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Nearly 30% of US workers quit their jobs in 2023, costing employers nearly $900 billion to replace them.
While this is down from the 50 million workers who voluntarily quit their jobs in 2022, it’s an increase of more than 30% in the quit rate from ten years ago.
Despite these figures, the US unemployment rate is around 4%, which is considered fairly good. However, these rates have steadily increased since 2022. As a result, many employers can benefit from a refocused effort towards employee retention.
Companies need robust employee retention strategies to grow and remain competitive. These 10 strategies will show you the way for 2024 and beyond.
What is an employee retention program?
An employee retention program is a specific strategy implemented to retain top talent. It aims to mitigate turnover risks, a leading challenge for HR teams worldwide.
Employee retention strategies recognize that each employee is an investment of time and money. When companies hire and train employees, they dig into their profit margin. Having to re-hire those employees leads to deeper cuts.
For example, the 2024 Work Institute Retention Report shows that most employees (17.4%) leave due to career opportunities. One strategy to combat this might include more skill training for current employees, giving them greater opportunities for promotions.
The Work Institute’s yearly results show that career opportunities are the number one reason people leave their jobs. Understanding this, as well as other problems, is crucial when developing effective employee retention strategies.
Here are a few more retention program examples that address employee issues:
- Two days of remote work for employees concerned with their work-life balance.
- An improved complaint process to address employee issues regarding management
- Improved benefits or perks for employees concerned about their health and families
Why you need a retention program
According to Work Institute’s 2024 Retention Report, if every unemployed person in the US found a job, there would still be over 3 million available jobs. In other words, employees have more options than ever. So, employers must go beyond the bare minimum if they want to retain employees.
Here are the top five reasons employees seek alternative employment:
- Career: 17.4%
- Health and Family: 12.3%
- Work-Life Balance: 11.9%
- Job Conditions: 9.8%
- Manager Situations: 9.8%
Other factors, including relocation, rewards, and environment, are also among the top ten. These are important challenges businesses face when it comes to employee retention.
Employee turnover affects revenue as well. In fact, high turnover can lead to a host of problems, including:
- Increased recruitment costs — You’ll waste time and money on job advertising, writing job descriptions, interviewing, and training.
- Loss of organizational knowledge — You’ll lose top talent, valuable knowledge, and experience from the organization.
- Productivity drain — You’ll have to invest more time into training new hires to boost performance. Lost productivity costs organizations $1.8 trillion each year.
- Poor company culture — By implying lower employee satisfaction, high turnover can convince others that it's not a good place to work.
Why your employee turnover rates may be high
High turnover rates (also known as churn rates) are a potential sign that current employees are dissatisfied with a company. Low engagement and low morale may come from both internal and external factors. For instance, you can work on your company culture (internal factor), but there’s not much you can do about inflation (external factor).
Regardless, identifying these causes may help you address them. By taking action to mitigate both internal and external factors, you’ll increase your odds of retention.
Internal factors affecting churn
- Unfair compensation — Employees who feel underpaid for their work look for better prospects in other organizations.
- Burnout — What started as a meaningful job may feel overwhelming later. They may be asked to take on too much or asked to do tasks they’re not trained to do.
- Career opportunities — Your employees may feel there aren’t enough internal opportunities for them. This can include skill training, promotions, mentorship, or flexible work arrangements.
- Boredom — The job may have started as an exciting opportunity but feels less inspiring day by day. A lack of engagement can also diminish an employee's passion and enthusiasm — and it costs companies $550 billion annually.
- Conflict with coworkers — When employees don’t have mutual respect with managers or peers, it can adversely affect their productivity and make them leave.
External factors affecting churn
- Career change — Employees may feel that their jobs no longer align with their career goals or may want a career change.
- Economic trends — Recessions can cause revenues, income, and GDP to decline, resulting in lower pay, frozen bonuses, etc. Inflation makes salaries worth less.
- Personal obligations — Family illness, a partner getting a job transfer, caregiving, or other personal life challenges may cause an employee to quit.
- Poor culture fit — An employee may feel that they do not sync with the company's mission statement, goals, and culture. They may stand at odds with the managers, trying to fit in an environment they cannot adjust to.
10 strategies to retain your top employees
With signs that the job market is cooling, there are still more jobs than workers. The good news is that you have a workforce that is looking for stability and may be looking for a reason to stay. More than a third of unemployed workers have been out of work for more than 3.5 months.
So what can you do? We’ve compiled a list of 10 strategies that will help you retain more of your team — in 2024 and beyond.
1. Pay competitive rates
Let’s start with the obvious. If you want to keep your best employees, you have to offer competitive compensation.
