I’ve got good news and bad news.The good news is 83% of employers will invest more into employee retention efforts in the coming year. Hooray! In fact, recent statistics are showing that the majority of employers are turning their focus to retention. As a result, the number of companies prioritizing acquisition dropped a staggering 23 percentage points from the previous year. Businesses are putting their money where their mouths are, and employees are sure the reap the benefits.
Now for the bad news: this extra focus on employee retention comes with some big expectations. On second thought, that’s not so much bad news as it is par for the course for hardworking HR professionals. Big fat budget… shoestring budget… however much you're given, you’re expected to make it work.
If you have a bigger budget to work with this year (congratulations!) and especially if you don’t, it’s going to be more important than ever to invest in strategies that make a big impact on employee engagement and satisfaction. That’s what this article is all about. We’ll look at the reasons employees choose to stay and give budget-friendly ideas that have proven successful at businesses nationwide.
Employee Retention Strategy #1:
Employees Need to Feel Appreciated and Impactful at Work
Employee Retention Strategy #2:
Employees Need to be Satisfied with Work Environment
Employee Retention Strategy #3:
Employees Need to Envision a Future with the Company
Employee Retention Vs Acquisition
If you want a staff full of the best talent you can find, you really only have two options. (Well, maybe a couple more if you can convince your mom to work for free or, you know, summon an army of the undead workers.)
Acquisition and retention. Two means. Same end.
On the surface, acquisition has all the sex appeal. You get to woo superstars and win their approval while simultaneously sticking it to the competition by denying them the best talent. So many companies got sucked into a post-pandemic whirlwind of recruitment that the phenomenon got its own name: The Great Reshuffle. Companies threw their front door wide open, dangling big salaries and bigger promises to entice new people to work for them.
Unfortunately, many forgot to shut the back door and lost a lot of their current most valuable talent at the same time. In an extreme example, Amazon has been churning through workers so fast, the company could literally run out of people to hire by 2024.
Now companies are waking up with a hangover from the hiring binge and rediscovering how much more a focus on retention can benefit the company as a whole. Higher retention rates aren’t just proof of a healthy workplace culture, they help sustain it going forward. That’s because a stable workforce tends to be happier, more productive and more likely to defend and promote their employer. In addition, customers have proven they want to spend their money at companies that treat their employees well.
Perhaps the most important benefit to a budget-conscious HR professional is that employee retention costs less in the long run. After all, once you factor in recruiting, training, lost productivity, the mental toll on the rest of the workforce, etc., studies estimate it can cost anywhere from 6 months to 2 years of an employee’s salary just to reach equilibrium again.
11 Employee Retention Strategies for Any Budget
Some companies have known it all along. After all, I just started my 19th year with Access, a company that has 66% of its workforce with at least 5 years under their belts and a whopping 37% with 10 years or more. This company took my journalism degree and cross-trained me in marketing and research. This company let me go remote before it was cool. I’ve also maybe grown accustomed to paying steeply discounted, member-only prices for hotel stays and theme park tickets (my favorite employee benefit).
Maybe you have some long-termers of your own willing to tell you exactly what makes them around so long. For now, we look to recent statistics and thriving businesses to glean what works best for them. What do we learn?
- The first step to retaining employees is knowing what encourages people to stay.
- The second is investing in the employee benefits and initiatives that will support those needs.
Each of these ideas below will help you accomplish one of these goals: helping your people feel appreciated, creating a comfortable workspace and/or furthering careers. Good news is, most can easily fit into any employee retention budget whether you have more, the same, or (gulp) less money to work with.
Employees Need to Feel Appreciated and Impactful at Work
One of the biggest indicators of an employee’s intention to stay in their current position for more than a year is whether they feel appreciated (recognized for accomplishments, respected and fairly compensated) and impactful (making meaningful contributions to the company and to the world). When employees feel recognized at work, they are:
- 73% less likely to experience “burnout”
- 5x as likely to feel connected to company culture
- 5x as likely to see a growth path at their organization
One study showed that 3x more employees would stay at a company where they feel supported, cared for and valued than would stay where they’re paid more but don’t feel valued. When these needs are met, employees are not only more likely to hang around, but also become advocates for the company, driving its growth and success.
