Employee retention is crucial for the success and growth of any organization. High employee turnover rates are detrimental to a company's productivity, morale, and overall performance. Therefore, it's essential for businesses to implement effective retention strategies.
In this article, we'll go over some top strategies that can help you retain your valuable employees.
Offer competitive compensation and benefits
While there are many innovative employee retention strategies, one of the most effective ways to retain an employee is by offering a competitive salary and a wide range of benefits. Employees want to feel valued and rewarded for their hard work and dedication. Conduct regular market research to ensure your salaries and benefits packages align with or exceed industry standards. Paying your employees what they're worth is better than paying the price of losing them.
While salary is an important factor, it isn't everything. The benefits you offer can also attract top talent. Our 2022 Employee Benefits Survey Report found that 82% of employees say an employer’s benefits package is an important factor in whether or not they accept a job. But only 66% of employers think it’s important.
Let’s review some essential employee benefits you can offer to your team.
Health benefits are the most important benefit you can give your employees, especially with rising healthcare costs.
When offering a health benefit at your organization, you have some options. You can go with a traditional group health insurance policy or a more cost-effective alternative like a health reimbursement arrangement (HRA).
HRAs are popular because they offer flexibility and are often more affordable than group health insurance policies. With an HRA, you can reimburse your employees tax-free for their qualifying medical expenses, including individual health insurance premiums and out-of-pocket medical costs.
Three of the most popular types of HRAs are:
- The qualified small employer HRA (QSEHRA)
- The individual coverage HRA (ICHRA)
- The group coverage HRA (GCHRA), also known as an integrated HRA
If you want even more flexibility, consider a health stipend. They work similarly to an HRA but with fewer regulations and restrictions on which expenses you can reimburse. The downside is that health stipends are taxable and will not satisfy the employer mandate for applicable large employers (ALEs). With WorkPerks by PeopleKeep, you can easily offer your employees stipends for their health and wellness expenses to support their overall well-being.
If your employees commute to work, providing a commuter benefit is a beneficial way to attract and retain them. Commuter benefits help employees with the cost and time it takes to get to work. These benefits are also called transportation, parking, or employee transit benefits.
Here are some examples of commuter benefits:
- Ride-sharing allowances for Uber or Lyft
- Vehicle maintenance allowance
- Bicycle maintenance allowance
- Toll reimbursement
- Fuel cards or gas reimbursement
Retirement plans, like 401(k)s or pension plans, help employees save for the future and secure their financial stability after they retire. Our 2022 Employee Benefits survey found that 87% of employees value retirement benefits or retirement accounts, yet only 54% of employers offer them. Providing retirement benefits can help you become an employer of choice.
Provide professional development opportunities
Employees are more likely to stay with a company if it offers them career advancement opportunities. Our report found that 61% of employees value professional development benefits, while only 40% of employers offer them.
To improve retention efforts at your organization, you can implement training programs, mentorship initiatives, and career development plans. These can all help your employees enhance their skills and advance in their careers. You should also encourage your employees to set goals and provide them with the resources and support they need to achieve those goals.
Additionally, promote from within whenever possible. Employees should feel that their hard work and dedication are recognized and rewarded with opportunities for growth.
You can invest in employee development with a customized stipend through WorkPerks. Your employees can put the allowance you offer them toward certifications, online courses, conferences, career coaching, college courses, and more.
Create a positive work environment
A 2022 FlexJobs survey1 found that toxic company culture was the number one reason workers quit their jobs during the Great Resignation.
If you want to retain your current employees, you need to maintain a positive work environment that makes everyone feel welcomed and appreciated. Create a workplace culture that values open communication, collaboration, and respect. When you encourage teamwork and provide opportunities for employees to socialize, they can build relationships with their colleagues and your brand.
On top of improving employee retention rates, employees who work in a positive environment are more likely to achieve company goals. A University of Oxford2 study found that employees are 13% more productive when they're happy at work.
Encourage work-life balance
An overworked employee won't last long. Maintaining a healthy work-life balance is essential for employee satisfaction and employee well-being. Offer flexible work arrangements, such as remote work options or flexible hours, to accommodate the needs and responsibilities of your employees. Our 2022 Employee Benefits Survey Report found that 88% of remote employees rated a flexible work schedule as “very” or “extremely important,” compared to 74% for in-office workers.
Additionally, you can prioritize your employees’ personal lives by encouraging them to take breaks and use their vacation time. Managers should also lead by example and promote work-life balance within the organization.
Provide regular feedback and opportunities for input
Employees appreciate feedback on their performance and want to feel that their opinions and contributions are valued. Implement regular performance evaluations and provide constructive feedback to help employees grow and improve.
Additionally, create opportunities for employee feedback on company policies, processes, and decision-making. You can gather feedback through employee surveys, such as engagement surveys or anonymous surveys. By normalizing feedback within your organization, you can improve your employee experience and boost employee morale.
Recognize and reward employee achievements
Employee recognition and rewards are powerful motivators and can significantly impact employee engagement and job satisfaction. A 2022 Gallup and Workhuman study3 found that when employee recognition hits the mark, 73% of workers are less likely to experience employee burnout. They're also 56% less likely to leave their current role for a new job opportunity elsewhere.
Implement a formal recognition program that acknowledges and rewards employees for their hard work, achievements, and contributions. This can include monetary rewards, employee of the month programs, or public recognition within the organization.
With WorkPerks, you can offer a one-time spot bonus as a stipend to reward your employees for meeting specific goals, celebrating their anniversaries with your company, or recognizing team achievements.
Implementing an effective employee retention strategy is vital for the long-term success of any organization. By offering competitive compensation, providing growth opportunities, fostering a positive work environment, and promoting work-life balance, businesses can create a company culture where employees feel valued, engaged, and motivated to stay with them for the long haul.
This blog article was originally published on October 19, 2021. It was last updated on August 17, 2023.