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12 Strategies to Boost Employee Retention Metrics

9 min read

Nearly half of all workers may leave their jobs post-pandemic. How can businesses improve employee retention and hold on to talented employees?

Reducing turnover has long been a top priority for all HR departments. Between recruiting and onboarding, replacing an employee can cost 50-60% of the employee’s yearly salary— not to mention all the lost expertise of the employee.

That’s why employee retention is one of the key performance indicators for HR departments. By thoroughly investigating the retention rate and making important adjustments, HR departments can make a big difference to the business’s bottom line.

This post, as part of our series on key HR metrics, will cover exactly what employee retention is, why it’s an important metric for HR managers to stay on top of, and some simple strategies for keeping employees engaged. We’ll help you design an employee retention plan.


What is the Employee Retention Definition?

Employee retention is a strategic tool organizations use to retain their valuable employees. Elements of this strategy can involve fostering a positive working environment, providing professional support, and offering employee benefits. The goal is to make the company an attractive place to work., thus making employees less likely to leave.

Of course, a company will never hit 100% retention (and neither should they hope to since some turnover can be beneficial). However, excessive turnover is problematic and can have short- and long-term consequences for a business. As such, it’s in the company’s interest to keep talented employees on board. The consequences of not doing so include high recruiting and training costs, skills shortages, and depleted workplace morale.

How to Calculate the Retention Rate of Employees

An organization can achieve great things when there’s a stable team of talented employees driving the business forward. But it won’t be possible to develop such a team if employees are continually leaving the company.

As such, HR teams shouldn’t just keep an eye on the retention rate. They should treat it as an important HR metric, perhaps the most critical metric. A good rate indicates that the company is on the right path. If it’s not, then improvements across the board may be necessary.

Learning the company’s retention rate is the first step. There’s a simple formula for calculating the rate.

Begin with the number of current employees. Then divide that number by the number of employees at the beginning of the measurement period. Then multiply that number by 100.

It will look something like this:

There are 140 active employees.
There were 150 employees six months ago.
140 / 150 = 0.93
0.93 x 100 = 93.
The retention rate is 93%.
In general, a retention rate of 90% or greater is considered good.

How to Implement an Employee Retention Plan

It’s normal to lose some employees. After all, people leave their posts all the time for reasons that have nothing to do with the employer. However, it’s important that the company isn’t nudging employees towards the exit for reasons within the company’s control.

An effective way to do this is to create an employee retention plan. This is a tool that organizations use as the basis for their talent retention strategy.

Below, we’ll run through the three steps HR teams can take to create a plan.

Step One: Is It An Issue?

Before you can solve a problem, you need to know the extent of the issue. You can do this by asking three questions:

  • How many are leaving?
  • Who is leaving?
  • Why are they leaving?

A high turnover rate is always problematic. But even a low turnover rate can be troublesome if high-value employees are leaving. So don’t just look at how many members of staff are finding employment elsewhere. Look at who’s leaving. Employees with valuable, in-demand skills will be more difficult to replace than entry-level employees.

You may also notice voluntary termination trends. For example, female employees may be more likely to leave than male employees. In that instance, you may have a working environment that prioritizes male workers over female workers.

Step Two: How to Proceed

If you determine that employee turnover isn’t an issue, then you can proceed as usual. If it is an issue, then it’s time to take action.

An employee retention plan can incorporate two differing approaches. One is a broad-based strategy. This is non-specific to the business and includes general improvements. For example, increasing salaries, providing more benefits, or offering flexible working conditions.

The other is targeted strategies. This is the process of gaining information about why people are leaving the organization. Exit interviews are particularly effective for acquiring this information since they provide immediate feedback from departed employees. However, while useful, it’s important to remember some employees may not tell the whole truth about their reasons for leaving.

You’ll find a more thorough explanation of employee retention strategies later in the article.
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Step Three: Did It Work?

You’ll need to analyze the effects of your retention initiatives to determine their effectiveness. It’s important to look at their results on an ongoing basis. Employees tend to stick around when it feels like the company is making changes. As such, it’s important not to put too much weight on the short-term effects of the employee retention plan. The true worth of the plan will be felt six-months to a year after implementation.

Start With an Employee Retention Survey

Companies don’t have to wait for employees to leave before uncovering reasons for their departure. An employee retention survey can help highlight potential problems before staff leave. You might think your employees are happy working for the company, but you won’t know for sure unless you get their opinion! An employee retention survey can help HR teams to identify organizational factors that may be impacting the retention rate.

The survey can touch on all aspects of the employee’s professional life, including job satisfaction, relationship with supervisors, and their future with the company. The employee retention survey results can help HR teams understand issues that may result in voluntary or involuntary termination.

12 of the Best Employee Retention Strategies

HR teams can employ a number of strategies to minimize employee turnover. Ultimately, the goal of these strategies is to create an overall positive working experience for the staff. While the organization’s objectives remain the priority, HR teams should create these methods with the employee’s happiness and engagement in mind.

The results of the employee retention survey will help to guide strategy. But there are also some general approaches that all companies can utilize. Below, we’ll run through some of the most effective strategies to incorporate into your employee retention plan.

Start Off by Hiring Well

An employee will be more likely — even probable — to leave if they weren’t the right fit for the company in the first place. During the hiring process, it’s essential to look beyond a candidate’s professional capabilities and background. Are they the right cultural fit for your business?

Their work background will also highlight their approach to their career. If the candidate has had six jobs in the past three years, then that’s a sign they may not stick around at your company for the long-term.

Honesty and transparency with candidates are also important. They should know what’s expected of them before they accept the job. A person will be more likely to leave if the job is different from what was sold to them during the application process.

