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14 Employee Retention Strategies for Your Company in 2023
As economists debate whether the U.S. is entering a recession, there’s little doubt the world faces a good amount of economic uncertainty in 2023. Still, the American labor market remains highly competitive.
In October 2022, 4 million Americans quit their jobs, leaving 10.3 million jobs open. And with an unemployment rate of just 3.7% and only 6 million Americans currently looking for work, companies are still struggling to retain employees and attract new talent.
In this unique market reality, companies cannot afford to gamble with their most valuable asset—their talent. Investing time and resources in proven employee retention strategies can help organizations ensure they enter 2023 strong.
Why Employee Retention Is Important
The impacts of employee turnover go far beyond temporary disruptions. For one, it’s costly. Replacing an employee costs anywhere from one-third to double their annual salary, according to the Work Institute. And the Houston Chronicle reports that, in addition to those costs, high turnover also impacts the staff that remains—and the business’s customers.
As employees watch their colleagues leave, their workloads often increase. This can lead to a downward spiral of departures and stress. Frustrated, overworked employees are less likely to perform at their peak, meaning the company’s product or service suffers, and customers have more negative interactions with the company. The ramifications are difficult to fully quantify.
Effective Employee Retention Strategies
So how can companies keep employees happy and prevent them from looking for new opportunities elsewhere? These 14 employee retention strategies at your company will put you on the right path.
1. Invest In Employees’ Careers
According to LinkedIn, 94% of employees say they would stay with their company longer if it invested in their career development. In today’s economy, employees understand that they need to keep their skills sharp to remain competitive and move up the ladder.
Organizations can tap into their employees’ desire for development by providing structures like mentorship programs and investing in additional education for their employees. Online professional education courses like those Emeritus offers help organizations reskill and upskill their employees, growing their talent base while increasing employee satisfaction.
2. Focus on Managers
Have you ever heard the old line “people don’t quit jobs, they quit bosses”? Well, sometimes it’s true. A 2022 survey by Goodhire found that 82% of Americans would potentially quit their job because of a poor manager. Fortunately, leadership skills can be trained. Companies should ensure performance reviews take management skills into account and offer training and mentorship to managers at all levels, especially if they are first-time supervisors.
3. Recognize Employees’ Contributions
Everyone likes to feel valued, and that’s especially true in the workplace. A 2022 Gallup/Workhuman survey found that when employees feel recognized for their work, they are 56% less likely to look for new opportunities. Even so, only 19% of employees feel that their organization has a strong culture of recognition.
Companies should encourage managers to recognize their direct reports’ work. They can also go further to offer division- or company-wide recognition of staff who go the extra mile. During the pandemic, when many employees have been forced to manage difficult circumstances amid ever-changing conditions, that recognition is especially important.
4. Reassess Compensation
In today’s competitive marketplace, compensation is an essential piece of any company’s retention strategy. No matter how valued an employee may feel, they are likely to look outside their current company if they feel inadequately compensated for their work. Companies that provide transparency around their pay and a clear, simple pay policy are more likely to win over employees, according to Monster.
Regular reassessment of industry compensation standards is important, as is a strategy to financially reward top performers. Spot bonuses and regular wage increases can go a long way toward making an employee feel valued.
5. Consider Your Benefits Package
Similarly, benefits are a major factor, with Forbes reporting that for nearly 6 in 10 employees, a company’s benefits package is the most important non-salary factor they consider when assessing a job. Benefits like lower employee healthcare premiums or increased parental leave can mean the difference between staying in a role or looking for a new one.
Even before COVID-19, flexible workplaces were a major driver of retention. Companies can expect that their willingness to accommodate employees’ needs and preferences will remain a major factor in employee loyalty.
6. Prioritize Work-Life Balance
Work-life balance isn’t just a buzzword. While remote work and flexible scheduling policies are important factors in creating work-life balance, they are of little use if employees simply have more work to do than they can reasonably achieve, or if the company culture expects them to check their email well after business hours.
Managers should regularly check in with employees to ensure they don’t have more on their plates than they can handle and to encourage open lines of communication about workloads. Moreover, organizations can reduce the crunch by cutting back on unnecessary meetings and administrative duties that drain time without adding significant value. Ultimately, companies should weigh the cost of adding staff against the cost of increased turnover if workloads become unsustainable.
7. Create Pathways for Growth
The world of work is changing fast, and employees know they need to keep moving or risk falling behind. Yet many worry that they lack opportunities for promotion and upward mobility within their current companies. As a result, they look outside the organization for their next step. According to McKinsey & Company, lack of opportunities for career development and advancement was the top reason employees left jobs between April 2021 and April 2022.
