Employee Retention: Reduce Employee Turnover with 21 Practical Strategies

What is Employee Retention?

Employee retention means the strategies to reduce turnover and attrition by recognizing, rewarding, and respecting the employees’ contribution to the company.

Employee retention comprises of HR policies and strategies to attract, motivate and retain talented individuals by providing an enabling working environment. Rewards, recognitions, space for innovation and growth are some of the strategies for employee retention.

Retaining high-performing employees is not just an HR function but a strategic imperative that directly impacts a company’s bottom line, that is why HR in nowdays is called a “People Strategy”.

In the high-stakes “talent wars”, companies are going to great lengths to secure the best and brightest.

Examples of Companies with Best Employee Retention Programs

• Australian banks are expanding their operations in India, driven by a tech talent shortage in Australia. This strategic shift underscores the critical role of “employee retention strategies” in today’s competitive business landscape.
• A recent report by The Foundation found that 26% of employees believe their company lacks a strong culture. This finding highlights the importance of a robust organizational culture in retaining top talent.
• Forbes reports that purpose-driven organizations are more successful in managing unexpected situations and promoting growth, thereby enhancing “employee retention”.
• Google, a tech giant known for its innovative “people strategy”, reported a turnover rate of just 10% in 2022, significantly lower than the tech industry’s average of 13.2%. This is no accident but the result of a meticulously crafted approach to “employee retention strategies”.

As companies grapple with the challenge of keeping their top performers, the importance of effective strategies for “employee retention” has never been more pronounced.

Aleeshah Nujjoo, a renowned HR expert, says, “Rewards management strategies serve to create a motivated and committed workforce. Using the correct types of rewards can thus provide a competitive advantage.”

For instance, Google, known for its innovative work culture and employee benefits, has one of the lowest employee turnover rates in the tech industry.

Why is Employee Retention Important?

Employee retention is not just about keeping employees—it’s about strategically creating an environment that encourages them to stay and contribute to the organization’s success. As the “talent wars” intensify, companies prioritizing employee retention will be better positioned to attract and keep the talent they need to thrive.

Walid Abdullah Al-Suraihi, a management expert, notes, “Employees have several reasons to leave their workplaces, such as job stress, job satisfaction, job security, work environment, motivation, wages, and rewards. However, the organization must understand the needs of its employees, which will help organizations adopt certain strategies to improve employee performance and reduce turnover.”

Microsoft’s focus on employee growth and development has helped it retain top talent in the highly competitive tech industry. The company’s commitment to providing opportunities for learning and advancement has made it an attractive workplace for ambitious professionals.

Advantages of Employee Retention

• Cost Savings: Replacing an employee can be expensive. Costs include recruitment, training, and the potential for overtime work by existing staff if the position remains vacant for some time. A Society for Human Resource Management study estimates that replacing an employee can cost up to twice the employee’s annual salary.
• Maintaining Company Knowledge: Long-term employees develop a deep understanding of the company, including its strengths, weaknesses, opportunities, and threats. They carry institutional knowledge that is beneficial for the company’s growth.
• Employee Morale: High turnover can lead to a decrease in morale among remaining employees. On the other hand, a stable workforce can support a strong, positive company culture.
• Customer Satisfaction: Long-term employees are likely to have better relationships with clients. They understand the customer’s needs, preferences, and expectations, contributing to customer satisfaction and loyalty.
• Productivity: New employees take time to reach the productivity level of an experienced worker. Retaining employees can result in higher productivity levels.
• Attracting Talent: Organizations that retain employees are more likely to attract quality talent. A low employee turnover rate is attractive to potential employees as it indicates a positive working environment.

The Cost of Employee Turnover

Employee turnover is a significant concern for businesses worldwide. It not only affects the company’s finances but also impacts productivity and morale. As Bhavani. A, Dr. Babu Sundararaman C, and Dr. Sridevi G noted in their study, “The Retention Revolution: A New Approach to Address Employee Attrition,” losing talented and experienced employees can have significant negative impacts on a company’s productivity, morale, and finances.

Direct and Indirect Costs

The cost of employee turnover can be categorized into direct and indirect costs. Direct costs include the expenses associated with recruitment, such as advertising, interviewing, and hiring a new employee. It also includes the cost of training the new employee and the time it takes to reach the departure employee’s productivity level.

Indirect costs, on the other hand, are less tangible but equally impactful. These include the loss of institutional knowledge, decreased productivity due to the disruption of team dynamics, and the potential negative impact on customer service and client relationships.

