and virtual classroom development experiences, self-paced learning resources, and individual coaching, as well as resources to enable managers to build high-performing teams.”
9. Keep communication lines open
Although we've touched on the importance of letting employees air their views, ensure they can reach their supervisors whenever an issue arises. That means your open-door policy shouldn't be a one-off initiative. Also, simplify the internal communications process so employees are aware of important information in a timely manner.
Stagecoach implemented Blink as part of its efforts to reach 30,000 workers with minimal effort. This yielded lots of positive reviews. Stagecoach recorded a “32% increase in employee satisfaction and a 26% reduction in staff turnover.”
10. Reduce employee burnout
Staying productive can be difficult when workers feel overwhelmed by tasks and the pressure to always deliver high-quality work. If unchecked, this can negatively impact business growth and continues for many years. As such, reducing the burnout rate in the office and for remote workers is important.
According to Zippia, 89% of workers have experienced burnout within the year. The situation gets complicated when a company doesn't have a burnout management program.
Interestingly, some companies care about their employees' burnout and are actively helping them to manage it. For instance, an investment firm, Blackrock, uses pulse surveys to identify its employees' stressors. This has helped the company achieve the following:
- Remote management skill-building for managers
- Enhanced health and well-being support for employees
- Increased work flexibility
Bottom line
As mentioned, employee retention strategies offer companies and individuals numerous benefits, such as helping companies lower costs, build a robust corporate culture, and a stronger and happier workforce.
However, while these strategies are practical and actionable and will help HR/ People Ops retain valuable employees, it's important to mention that they are not a quick fix to retention.