Now let’s delve into some inspiring specifics drawn from organizations that successfully make employees feel valued and recognized.
Compensation and Benefits
Many people equate appreciation with pay. This is especially tricky now, as typical wage increases haven’t been keeping up with the cost of living because of inflation. When money is your only language of appreciation, even generous raises could be perceived as a slap in the face.
It’s no wonder so many companies are adding employee benefits--specifically lifestyle benefits--of all kinds that can have a big emotional impact without a hefty price tag.
A few examples of lifestyle benefits are: corporate wellness programs, mental health initiatives, employee discount programs, childcare stipends, flexible scheduling, pet insurance, travel benefits, tuition assistance and much more.
Real world example: Access Perks is a powerful employee discount program, used by employers to help employees stretch their paychecks with deep discounts on everyday necessities like food, clothing, services and travel. This same program is made available to our own employees. Not only do Access Perks employees love this benefit, we love to help each other find the best deals by sharing our savings stories on a company-wide Slack channel.
Employee Recognition Programs
The data is clear: the more often employees feel recognized (and appreciated) for their accomplishments, the more engaged they’ll be at work. That’s why every casual thank-you, every acknowledgment of a job well done, every recognition for going the extra mile… they can all add up so meaningfully. This is especially true when the culture encourages frequent recognition as part of business as usual.
A culture of appreciation can be hard to maintain – and may still let some employees slip through the cracks if you have varying degrees of compliance from managers. That’s where formal, company-wide employee appreciation programs can have a big impact.
Formal employee appreciation programs might look like: employee of the month awards, face time with upper management, thank you notes from leaders, collectable points that can be redeemed for prizes, peer recognition programs, public shoutouts, milestone celebrations or office parties.
Real world examples: Google’s Peer Bonus program encourages employees to nominate their colleagues for exceptional work. Southwest Airlines awards SWAG (Southwest Airline Gratitude) points that employees can redeem for merchandise or gift cards.
Employee autonomy means trusting people to manage their own time and make important decisions regarding how to complete their tasks.
When people have autonomy over their work, they can develop invaluable skills like creativity, problem-solving, independent thought and collaborative teamwork. These are precisely the leadership skills they need to grow a thriving career and feel purposeful at work. Employees who feel purposeful at work are 2x more likely to stay.
Some companies are giving their employees more autonomy by: offering flexibility regarding when and where people work, providing the tools that will help them perform or by training managers to stop micromanaging.
Real world examples: 3M launched its 15% program in 1948, encouraging employees to use 15% of their time on personal passion projects. Famously, the Post-It Note and many of 3M’s most innovative and bestselling products were developed as passion products. Google, Apple and other companies have followed suit and found similar results.
Communication is the lifeblood of businesses, but it can’t go only in one direction. When the flow of communication feels one sided, like directives from on high, it creates an atmosphere of disconnection.
Upward feedback happens when employees are allowed to evaluate their managers and other high-level authorities in the company. Simply accepting, even encouraging, upward feedback isn’t enough. Employees who see their employer take meaningful action on their feedback are 37% less likely to search for another job. Lack of follow-through can quickly erode the trust that employees have for their employer.
Some examples of encouraging upward feedback include: suggestion boxes, focus groups, employee surveys, or time during performance reviews to give feedback.
Real world example: Screwfix encourages employees to give honest opinions and regularly provide feedback to managers on a bi-weekly basis, an initiative that has helped gather the information needed to streamline the customer experience.
Employees Need to be Satisfied with their Working Environment
The elements of a workplace environment cover concrete things like the comfort of the chair they’re provided, and also more ephemeral things like the office’s overall vibe.
