Employee Turnover & Retention Policies (2024)

FAQs

What are the three most important factors for employee retention? ›

The difference between turnover and retention

They're almost opposite terms. Employee turnover is the proportion of your workforce who leave during a period of time (usually per year). Retention is the proportion of employees who stay.

The five main drivers of employee retention are strong leadership, frequent feedback, including recognition, opportunities for advancement, competitive compensation packages, and a good work/life balance. For retention strategies to be successful, they should be crafted with these five drivers in mind.

By building an engagement strategy on the four pillars: well-being, company culture, training and development, and recognition, and powering it with modern technology, employers can improve their recruitment and retention rates.

They not only make employees stay in your company, but also boost productivity and promote higher levels of engagement, which ultimately increases revenue. The main goal of any retention strategy is to keep turnover as low as possible. In order to do this, it has to improve the employee experience.

Employee turnover refers to how many employees leave an organization within a timeframe. Some key factors influencing employees to quit their jobs are job satisfaction, communication, colleague relation, organizational commitment, justice, politics, reputation, etc.

Managers affect employee retention by shaping the employee experience and building engagement. An effective manager understands the role they play in impacting employee retention, and they seek opportunities to build strong foundations that satisfy internal drivers, not just external factors.

What is the secret to employee retention? ›

Encourage and support growth

Training, coaching, leading by example, and encouraging achievement always brings positive outcomes and molds happy employees. The majority of people would not want to leave a job where they're encouraged to grow, so be sure to lead with encouragement.

Employees perceive training as the organization's way of preparing them for better opportunities. This encourages job satisfaction, and loyalty to the company. Training should reinforce the value of the employee for it to increase employee retention. Employees also want to learn more through trainings and seminars.

What are the main causes of staff turnover? The four main causes of turnover are lack of growth and progression, inefficient management, inadequate compensation, and poor workplace culture. These reasons for staff leaving are present at many organizations around the world.

One example of an employee retention policy would be a policy that helps employee track their performance, set goals and offer feedback. Some policies focus on employee benefits like healthcare or childcare. Other popular policies include a dress code or anti-discrimination policy.

Retention becomes a problem when an employee quotes an exceptionally high figure beyond the budget of the organization and is just not willing to compromise. The organization needs to take care of the interests of the other employees as well and can't afford to make them angry.

The resource-based employee retention theory (RBV)

Another important employee retention theory is the resource-based theory, which argues that employees who feel most useful to their companies are likely to be most loyal. This theory proposes that by making employees feel valuable, you can reduce retention issues.

Key Employee Retention Plans (KERPS), also referred to as “pay-to-stay” compensation plans, can take many forms but their main purpose is to create a guaranteed pool of money that operates as an incentive for an employer to retain key employees during financially difficult times.

How do you attract and retain employees? ›

Challenges in Employee Retention

Salary Dissatisfaction − Every employee has high salary expectations and this is one of the major reason, why an employee quits the organization. Retention becomes a problem when an employee quotes for an exceptionally high salary, which is beyond the budget of the organization.

Review of literature indicated that transformational leadership and transactional leadership has positive relationship with employee's retention. Transformational leadership and transactional leadership have positive relationship with job satisfaction and organizational commitment.

Turnover is a problem for businesses because it can lead to lost productivity, high recruitment and training costs, and decreased morale among remaining employees. And finally, high turnover rates can reflect negatively on businesses, making it difficult to attract and retain top talent.

Organizations should aim for 10% for an employee turnover rate, but most fall into the range of 12% to 20%. Certain industries report higher employee turnover rates due to the nature of the job.

As a general rule, employee retention rates of 90 percent or higher are considered good and a company should aim for a turnover rate of 10% or less.

The first step to lowering your employee turnover rate is to open a channel of communication with your workers. Encouraging honest feedback from your employees and then implementing changes based on the feedback is an excellent way to demonstrate that you care.

How do you convince managers to retain employees? ›

Respect may be the most important aspect of retaining great employees. Respect for employees lies at the heart of every great company culture. Companies must respect an employee's ideas, beliefs and hopes in all scenarios and situations.

The four main causes of turnover are lack of growth and progression, inefficient management, inadequate compensation, and poor workplace culture. These reasons for staff leaving are present at many organizations around the world.

Turnover is a problem for businesses because it can lead to lost productivity, high recruitment and training costs, and decreased morale among remaining employees. And finally, high turnover rates can reflect negatively on businesses, making it difficult to attract and retain top talent.