It will come as no surprise that pay remains a top factor in employee churn, and other employers are more than happy to scoop up your top talent. Those who are willing to pay for top talent attract those people.
Of course, inflation is a big reason salaries are a top concern. The cost of living (identified through the Consumer Price Index) has gone up over the last year, so if your company hasn’t given a cost of living increase, your employees are making less now than they were before.
If you’re not able to affect salaries directly, there are still things you can do, though.
Start including salary ranges in job descriptions. While this strategy may sound like more of a recruitment tool than a retention strategy, pay transparency shows existing employees that you’re paying them fairly.
Plus salary disclosure is just good practice. Eight states already require employers to share salary ranges for job openings, with 15 more considering similar laws.
Already posting salaries in your job postings? Take a look at the range. It should be an accurate reflection of your budget for that specific role. If it’s too large it might be time for a to take a look at pay equity in your company.
2. Create career advancement opportunities
Nearly every jobs-based report for 2024 agreed on one thing: workers will leave their jobs for better opportunities. It doesn’t matter if advancement comes in the form of a higher salary, a promotion, or a more appealing work-life balance, employees are craving it.
When employees see opportunities to grow internally, they are less likely to look externally. LinkedIn’s 2024 Workplace Learning Report revealed that 87% of employees showed business value by gaining skills to move into different roles. By focusing on learning and development activities, employers help employees gain skills for the jobs they do now and the work they will want to do in the future. This data coincides with the Work Institute’s findings, which tell us that the lack of career development opportunities is why many leave their jobs. In other words, if you want to attract top talent, you must be willing to invest in them. Challenged employees feel rewarded for the work that they do.
Despite this, LinkedIn’s 2024 Workplace Learning Report tells us that only 33% of organizations have internal mobility programs, and only 1 in 5 employees have strong confidence in their ability to move between roles. This falls far short of a top performer’s expectations of their workplace.
To address these issues, companies can increase job satisfaction by challenging employees through learning opportunities and upward mobility. This can include anything from mentorship events to one-on-one shadowings. For example, employers could implement a job shadowing program to test employees and find out more about the skills they need to do the job properly. With this strategic focus, employers will see enhanced engagement, a robust internal pipeline, and a sustainable group of skilled employees in leadership roles.
We recommend a mentoring program with Together. Contact us for a demo.
3. Create a people-first workplace
In a people-first company, an organization prioritizes the people that support the business, its growth, and its revenue. It’s important to note that the umbrella term “people” refers not just to employees, but also customers and the community at large.
This strategy requires a shift in company perspective. Instead of asking, "How do we succeed?" a people-first company asks, "How can our people benefit more?" In this way, some retention goal examples could include more wellness programs for employees, more general skills training, and clear opportunities for advancement.
And there’s evidence to show that now is the prime time to implement this change. Executives around the world want to focus on people. 82% of leaders told LinkedIn that HR strategies are crucial for success.
You can inspire your C-suite with one or two simple programs. First, look to the employees that impact the most people: managers.
Quantum Workplace has a great video on how to empower your managers to be better leaders. Tips include creating an open dialogue with team members and recognizing employees in meaningful ways. Your retention plan should start with your managers, as those are employees who have proven themselves worthy of their experience level.
4. Make meaningful connections at work
Part of a people-first culture is the quality of relationships between those people. But you have to go beyond happy hours and birthday parties. For true success, cross-functional collaboration (aka teamwork) must be baked into your company culture. And that requires a solid foundation.
In fact, one study concluded that quality relationships are a cornerstone of successful collaboration. The stronger those connections are, the more likely those team members are to share their knowledge. It’s like an infinite loop of collaboration.
Executives and HR departments can play an active role by fostering healthier connections between workers and team members.
Consider adding collaborative activities like peer learning to your L&D program or working project sprints into your major projects. It will go a long way toward employee engagement and retention.
5. Recognize and appreciate hard work
In a recent Gallup workplace survey, the most memorable recognition comes from the manager (28%), CEO (24%), and the manager’s manager (12%). Gallup’s survey takes this a step further, encouraging employers to create a recognition-heavy environment, boosting morale through recognition at least once a week.
When organizations fail to acknowledge the vital contributions of employees, they cause them to get discouraged, which can be the precursor to quitting. Managers can increase the commitment and dedication of employees with timely recognition and appreciation of their hard work.
This recognition does not refer to monetary compensation. In fact, companies can find and should find non-monetary forms of employee recognition. Everything from simple shout-outs to stretch assignments can motivate employees and keep them from jumping ship to the competition.