As much as 60% of negative workplace outcomes (like burnout, intent to leave and voluntary quitting) can be directly attributed to toxic workplace behaviors. On the other side of the spectrum, the top three reasons employees planned to stay in their current jobs this year resulted from positive workplace reasons:
- Flexibility (28%)
- Strong sense of belonging (11%)
- Strong working relationship with manager (11%)
There are a lot of terms being used to explain the phenomenon. Some call it “cultivating a positive workplace culture.” Some call it “aligning company values and employee values.” Whatever you call it, companies that put effort into making their workplaces more welcoming see better employee retention rates.
Let’s look at some ideas that could help your employees feel satisfied with your workplace.
At bare minimum, employers are required to follow safety protocols, keep the office a reasonable temperature and take other measures to ensure the safety of employees. However, full-time employees spend a third of their day or more at work, and they’re getting pickier about not just the safety, but also the comfort of the workplace. In today’s modern workplaces, creating a comfortable and ergonomic office environment is no longer viewed as an extravagance, but as a fundamental aspect of employee satisfaction and productivity.
Some businesses try to stand out by offering astounding numbers of in-office perks, but are a few economical ideas that will help employees be their most productive: ergonomic furniture, adequate technology, stipends for home offices, clear divisions between quiet and collaborative spaces, accommodations for workers with disabilities, and fitness and wellness resources.
Real world example: Meta is bringing back many in-office perks to ease the transition away from remote work, like happy hours, snack bars, and an on-site cafeteria.
How many times have you heard the phrase: “people don’t quit jobs, they quit bosses” or some variation? Clearly, leadership at a company can have a massive impact on an employee’s desire to stay.
Empathetic leaders show understanding for employees’ personal and professional challenges, and 90% of employees are more likely to stay with an organization that empathizes with their needs. On the other end of the spectrum, allowing toxic behaviors in the office, especially among managers, drives away excellent employees every day.
Here are some examples of bad management styles to watch for and correct in order to foster a more empathetic culture: micromanagement, gossiping, indecisiveness, chronic blame passing, over-promising and expecting employees to deliver, manipulating and others
Real world example: Ed Bastion of Delta recently won the Ethical Leadership Award for his empathetic treatment of employees in an industry hit hard by the pandemic.
Flexible Work Schedules
Like many people, you may associate flexibility with the WFH (work from home) vs RTO (return to office) war happening now. However, flexibility can mean many things, like the ability to shift hours earlier one day to attend a child’s ball game. Employees who are able to work the way they prefer are more than twice as likely to be highly engaged and are 22% more likely to say they will not job hunt.
Flexible scheduling could look like: work from home or hybrid options, range of hours employees can set their own hours within, accommodations for working parents and caretakers, unlimited time off or 4-day work week options.
Real world example: Apple’s retention efforts include helping employees balance work with life through the flexibility to choose when and where they work, and even a job-sharing option allowing two employees to co-work together.
Burnout is defined as exhaustion, cynicism and inefficiency that happens after chronic stress has reached critical mass. Unfortunately, added stress that started during the pandemic has only gained momentum as pressures build both in the office and out. Employees who are burned out at work are 3.4x as likely to say they “definitely” plan to look for a new job within the year compared to those who are not burned out.
Some ideas for preventing burnout deal with managing the stress that originates in the workplace, including: encouraging use of regular breaks, supporting or even subsidizing vacations, re-evaluate workloads and expectations, offering EAPs (employee assistance programs), offer mental health support and enthusiastically share your values and vision.
Real world example: Adobe’s Sabbatical program gives established employees an extended sabbatical on workplace anniversaries to “relax, recharge and reenergize.”
Employees Need to Envision a Future with their Employer
If the great resignation showed us anything, it’s how easily employees can be wooed away by the promise of more money.
Then the regret hit. As many as 80% of workers who quit a job during the great resignation, decided later that some factors are more important than salary. Notably, many of them simply missed their old co-workers. Others realized they valued the ability to advance their careers in a company over the amount on their next paycheck. In fact, employee retention rates are 34% higher for employees given access to professional development. It boils down to an employee’s ability to envision a long and thriving future with an employee. If they can’t, they’ve probably already got one foot out the door.