As Prof. Dr. Joel Chagadama, Prof. Dr. Desire S. Luamba, and Prof. Dr. Ir. Edouard M. Mutamba pointed out in their study, “Reducing Voluntary Employee Turnover in Small Construction Companies for Long-term Productivity,” voluntary employee turnover has caused considerable damage to small construction businesses, significantly affecting productivity, profitability, and sustainability.

Failure in Talent Retention is a Strategic Failure: Whatsapp Story

The value of top-quality talent extends far beyond their salary or the perks offered. Their contribution to the company’s productivity, profitability, and overall morale is invaluable. The benefits they bring to the organization are synergistic, creating a positive cycle that builds on itself.

The story of WhatsApp’s founders is a case in point. Brian Acton and Jan Koum were once employees at Yahoo. After leaving Yahoo and being rejected by Facebook, they created WhatsApp, which Facebook later acquired for a staggering $19 billion. This story underscores the potential loss companies can face when they fail to recognize and retain top talent.

When top talent is engaged and motivated, they contribute to the company’s bottom line and inspire and motivate other employees, fostering a culture of excellence and high performance. This creates a ripple effect, enhancing the overall productivity and performance of the organization.
On the flip side, when a company loses a top talent, the loss is not just felt in terms of its direct contribution. The competitor who gains this talent is now better equipped to compete, potentially tipping the scales in their favour.

Retaining top talent is not just about preserving the benefits they bring to the organization; it’s also a strategic move that prevents competitors from gaining an edge. It’s a win-win situation for the employer – they retain the talent’s expertise and contribution and prevent the competitor from benefiting from it.

Employee turnover costs are multifaceted and extend beyond the direct financial impact. It also includes the loss of potential synergies and the strategic advantage of retaining top talent. As the “talent wars” intensify, companies that understand and address these costs will be better positioned to attract and retain the talent they need to thrive.

The Impact on Team Morale and Productivity

Employee turnover doesn’t just have a financial impact; it also affects team morale and productivity. When an employee leaves, it can disrupt team dynamics and lower the morale of remaining employees, leading to decreased productivity.

As Liang Li noted in his study, “Exploring Factors that Cause Rt Mart’s High Rate of Employee Turnover from the Perspective of Organizational Behavior,” a high employee turnover rate is ordinary throughout China’s retailing industry. This high turnover rate can decrease morale among remaining employees, which can negatively impact productivity.

“Train people well enough so they can leave, treat them well enough so they don’t want to.”

Richard Branson, founder of the Virgin Group

This quote underscores the importance of investing in employee development and creating a positive work environment to retain employees and maintain high productivity levels.

Employee turnover costs are multifaceted, impacting a company’s finances, team morale, and productivity. As businesses navigate the “talent wars,” understanding and addressing the cost of employee turnover becomes increasingly critical to their success.

21 Key Employee Retention Strategies to Reduce Employee Turnover

Strategy-1: Reassessing Compensation and Benefits

The battle for top talent is relentless in the fiercely competitive business landscape. Companies constantly struggle to attract and retain high performers who can propel their business to new heights. A competitive compensation and benefits package is one of the most potent weapons in this talent war. However, it’s not just about the paycheck.

According to a Robert Half report, employees seek a comprehensive package that encompasses health benefits, retirement plans, and initiatives promoting work-life balance.

Take Google, for instance. The tech giant is famous for its employee benefits, including free meals, dog-friendly offices, and on-site wellness and healthcare services. These perks make employees feel valued and foster a positive work environment, significantly reducing turnover rates.

Moreover, a McKinsey study underscores the importance of tailoring your talent retention strategy during mergers and acquisitions. It’s crucial to identify key talent and offer them a blend of financial and non-financial incentives, ensuring talent retention is pivotal to the combined company’s future.

However, it’s essential to remember that if the skills an employee brings to the table are above the industry average, their salary compensation should reflect that. Otherwise, your well-trained but underpaid employee will be an easy target for poaching. After all, employees have families, dependents, and a lifestyle to maintain.

“If you pay peanuts, you’ll end up hiring monkeys.” Sometimes, companies inadvertently hire a tiger-skilled employee in their struggling or starting phase, only to let them go, fearing the need to upgrade the peanuts for other monkeys. But remember, with the ethics of a roadside stall; you cannot build a Fortune 500 company.