Quickly Get New Hires Up-to-Speed with Employee Onboarding

You may be happy with your recruit. But is the recruit happy with your company? Just because they accept the job, that doesn’t mean they’ll necessarily commit long-term. If they get off to a bad start at the company, then they’ll naturally have doubts. The onboarding process isn’t just another item to tick off the employee checklist. It’s arguably as important as the hiring process. An employee that feels welcomed and supported will be set up for a great future with the company.

A recruit should stick around at least long enough for the company to see a return on their investment. Studies have shown that new employees that socialize with other employees are more likely to stay than those that don’t.

Offer Positive Feedback to Encourage Employees

Negative feedback takes a toll on an employee (or anyone, for that matter). Of course, there’ll be times when negative feedback is unavoidable. But if there’s too much negative feedback (or rather, little positive feedback), then an employee’s motivation and happiness will nosedive. So look at the language that supervisors are using. The ideal ratio is six positive comments for every negative comment.

Create a Positive Work Culture That Employees Enjoy Being In

Employees look beyond their professional duties for their career satisfaction. The environment in which they’re working is also important. If it’s positive, nurturing, respectful, and friendly, they’ll be less likely to cast their eye towards other professional opportunities.

Organizations with a toxic workplace culture experience a much higher employee turnover rate, among many other problems.

To improve your company culture, try the following:

  • Conduct a company culture audit.
  • Celebrate worker achievements.
  • Identify and eliminate toxic practices.
  • Foster a team mentality.


Offer Ongoing Training and Professional Development

Employees want to feel that they’re working towards their goals. If they believe they’ve hit a dead-end with a company, they’ll look for a company that can take them where they want to go. If you want your staff to invest in your business, you should first invest in your staff.

Providing ongoing training and a pathway to reach their professional goals is key. The training should expand their skill set (rather than just making them better at what they already do). Offering advancement opportunities offer something to work towards.

Putting together a professional development plan for each employee will put them on the right path.

Provide Competitive Compensation

Perks, culture, and professional satisfaction are all important. But money matters. According to a Glassdoor study, salary is the number one reason why employees look for other jobs. Of course, it’s in a company’s interest to keep salary expenses manageable. However, if wages are not competitive, then the best employees will naturally look elsewhere. They know their worth.

A good starting salary helps with the recruitment process. Performing six-month or annual salary reviews keeps employees on board. If a worker is performing well, they should receive a raise.

Keep Staff Happy with Employee Benefits

However, salary is not the only factor that employees value. According to an SHRM study, 92% of employees gain job satisfaction through the benefits the company provides. And that makes services too important to ignore.

Benefits can come in small and large packages. Even small perks, such as free coffee and snacks in the workplace, can boost morale. On a larger scale, providing ample vacation time, floating holidays, and maternity leave can help retain employees.

Invest in Employee Health with Wellness Programs

Employees are not machines. If they’re overworked, then burnout becomes more likely. And when that happens, they may have to leave the company to get back on track. Even if they do stay, productivity and quality of work will take a hit. It’s a lose-lose situation for employers.

Companies can mitigate employee stress by incorporating wellness initiatives into their operations. These initiatives can take many forms. So long as they make the employee’s life easier and contribute to improving mental/physical health, they’re in!

Common examples include:

  • Providing healthy meals onsite.
  • Offering free/subsidized access to mental health services.
  • Creating a “relax room” at the office.
  • Organizing fitness activities.

Create a Flexible Working Environment

An employee will be less likely to leave if they’re getting what they want from their employers. And more and more, what employees want are flexible working conditions.

Working from home was an out-and-out success during the coronavirus pandemic. It won’t disappear once the pandemic is over. To avoid losing their best employees, companies that can offer flexible working as standard should do so.

A hybrid workplace can work for companies that can’t have a fully remote workforce. Under this model, employees split their time between the office and home (i.e., three days in the office, two at home). As well as where employees work, think of when. Expanding the hours in which employees can work is a level of flexibility that staff appreciates (for example, eight hours between 6 am and 8 pm).

Keep Employees Informed

Imagination can run wild in the absence of communication. A worker with doubts regarding the stability of their job will be more likely to seek new employment. If the company is going through changes, HR should communicate how those changes will affect the employees.

It’s also important to introduce changes gradually, if possible. A sudden, profound shift can be disorientating to employees, even if the changes will have a positive long-term impact.
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Invest in Leaders

Employees are more likely to leave if they have problems with management. A company with leaders, rather than bosses, will be more likely to have a committed workforce. Of course, few people are born leaders. But it’s a skill that you can nurture.

Strong leaders communicate well, assume responsibility, and inspire staff to reach their full professional potential.

Pay attention to managers with a higher-than-usual turnover rate. Depending on the issue, training may help. But in some cases, removing the supervisor from their position will be necessary if they’re forcing staff to leave. HR teams can use software to run reports on different departments’ retention rates to highlight if this is an issue.

Make Employees Proud To Work For You

Employees are increasingly asking for more than salary and professional satisfaction from their jobs. In an age when activism is more important than ever before, they want to feel that their employers are on the right side of progress. Workers, especially millennial workers, will be less engaged with their work if they have doubts about the broader implications of the company.

So make sure your company is a positive force for change. Working with local charities, creating a diverse and inclusive workplace, and all-around minimizing the negative consequences of your operations will make your employees proud to work for you.


Employees are the backbone of any organization, and it’s in the companies best interests to keep them on board. One employee leaving is not an issue. Many high-value employees can be a disaster. By prioritizing employee retention, HR teams can reduce costs, keep their best talent, and enhance the culture and profitability of the business.

Want to know more about Key HR Metrics? Read about our top 10 HR KPIs.

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