According to one survey, 91% of managers believe culture fit is more important than experience or skills when evaluating employees. In other words, it’s a good idea to look first for the people who fit nicely into your corporate culture, because you can always teach them the skills they need on the job. Not only that, you can bet many of your most compatible employees would love the opportunity to learn new skills.
So how do you find employees who would be happy working for you long term? Here are some budget-conscious ideas to help your employees envision a future at your company (and hopefully stay to make that future come true).
Advancement Opportunities & Career Pathways
Career pathways outline all the roles, responsibilities and opportunities for advancement. More importantly, they are roadmaps to those outcomes, showing the benchmarks to pass, the skills to gain and the sequence of positions to hold that will help an employee move through the ranks throughout his or her career. Consider that:
- 43% of employees said their top reason for leaving a job was limited career paths.
- Employees who are satisfied with their employer’s career development and training are 1.7x more likely to stay.
With these findings in mind, defining a career path might be just the step you need to get those employees envisioning a future with you. But where to start? When considering career paths for your employees, consider implementing: skills assessments, career mapping workshops, mentorship programs, regular check-ins for goal setting and internal promotions.
Real world example: Spotify is so dedicated to Internal Mobility that employees switch rolls every 2 years on average, and the company advocates for non-linear growth and winding career paths.
Upskilling, Reskilling and Filling Skills Gaps
Don’t have an easy solution for career advancement? Lucky for you, the opportunity to grow and learn in any capacity still leads to satisfaction. So, the next time you fill a needed role in the company, don’t jump to “who can we hire that already knows ____?” Think first “which employee can we train to learn ____?” Upskilling (building on an employee’s current skillset) and reskilling (teaching an employee a brand-new skillset) are two ways you can keep valuable employees in your ranks while simultaneously signaling to your workforce that you are dedicated to helping them advance.
One reason to stay dedicated to employee development is that skills gaps are rapidly widening throughout U.S. companies. Spurred on by the lingering effects of the pandemic and by rapid advancements in technology, some skills are rare among job applicants too. Plus, experts say this gap will only widen as higher education lags behind need.
To fill these skills gaps internally, look to some of these options: workshops for learning soft skills (communication, adaptability, teamwork, etc.), leadership training, certification programs, job shadowing co-workers, tuition reimbursement or on-the-job training.
Real world example: IBM’s Skills Build platform offers free online courses and badges to help employees and job-seekers gain new skills they need for a thriving future in tech.
Socialization and friendship building opportunities
Work friendships can’t be forced, but they can be encouraged. Somewhere on the scale between “unfriendly competition” to “work romances” is a sweet spot where harmonious and respectful relationships thrive. This is zone where workplace friendships can make a huge difference in an employee’s desire to stay at a company. Among workers who have friends at work, 76% say it makes them more likely to stay at that job, and 25% would consider leaving if their friend did.
Workplace activities can provide opportunities to talk and bond. (Bonus: some can pull double duty as team building or as career development too) Some ideas include: peer learning groups, DEI friendly communities, an office 5K, volunteer hours that count as working hours, guest speaker lunch & learn, picnic with the families, and a health and wellness fair.
Real world example: Adobe facilitates employee networks and social groups of all kinds, some to foster inclusion among people of similar backgrounds, and others to connect those with similar hobbies from board games to genealogy to salsa dancing.
Help Employee Budgets Without Blowing Yours
Whether your investment into employee retention comes in the form of money, time, effort or all three, we want to help ensure that investment pays off. That’s why we love employee discount programs as an effective tool for engaging and retaining employees. The best employee discount programs specialize in discounts at local businesses they already know and love on everyday necessities: food, clothing, services, travel, etc. Employees can spend less of their paycheck on life’s needs, and they’ll have their employer to thank for it. The best news is, it fits into any employee retention budget. When you partner with Access Perks, you can offer them all this for about the cost of a candy bar. (How’s that for return on investment?)
Check out Access Perks, America’s largest private discount network here.