“The world of work is changing fast, and employees know they need to keep moving or risk falling behind.”
Dedicated career pathing can help increase employee engagement and reassure employees that their future with the organization is bright. Career pathing is a process through which employees and their managers work together to identify goals and create a learning and growth action plan to achieve them.
8. Improve Organizational Culture
While organizational culture may seem subjective, its impacts on retention can’t be denied. In fact, company culture is one of the key drivers of workplace satisfaction. While the building blocks of a strong culture vary somewhat from one workplace to the next, strong corporate cultures share key traits such as:
- having and carrying out clearly articulated values
- valuing and seeking out employees’ voices
- having strong commitments to diversity, equity, and inclusion
- executing supportive leadership
9. Prioritize Hybrid and Remote Options
In the “new normal,” remote and hybrid working is increasingly seen as the norm. In fact, a 2022 ADP survey found that 64% of Americans would consider looking for a new job if required to return to the office full-time.
While some roles truly cannot be performed remotely, employers should work to create remote and hybrid options whenever possible. Options like requiring core “in-office days” or recurring in-office meetings can provide the collaborative benefits of a shared workplace without requiring an overly rigid approach.
10. Focus on Flexibility
In addition to remote options, employees increasingly prioritize flexibility in their schedules as one of their employee retention strategies. Employees who can flex their hours to accommodate family caregiving, medical needs, or even a simple run to the bank in the middle of the day are likely to feel more in control of their workday and more able to attend to their needs. This is true even if the total number of hours worked remains the same.
Options like a compressed workweek or allowing employees to get their work done on their own schedule (outside of necessary collaboration) can drastically increase satisfaction without impacting output.
11. Give Employees the Tools for Success
Dealing with IT issues or an uncomfortable workspace is never good for morale. And for employees already feeling overwhelmed with work, taking time out to deal with a computer that won’t work or dated software can be a major cause of frustration. Employers should work with employees to ensure they have the equipment and productivity tools they need to be as productive as possible. It’s especially important to ensure that remote employees also have the tools they need to work effectively.
12. Support Employee Wellbeing
Between a rising cost of living, complex personal lives, and political and economic uncertainties, it’s no wonder that nearly half of employees report feeling burned out, with little improvement since the peak of the pandemic. While ensuring employees have appropriate workloads, clear lines of communication with management, and a positive corporate culture are the most important tools for fighting burnout, employers can also consider taking additional measures to support their employees’ physical and mental health.
Perks like wellness reimbursements for gym memberships or massages, insurance coverage for therapy and mental health treatment, and even access to digital wellness or meditation platforms can all help employees feel more restored.
13. Focus on Team Building
With less work taking place in person, it’s especially important to intentionally facilitate connections between employees. Their sense of community and belonging at work is a major factor in their satisfaction and loyalty. Plus, effective teams are better at collaborating and communicating.
In many cases, in-person, casual conversation may be a thing of the past. But digital communications tools like Slack that allow channels for different purposes can help foster casual conversations. Additionally, cross-functional projects or assignments can help employees in different parts of the organization get to know one another.
14. Help Employees Find Purpose in their Work
We all want to make a difference to those around us—and many employees expect to do so in their jobs as well as their personal lives. According to McKinsey & Company, employees who feel that their personal purpose aligns with that of their organization are more engaged and more loyal to their employers.
Company leadership can help employees engage with their organization’s purpose by communicating the company’s impact on the world and helping employees connect with it. For example, holding town hall sessions or small group discussions about how to improve customer experience—and acting on employees’ ideas—can help employees feel they are directly impacting the lives of others.
Implementing Employee Retention Strategies
In today’s tight labor market, the importance of employee retention strategies can’t be overstated. Since a few employees leaving the organization can quickly lead to lost morale and unmanageable workloads, it’s essential to be proactive by implementing effective employee retention strategies such as compensation reviews, recognition programs, and opportunities for upskilling and reskilling.
In fact, in the 2022 Emeritus Global Career Impact Survey of more than 3,900 past learners, 89% of respondents said they feel more engaged in the workplace if they are learning new skills. Plus, more than three-fifths said they found new meaning in their career and lives after finishing an Emeritus program.
Employees who feel valued and believe that their companies are invested in their success will be happier, more productive, and more loyal—a win for everyone.
By Rachel Hastings
Interested in leveraging upskilling and reskilling as one of your employee retention strategies? Learn more about partnering with Emeritus Enterprise to develop online employee training programs taught by leading professors and experts in their fields.
This blog post, originally published in October 2021, has been updated for 2023.