The declining retention rate worldwide has resulted in substantial economic losses, both in terms of skilled labor shortage and the cost of training replacements. Retention rates have become even more challenging as many employees have re-evaluated their career goal and priorities in light of the pandemic, such as flexibility, work-life balance and employee well-being. Many employees experienced burnout or felt disconnected from their colleagues while working remotely.

The article discusses strategies to improve employee retention rates, which have become a critical concern for many HR leaders. 

Part 1: The Obvious

1. Create a Positive Work Environment: Foster a positive work environment with opportunities for professional growth, work-life balance, and recognition of achievements.
2. Provide Competitive Compensation and Benefits: Offer competitive compensation and benefits packages, including health insurance, retirement plans, and performance-based bonuses.
3. Offer Professional Development Opportunities: Provide opportunities for professional development through training, mentoring, and coaching. Missing a clear development path is on the top of the list for employees leaving companies. 
4. Encourage Open Communication: Promote open communication within the organization, including feedback surveys and meetings with managers.
5. Recognize and Reward Employee Contributions: Recognize and reward employee contributions through awards and incentives.
6. Flexible Hybrid Work Models: Implement flexible hybrid work models that allow employees to choose when and where they work, which can lead to higher retention.
7. Exit Interviews: Provide neutral and objective exit interviews to understand the reasons for the employee’s departure, to provide post-exit surveys, and to analyse the data.  

Part 2: The Difficult

1. Recruiting: The recruitment process significantly impacts retention rates by hiring the right candidates, providing a positive candidate experience, setting clear expectations, and offering ongoing training and development. No many organizations are yet taking advantage of the worldwide potential in their hiring process.
2. Selection: Performance and attitude appraisals help identify high-performing employees, provide feedback, address performance issues, identify team players, and offer opportunities for personal development, contributing to long-term retention.

Part 3: The Creative

1. Sabbatical: Paid sabbaticals can improve retention by offering rest, professional development, enhancing loyalty, attracting and retaining top talent, and stimulating creativity and innovation.
2. JP&R (Job Planning & Review): Regular job planning and review sessions clarify expectations, provide feedback, identify career goals, address concerns, and offer opportunities for skill development, all of which contribute to long-term retention.
3. Don’t Hire or Hire Differently: Consider alternatives to full-time employees, such as independent contractors, temporary workers, outsourcing, automation, job sharing, or utilizing Employer of Record (EOR) services to manage retention effectively.

Part 4: The Money

Besides fair payments and appropriate salary increases vesting stock options can influence retention by:

1. Encouraging Long-term Commitment: Stock options vest over time, incentivizing employees to stay with the company for the long term.
2. Aligning Employee and Company Goals: Stock options make employees shareholders, aligning their interests with the company’s success.
3. Providing a Financial Incentive: Stock options offer financial incentives, especially in competitive fields, encouraging employees to stay.
4. Recognizing Employee Contributions: Stock options can be used to recognize and reward employees’ contributions, leading to higher job satisfaction.

Improving retention rates is essential for reducing costs, increasing productivity, enhancing knowledge transfer, improving customer satisfaction, and enhancing the company’s reputation. Utilizing tools like checklists can be valuable for implementing effective retention strategies.

Key takeaways:

• Get the checklist or build your own which serves as an excellent overview and communication tool
• Analyse what has been implemented to what degree and what has been excluded for what reason
• Look at the untouched areas and how this could fit into your company philosophy
• Make sure you understand the reasons for the employee’s departure, provide post-exit surveys, and analyse the data.  

The full version and the checklist are available for clients under the IEC Executive Directions articles. For questions or setting up a call with an IEC Practitioner please get in touch with pm@theIECgroup.com