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How to Boost Employee Retention and Reduce Turnover

Recruitment/Retention • March 13, 2017 at 12:15 PM • Written by: PeopleKeep Team

Employee turnover is expensive, costing businesses six to nine months’ salary onHow to Boost Employee Retention and Reduce Turnover average. Savvy employers recognize that keeping their people means more than just delivering paychecks on time. Businesses can support their employees by:

  • Identifying why employees quit.
  • Focusing on what makes employees happy.
  • Making employee retention a priority.

Reasons Employees Quit

When businesses experience high turnover, they need to find out why. Some turnover is inevitable as people move away, move up, or simply move on; however, a business that’s seeing high numbers of people coming and going should dig into what’s causing the company’s revolving door.

According to Square, Inc., there are several common reasons why employees leave.

  • Minimal (or nonexistent) wage increases. The research staffing firm Robert Half surveyed more than 2,100 chief financial officers across industries and found that inadequate salaries and benefits top the list of reasons why employees quit.
  • Bad management. Studies show that workers engage more when their superiors are not only supportive but also interested in helping them set and achieve goals. A Gallup poll showed that modern employees are looking for managers that make them feel invested in and cared about.
  • Unsupportive coworkers. It’s not just a bad boss that can be a deal breaker for workers. Unsupportive or uncooperative colleagues can make a workplace intolerable for an employee.
  • Lack of flexibility. According to a survey by EY—known as Ernst & Young until 2013—flexibility in the workplace ranked high among workers, with 72 percent of employees saying they value “being able to work flexibly and still be on track for promotion.” Flexibility perks, such as on-site childcare, were especially important to millennial workers.
  • Unrealistic workloads. A TINYpulse employee retention survey of more than 400 workers revealed that employees experiencing burnout were 31 percent more likely to quit than workers who felt content with their workload.

What Employers Should Focus On

In addition to identifying what causes employees to leave, businesses should also focus on what motivates them to stay. Human resources consulting firm MJ Management Solutions, Inc., spotlighted strategies that lead to happier, more productive employees.

  • Keep workers motivated. Even simple, inexpensive incentives like an extra day off or a free lunch can make workers more excited about their job and the company.
  • Offer a range of benefits. Cookie-cutter benefits packages can be ineffective. Modern workers favor benefits packages that allow them to choose the benefits that best suit their needs.
  • Encourage and reward personal development. Perks like continuing education and tuition reimbursement not only show workers the company is willing to invest in them, but they also result in better trained, more qualified employees.
  • Promote current employees. Promoting from within sends a message that the business is interested in fostering growth among current employees.
  • Communicate. Ongoing communication among supervisors, owners, and employees helps keep everyone on track and aware of common goals.
  • Encourage feedback. Feedback should run both ways. Businesses should be open to employees’ suggestions and willing to accommodate them when possible and when it makes sense for the business.

Small Business Retention Ideas

Do you know your business’s retention rate? Knowing where you stand is crucial to developing an effective retention strategy. (By the way, 85 percent or higher is considered a healthy employee retention rate—read about more retention ideas for small businesses.)

Once you know your company’s retention rate, you can create strategies to improve it—for example, conducting regular one-on-one talks with employees to offer feedback and gauge how they’re feeling about goals and expectations. Employers should also consider tailoring employee benefits, such as health insurance, to the individual rather than offering a one-size-fits-all package.


Bottom line, businesses and employees both benefit when businesses are actively engaged in keeping their people motivated and happy. By understanding why employees leave and taking steps to improve employee retention, businesses can reduce turnover and hire promising new talent.

Download our employee retention eBook to learn how to keep your most valued employees without breaking your budget.

Which employee retention strategies have worked for your business? Let us know in the comments below.

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