What Is Employee Retention? Definition, Tips, Examples, & More

Employee retention is the effort of employers to reduce the voluntary resignation of employees. It reflects an organization's ability to reduce employee turnover rates and can significantly reduce the potential negative impacts of high employee turnover. Employers invest in employee retention strategies to achieve measurable benefits and reduce the potential negative impacts of high employee turnover. Employee retention is important as job security is on the rise and job openings are on the rise. Retention policies can directly impact the organization's revenue and morale and engagement.

Benefits of retaining employees include improved customer experience, increased productivity, and increased customer loyalty. However, high employee turnover can cost organizations an estimated $100,000 for every resigning employee, and can negatively affect succession planning and client relationships. Retention strategies should start from day one and include setting the right expectations for employees from the beginning of the hiring process. Assess job applicants with a sample task and introduce them to the company culture. Recognize employees' efforts, embrace work-life balance, and reward employee loyalty to reduce attrition rates.

Recognition programs should be tailored to remote work. Work-life balance should include cutting back on administrative duties and unneeded meetings. Reward employee loyalty to reduce attrition rates. Managers should invest in anniversary reward programs to appreciate committed employees, advance their careers, nurture social ties, reconsider benefits and compensation, and shift a small percentage of the offered compensation to a pay-per-performance scheme. This approach has a higher return on investment in terms of retention.