Retention assumes great importance in the current environment for a number of reasons including: the economy improving, young employees looking for more progress in their career, management not always being able to motivate the younger generations, the work environment not keeping abreast with the outside world, the workforce being in great demand and vicious competition for talent.

How to Retain the Best Employees

© | alphaspirit

In this article, we examine: 1) employee turnover – the actual total losses per departing employee, 2) top 10 reasons why best employees might leave, and 3) how to keep them from leaving.


It is difficult to fathom the costs for employee turnover because the costs are of a considerably hidden nature but not impossible. One must take into consideration certain factors that figure in determining the actual total outlay per lost employee (this includes not just monetary losses but also lost time).

  • Lost productivity: When someone leaves, there may be no one to take his place for some time. If other employees chip in, the likelihood is that only the key tasks would be completed while other tasks are left undone. Further, even if there is a replacement for the lost employee, it may take him up to 2 years to reach the level of efficiency of his predecessor.
  • Lost knowledge: Plenty of people may be able to perform the responsibilities that the previous employee engaged in. However, they may lack in the knowledge the lost employee had in terms of things like: where relevant information is located, passwords, knowing people, traditions and the boss’s preference; and other information that comes from handling the job and working at the firm for years.
  • Advertising, recruitment, and hiring: There are expenses whether the recruitment is carried out in house or through external recruiters. With respect to in-house HR, the recruiting staff, HR or hiring manager (one man handling the entire hiring process, usually in small business) have to devote time and expense towards advertising job vacancies, screening resumes, interviewing and on boarding. Sometimes, the associated expenses can go as high as 1.5 times the annual salary, maybe even more. For lower level positions, the expenses would be much less but still considerable. Interviewing local candidates may cost less but a good deal of time is spent in perusing resumes, interviewing candidates and discussions among colleagues to select the right person to hire. Similarly, external recruiters have to be paid for their services, whether contingency firms or retained firms.
  • Onboarding for a new hire: Onboarding for a new hire entails expenses pertaining to training and the management’s lost time.
  • Training expenses: For the initial 2 to 3 years of training, the management may have to spend at least 10 to 20 percent of an employee’s pay or even more. Even after training classes, someone would have to check the new employee’s work till the latter has proven himself. So the employee who trains is losing time away from his work.
  • Lost engagement (of other employees): Demoralized by a high turnover rate in their company, the remaining employees feel less engaged and consequently, productivity suffers.
  • Overworked employees (overtime to make up for the lost employee): Some of the other employees will have to put in extra hours to complete the work of the employee who left. Even if they are not paid extra for this, the overwork exhausts them and negatively impacts their quality of work, engagement and job satisfaction. They may decide to leave themselves and start job hunting. The longer they have to be in a overworked situation, the more difficult it will be for the management to get back their goodwill even after a replacement has joined.
  • Cultural impact: Whenever an employee quits, other employees wonder as to how it happened and may become depressed because of it. This is addition to the unhappiness associated with their additional responsibilities such as extra work and the need to train new staff.
  • Customer service and mistakes: New employees may be less skilled or require more time with respect to resolving issues. This may lead to costly errors (more in the healthcare industry). Initially, if they are not able to deliver as good customer service as their predecessors, it may cause customer dissatisfaction and complaints.


1. Salary/No raise

According to a recent survey from CareerBuilder which determined the reasons why employees in the U.S would want to leave their jobs in 2014, the top reason was found to be concerns over salary (66 percent). Paying employees well is a sign of respect. The majority of good employees won’t ask for a raise. Sooner or later they’ll get frustrated and quit.

2. Stagnancy (no career growth)

According to the Randstand Workmonitor Survey of June 2014 covering 33 countries across the globe, 66 percent agree that they would change jobs to get better career opportunities. This statistic just goes to show how much importance employees attach to being able to grow their skills and progress in their career, wherever they work. If they’re not satisfied, they’ll look elsewhere.

3. Feeling of detachment from the big picture

Employees feel demoralized when they don’t know how their work relates to the overall business plan and strategy of the organization. If they don’t feel connected, they may be prone to leaving.

4. Unsatisfactory work-life balance

It is not uncommon for employees to handle personal matters during work hours or to engage in work-associated matters in the middle of the time they usually spend with family or for other personal matters. The outcomes of poor work-life balance can be seen in terms of absenteeism, stress and burnout and reduced productivity which shows that an employee doesn’t really feel happy about coming to work.

5. Poor communication between management and employees

It is a well-known fact that more than jobs or companies, employees leave their managers or immediate superiors. With respect to poor communication between the management and employees, employee complaints are frequently with respect to the following:

  • Failure to give the employee a framework within which the latter believes he can succeed,
  • Lack of lucidity about earning potential,
  • Lack of lucidity about expectations,
  • Did not carry out scheduled meetings,
  • Not enough feedback pertaining to performance.

6. Considerable stress

Changing expectations from the management can be a recipe for irritation, nervousness and considerable and unhealthy stress. In addition, poor work-life balance and a rigid work environment can also add to stress.

7. No recognition or feeling of value

When employees feel they are not recognized for their hard work or achievements, that they are taken for granted or not valued, their motivation and job satisfaction comes down. According to a Spring 2014 GloboForce Survey, 86 percent of those surveyed agree that being recognized for their contributions and efforts motivated them in their job.

8. No fun

Working for eight straight hours without any fun or entertainment in-between is less and less appealing to the majority of employees, especially when the world is currently so fast-paced and interconnected in nature. Inflexibility in the work environment as well as boredom and lack of challenge in the job are deterrents when it comes to employee retention.

