Top Strategies for Retaining Talent Today

Perhaps you’ve heard of the “Great Resignation.” In the wake of the COVID-19 pandemic, businesses saw a surge in the number of people choosing to leave their jobs. As recently as June 2023, the US Bureau of Labor Statistics (BLS) data suggested this is slowing down. According to the BLS, the number and rate of quits (typically voluntary) decreased to 3.7 million (a loss of 295,000) and 2.3 percent [1].

Yet employee turnover, at any rate, can challenge businesses, leaving many leaders focused on employee retention. Read on to learn more about the pros and cons of employee turnover and strategies for retaining talent.

What is employee retention?

Employee retention refers to your ability to keep employees satisfied and productive so that they don’t look for work elsewhere.

Decades ago, an employee might receive a job offer immediately after college at a company and stay there for the rest of their working life. Today, top talent expects to move around within their industry, perhaps even shifting their career trajectory entirely. This requires businesses to pay more attention to talent retention initiatives, encouraging employee satisfaction and morale to avoid costly turnover.

Pros and cons of employee turnover

Employee turnover refers to employees moving in and out of the labor market and needing to replace someone when a position opens. Employee turnover can be a good thing, though it is often associated with its costs. This section examines the advantages and disadvantages of employees voluntarily moving on from your organization.

Pros

Employee turnover can actually lead to a boost in company-wide performance. It can enable a company to replace its low performers with stronger talent. Plus, turnover opens the door to new hires who can offer greater diversity, fresh insights, and expertise.

Cons

Employee turnover costs your organization in several ways. Looking just at the financial implications, you could need to plan for:

• Final paychecks, accrued vacation, separation pay 

• Increased unemployment tax

• Continued benefits

• Administrative costs of processing the separation

• Advertising and recruiting fees

• Interview expenses

• Medical exams and prescription costs

• Temporary and contract employee costs

• Overtime

• Relocation expenses and salary

Losing and replacing an employee also draws on other employees’ time. Payroll and IT departments need to work with the employee for exit interviews and technology recovery. Managers may need to establish transition plans. Colleagues could need to fill in for the leaving employee. Then, to bring in someone new, someone needs to write a job description, recruit new people, interview candidates, and work to screen, orient, and train the new employee. This can all negatively impact employee productivity in other areas.

Meanwhile, the institutional knowledge that the employee has of the company and how to do their job can be lost in the turnover, too.

Countering employee turnover by retaining talent

Preventing excessive turnover can help business profits and reduce resource waste. So, what can you do to hold onto your employees longer? These top strategies for retaining employees can help maintain productivity and support enhanced employee engagement.

1. Hire well

Attracting quality candidates who can do the job well starts you on the right path to retaining your top people. You can attract a wider talent pool by making your company appealing and effectively marketing your business brand. This can help you find people who will make a difference for your business, which can help them feel more invested and engaged.

You can lay the groundwork in interviews by setting realistic expectations. Offering a preview of the role and responsibilities can help candidates make informed decisions about which jobs to accept.

2. Make your company a place where people want to work.

Providing people with a desirable place to work supports employee retention. When people feel valued and respected while enjoying great job conditions, solid benefits, and compensation, they are likelier to stay put. 

More employees today also look for a value match. They want to feel their work is both challenging and meaningful. When people find their work fulfilling, their motivation and loyalty increase.

3. Onboard effectively

Make sure your people know what you expect of them. Give them the tools to do the job well. Introduce them to colleagues and people who can answer any questions they might have. The onboarding period also allows you to communicate company culture and clarify roles and responsibilities. Spending the time upfront to position your people for success helps counter employee frustrations and issues that can lead to turnover.

4. Provide opportunities for training and development.

Training and development help employees feel supported and envision a future at your company. Both enhance their happiness and success, making them more likely to remain loyal. Training doesn’t have to focus exclusively on professional skills. You might also offer tools to support employees’ financial wellness, mental health, and life skills. These help demonstrate you care about your people more holistically.

Read more: The Power of an Effective Employee Training Plan

5. Reward people

Providing feedback and rewarding employees for a job well done can effectively motivate your people. Workplace recognition, done right, can foster collaboration and camaraderie for a more positive work environment. Keep in mind that people enjoy receiving recognition in various ways. Personalize your efforts to ensure the person feels appreciated, not embarrassed.

6. Monitor your managers

Management has a major impact on employee satisfaction. The relationship someone has with a manager can shape their perspective of their job and your company. Being aware of your managers’ leadership styles and their effectiveness in encouraging collaboration and innovation, providing constructive feedback, and motivating their team can help you avoid turnover due to poor managerial skills.

Read more: Top Strategies to Build Employee Engagement

Required skills for retaining talent

Many skills can help you as an individual to play a role in retaining talent. If you are a business leader, you could have a positive impact by developing your skills in the following:

• Relationship building 

• Empathy

• Active listening 

• Conflict resolution

• Adaptability

• Communication

Get started with Coursera.

Effective talent retention rests on a variety of factors. You can support employee satisfaction and improve morale with a Specialization in Leading People and Teams offered by the University of Michigan, including a highly-ranked course on Inspiring and Motivating Individuals. Or start at the beginning with a course in Recruiting, Hiring, and Onboarding Employees from the University of Minnesota on Coursera.