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How to improve employee retention strategies

The need for effective employee retention strategies has been put into sharp focus following ‘The Great Resignation’. Since the pandemic has changed the world of work and allowed employees the time to reassess what working means, it has become harder for organisations to keep hold of their talent.

Why does employee retention matter?

Having some level of staff turnover is good for an organisation – it brings in fresh ideas, new skills, and can support a diverse workforce. The issue that organisations face is that employee retention rates are getting lower and people are leaving roles faster. 

Work Institute’s 2020 Retention Report found that 37.9% of interviewees left their organisation within the first year. Similarly, Personio’s 2021 Counting the Cost study found that 38% of respondents planned to quit their job within the next six to twelve months.   

When employees leave quickly into their roles then organisations rarely recoup the costs involved in hiring them – and have to spend on another recruitment process. Gallup estimates that the cost to replace an employee can range from half of their salary to two times their salary. 

As well as the financial cost of low employee retention, there are also losses in the continuity of work, productivity, staff morale, and even customer trust if they are noticing that their touch points within the organisation keep changing.  

What impacts employee retention?

In order to understand how to improve employee retention strategies, it is helpful to analyse the reasons why staff leave organisations. A 2022 global survey by McKinsey ranked the top reasons for quitting:

  • 41% – Lack of career development and advancement
  • 36% – Inadequate total compensation
  • 34% – Uncaring and uninspiring leaders
  • 31% – Lack of meaningful work
  • 29% – Unsustainable work expectations
  • 26% – Unreliable and unsupportive people at work
  • 26% – Lack of workplace flexibility
  • 26% – Lack of support for health and wellbeing

Many of these factors are things which organisations have direct control over. Therefore, an effective employee retention strategy must take proactive steps to address the frictions and unmet needs that lead to employee attrition. 

Employee retention strategies

There is no checklist of ‘easy hacks’ that an organisation can roll out in order to keep people. Instead, companies need to be intentional about creating a culture of care for their staff. When employees consistently receive the message that they matter, the work they do matters and that they are valued this increases employee retention. 

What this looks like in practice:

  • Effective onboarding at the start of a role to ensure confidence
  • Time and budget for ongoing CPD
  • A clear sense of how and when promotion opportunities are available
  • Opportunities to be mentored
  • Constructive and supportive feedback from peers and managers
  • Access to new challenges to develop skills (without being overwhelming)

Fair pay

Any employee retention strategy needs to address people’s rising concerns about pay. As the cost of living rises, ensure that pay increases and expense allowances are in line with (or even above) inflation.

Developing emotionally intelligent workforces

Studies have shown that the skills that make up emotional intelligence can be taught and that EI training improves team performance (Jordan, 2002). Increasing the levels of emotional intellect across all levels of your organisation can support employee retention because of the knock-on effects on relationships and culture:

Having emotionally intelligent leaders and managers means:

  • Better connection to employees’ needs and circumstances in order to appropriately motivate them and move them towards organisational goals (Daniel Goleman’s concept of the resonant leader). 
  • Greater psychological safety for staff. This increases the overall sense of belonging (linked to higher employee retention) as well as the likelihood that staff will open up about issues in order to deal with them before they escalate.
  • Smoother communication to reduce conflict, have clearer expectations, and increase transparency. 

Having an emotionally intelligent staff means:

  • Employees are more resilient in the face of stress (Schneider, 2013) and suffer lower levels of burnout (Olson, 2015).
  • Increased harmony between team members which reduces conflict and supports belonging.
  • Staff are better able to communicate their wants and needs.

Provide flexible working conditions

EY’s 2021 Work Reimagined Employee Survey found that 54% of employees would consider quitting their job if they weren’t offered the flexibility to choose when and where they work. It is vital that every employee retention strategy addresses flexibility by:

  • Genuinely consulting staff about their work pattern preferences
  • Co-creating transparent flexible working policies with staff
  • Ensuring that managers are trained to engage staff remotely without slipping into micromanagement
  • Providing employees with adequate resources to work in different ways and from different locations

Support health and wellbeing

Burnout, an unhealthy workload, and lack of time for self-care all slowly exasperate the employee retention problem. Improving staff wellbeing is not as easy as popping on a few yoga classes to tick a box. Creating a culture of positive health and care means:

  • Consulting with staff about workplace challenges that affect their health and wellbeing – and effectively addressing them
  • Hiring enough staff to ensure a fair workload per staff member
  • Prioritising rest – promoting holiday time, breaks, and time for people to eat lunch
  • Training leaders to discuss wellbeing constructively
  • Building staff capacity to manage their health and wellbeing effectively
  • Embedding wellbeing in the company culture at all levels 


Celebrate employees’ contributions to the organisation. Employee retention will be higher when staff are regularly thanked, recognised, and perhaps even rewarded with financial bonuses, leisure time, or extra opportunities. Taking the time to value people contributes to their sense of meaning in the work they do and their belonging to the organisation.

How we can support you with your employee retention strategy

Join our upcoming mental health and culture training sessions to

  • Learn wellbeing practices to support your staff
  • Deepen your emotional intelligence capacities
  • Build cultures of care that staff can really belong to

Mental Health and Culture Talk