9. Underemployment

When an employee feels that his skills are being underutilized or that he is not being challenged enough to stretch his skills, he feels discouraged and less engaged. In addition, when skills are not properly matched to a particular job profile, it may create problems in employee job satisfaction as well as productivity.

10. Friction with co-workers

Friction with co-workers can affect employee performance negatively and consequently, company morale and customer satisfaction. This in turn would make the affected employee(s) feel like moving to a more harmonious, positive work environment by working elsewhere.


Fair pay, raises when deserved and perks

Take steps to ensure equitable treatment and fairness when it comes to the salary for your employees and to pay in accordance with what’s required by law. An employee with similar experience, qualifications and contributions than another employee should not feel that he is being paid less than his counterpart.

At the minimum, employees should be paid market rate or even more than that as soon as you can afford it. It is good to establish a wage and job evaluation system. Give your employees raises when they deserve it, don’t delay or it will be too late. Also give them perks that would keep them motivated to put in their best.

Give them learning opportunities and a growth path

Help your employees make a development plan. Ask them about the skills they wish to learn and the areas they desire to improve and within which time frame they hope to do so. Arrange training programs to help employees with their development endeavors. Endeavor to incorporate challenges into their work. Whenever there are vacancies in your company, before looking elsewhere for people to fill the vacant slots, look within your own company to see if anyone’s skills could be stretched so as to be ideally suitable for the position. In addition, ensure that your employees come to know of internal openings as and when they come so that they can apply for them if they want to.

Make them feel a sense of purpose and contribution to business goals

Managers must make it a point to spend time individually with each of their reporting staff and discuss how the latter’s job, deliverables and contribution relate to the company’s business plan and strategy taken as a whole. This will help the employees feel that their efforts are linked to something that is bigger than their job alone. Don’t leave the responsibility to your executive staff or even take it for granted that they would communicate this information to your employees.

Help improve their work/life balance

Provide flexible work arrangements

Arrangements that can be considered include:

  • Allowing employees to put in extra hours during the week so that they get a half day each week or an additional day off on every alternate week,
  • Part-time work arrangement
  • Telecommuting (even once a week would be appreciated)

Vacation and sick-leave

Provide employees with an opportunity to earn or purchase more vacation time. Supervisors would also do well to encourage employees to utilize their sick-leave and vacation benefits when it is evident that they are ill or burned out.

Provide an Employee Assistance Program (EAP)

This is a work-based, voluntary program that provides confidential and free assessments, referrals, short-term counseling and follow-up solutions to employees with work-related or personal problems. Services provided may include elder care, referrals for childcare and adoption support.

Devote time to clear communication

One cannot underestimate the importance of non-verbal cues. Face-to-face communication with employees is essential for the communication to be effective, as well as to establish trust. With respect to employees in remote locations, it would be wise to meet up with them in person a minimum of two or three times a year, if not once a month. Advocate an open-door policy so that employees can come to you freely with their feedback and concerns. Devote time to giving your employees lucid performance-based feedback, as well as to clearly communicate their earning potential to them.

Let your employees know exactly what you expect from them

Management thinkers such as Curt Coffman and Marcus Buckingham (author of “First Break All the Rules”) and Ferdinand Fournies (author of “Why Employees Don’t Do What they are Supposed To Do And What To Do About It) concur on this: a satisfied employee has a clear understanding of what the expectations are from him, every day at work. This does not mean that jobs should be unchanging. Managers should endeavor to have a specific framework in place within which people can have a proper awareness of what is expected from them. When expectations keep changing, people feel unhealthily nervous and stressed.

Appreciate, recognize, reward

Ensure that your employees feel appreciated, recognized and rewarded.

  • Say “thank you” to your employees, that often would work wonders.
  • Give your employees raises suitable for their degree of achievement and accomplishment.
  • In addition to raises, provide bonuses and commissions, which would boost employee engagement and retention.
  • Make it a point to give your employees more positive feedback or to appreciate them more often for the things they are doing right and their considerable hard work and dedication (wherever applicable).

Reinvent the work atmosphere

Attracting, engaging and retaining the best talent in your company calls for reinventing the work atmosphere and reducing the gap between work and play. Companies must be open to a culture of increased innovation and autonomy and engage staffs around a powerful purpose and mission. Here are some suggestions:

  • Make snacks or healthy food items easily available in the office
  • Let employees have some time towards the end of working hours for pure fun
  • Provide an opportunity once every month, all employees can go for a movie and lunch

Match job to employee skills

The requirements of a particular job should be carefully examined for the requisite skills and employees should be tested for the required qualifications. Utilize job descriptions and job analyses to lessen the possibilities of there being a mismatch between the staff’s skills and the job.

Resolve coworker conflicts before they get worse

Talk to the clashing coworkers and try to find a solution to the problem. Be open to the points of view of both parties. You can brainstorm ideas in such a way that you ultimately arrive at a win-win solution. This must be done fast lest the situation should reach a level where it goes out of control. You can also consider bringing in a mediator or a neutral party. If the dispute is an emotionally charged one, let there be a cooling off period for the feuding parties before working on a solution. Then move forward, promote an environment of tolerance, respect and civility in the office.

5 Secrets For Attracting & Retaining Superior Employees | Be The Best Boss

Have a solid employee retention strategy in place and reap a number of benefits including reduced employee turnover and optimum business success.

Comments are closed.