Employee spotlights are one specific way that managers can recognize employees. You can include them in a company newsletter, announce at an all-hands meeting, or post on the employee intranet or social media. By publicly acknowledging the great work of team members, those employees feel valued, motivated, and more devoted to the organization’s success.
6. Set up mentorship and training programs
Mentorship is an effective way to train new employees while also making tenured ones feel empowered to share their knowledge and skills with someone new.
Jennifer Petrela, a mentoring expert at Mentorship Quebec says more companies are using mentorship as a recruiting tactic because younger workers are aware of the power of mentorship programs.
A mentoring program is essential for new workers who want a leg up in their career. Formalizing your mentorship program will take the strain off your employees who chose to become mentors by giving them a framework and guidance for guiding their mentee.
For tenured employees looking to advance, consider upskilling programs, refresher training or executive sponsorships.
To encourage these mentorship programs, foster collaboration with HR managers, leadership, and those at the executive level. Through a more collaborative approach, HR managers can demonstrate how mentorship and upskilling programs can contribute to the company’s strategic goals. HR managers should engage in open conversations, support their insights with data, and establish regular updates and feedback loops to encourage communication through and increase success in these programs.
In addition, direct manager and supervisor training is part of any good mentorship program. Focusing on improved communication skills, conflict development, and leadership skills are three examples of where managers can provide guidance. You can even include mentorship events to set aside specific times for this kind of collaboration. In mentorship, it’s not just about getting executive buy-in and establishing programs; it’s about creating an environment that encourages mentorship whenever possible.
7. Encourage a healthy work-life balance
Overworked employees fail to be productive at a point. When their bodies and minds have worn out, they can fall prey to stress and subsequent sicknesses. They may quit because the work has become over-demanding, and they find no time for their personal lives.
Nearly half of Gen Zs and Millennials say they’re burned out due to pressures at work, according to a report from Deloitte. Even worse, about half of Gen Zs and Millennials say that their employer doesn’t care about their mental health. Some (about 25%) believe that employers will discriminate against them for having mental health issues, which work pressures can exacerbate. A healthy work-life balance is vital for good mental health.
Benefits like flexible work schedules, wellness stipends, and high potential leadership programs can go a long way in keeping your employees productive and feeling balanced. In fact, SHRM found in a survey that the number one reason people sought flexible work was to achieve work-life balance.
Learn more: 10 ways leaders can promote workplace wellbeing.
8. Offer flexible work arrangements
Most companies looking to offer flexibility to their employees opt for hybrid workplaces, and Deloitte’s research shows that a good chunk of workers agree. But flexible work doesn’t always apply to the location where you’re working.
According to a June 2022 Gallup survey, half of US workers want some form of flexibility in their workplace. This applies even in cases where remote work isn’t an option. So if you can’t offer remote work, consider employee retention tools like flexible working hours, coworking spaces (and quiet spaces), or shortened work weeks.
9. Provide personalized employee support
Employees want career development and personalized support. A few of the strategies we’ve already covered prove this. Managerial and HR teams can do more to ensure that everyone feels appreciated, and supported in the company. At the same time, company heads must refrain from being too hard on workers who lag in performance. Yes, productivity matters, but not at the cost of employee morale. A lack of that will just hurt productivity more and increase turnover in the long run.
Individualized counselling sessions can ensure every employee feels uplifted. This can be part of your mentoring program or regular 1:1 meetings. The point is to give employees an opportunity to offer feedback and receive guidance on their work performance, career path, and overall goals.
10. Learn from the past
Many companies have adopted exit interviews to understand why employees resign. This helps them uncover the roots of any turnover issues, and more importantly, cut off high turnover before it starts.
Exit interviews offer your team loads of data that can help you find the leading causes for resignation, but only if you do something with it. Ideally, you’re using that information to improve the company's workflow, benefits, compensation structure, and work-life balance.
You might choose to compile a quarterly or annual report that highlights any insights or trends. As with payscales, transparency is key. So while you write the report to present to your higher-ups, it’s a great idea to publish it internally as well. This will go a long way in making employees feel heard.
But the biggest reason is these insights will help you craft more effective retention strategies in the future.
Invest in a mentoring program to keep employees engaged
No matter how you slice it, turnover is a drain on company resources. A mentoring program pays dividends faster and longer than any of the other strategies we’ve listed here. Why? Because they help to solve all the top reasons for high churn and help you retain your top talent.
Mentorships not only give your employees the guidance they need to succeed, they also have a positive impact on salaries, promotions, employee engagement, and company culture.
Mentorship and sponsorship programs also give your managers and senior team members a reason to stay. Serving as an advisor to a junior employee grows leadership skills and creates a culture of shared learning.
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