Strategy-2: Financial and Non-financial Incentives

While financial incentives are often the first lever organizations pull, they can be costly and less effective than anticipated. Instead, companies should lead with “soft” incentives such as praise, attention from leaders, and opportunities to take on more responsibility, which have proved to be more powerful at motivating talent.

For example, a McKinsey survey of over 1,400 integration executives reported that “praise and commendation from an immediate manager” was the most effective retention lever, scoring above performance-based cash bonuses and increases in base pay.

However, financial incentives still play a crucial role, especially when addressing short-term needs. For instance, inducing a finance manager targeted for layoff to stay for a few months after the close merger to help transition from legacy financial processes to new ones adopted by the combined company.

A balanced approach combining financial and non-financial incentives can be the most effective strategy for retaining high-performing employees. It’s about understanding what motivates your employees and creating an environment where they feel valued and engaged.

Strategy-3: Prioritizing Work-Life Balance

In the modern work environment, work-life balance is not just a buzzword but a crucial aspect of employee retention. The COVID-19 pandemic has further highlighted the importance of this balance as employees juggle their professional and personal responsibilities while working from home.

According to a 2022 ADP survey, 64% of Americans would consider looking for a new job if required to return to the office full-time. This indicates the high-value employees place on flexible working arrangements.

Companies that prioritize work-life balance often see increased employee satisfaction and retention. This can be achieved through flexible working hours, remote options, and ensuring employees are not overloaded.

For instance, Microsoft Japan implemented a four-day workweek in 2019 and saw a 40% increase in productivity. This shows that employees can be more productive and satisfied when they are free to manage their work and personal life, leading to higher retention rates.

Strategy-4: Improving Organizational Culture

Organizational culture plays a pivotal role in employee retention. A positive and inclusive culture can make employees feel valued and appreciated, increasing their loyalty.

Elon Musk, CEO of Tesla and SpaceX, once said, “It’s very important to like the people you work with; otherwise, life [and] your job is gonna be quite miserable.” This quote underscores the importance of a positive work environment in retaining employees.

A strong organizational culture is characterized by clear communication, mutual respect, and shared values. Companies like Google and Netflix are renowned for their unique cultures that foster innovation and employee satisfaction.

For instance, Netflix’s culture is defined by its ‘Freedom and Responsibility’ philosophy. The company gives its employees a high degree of freedom, expecting them to act in the company’s best interest. This approach has led to a highly motivated workforce and has played a significant role in the company’s success.

Improving organizational culture is not a one-time effort but a continuous process. It involves promoting diversity and inclusion, encouraging open communication, and providing opportunities for growth and development.

“I don’t believe in taking the right decisions. I take decisions and then make them right.”

– Ratan Tata, the former Chairman of Tata Group

This quote reflects the importance of a growth mindset in fostering a positive organizational culture.

Strategy-5: Delegating Power along with KPIs

In the modern business landscape, delegation of power is not just a managerial tactic, but a strategic move that can significantly enhance employee retention. When employees are entrusted with responsibilities and decision-making power, it instills a sense of ownership and commitment towards the organization. However, delegation should always be accompanied by clear Key Performance Indicators (KPIs) to ensure accountability and track performance.

“Management is doing things right; leadership is doing the right things.”

– Peter Drucker

Delegating power is a leadership move that shows trust in the employees’ capabilities, thereby boosting their morale and job satisfaction. However, it’s crucial to balance this power with well-defined KPIs that align with the organization’s goals and objectives. This ensures that employees understand what is expected of them and are motivated to perform to the best of their abilities.

Learn about transformational leaders, who have for the ages transformed men into missions and tea-talks into agendas. Transformational leadership style is a blend of empowerment and innovation.

For instance, tech giant Google is known for its culture of empowerment where employees are given significant autonomy in their roles. This is balanced with a strong emphasis on data-driven decision making, where KPIs play a crucial role. This approach has not only fostered innovation but also helped Google retain its top talent.

Moreover, a study by Gallup found that employees who feel they have a say in their work and are held accountable for their performance are 28% more likely to believe their organization is a great place to work. This clearly underscores the importance of delegating power along with KPIs as a key employee retention strategy.

Strategy-6: Investing in Learning and Development Activities

Continuous learning and development (L&D) have become crucial for employee retention in the rapidly evolving business landscape. Companies that invest in their employees’ growth enhance their skills and foster a sense of value and loyalty among them. For instance, Google’s Career Guru program provides personalized career coaching to its employees, contributing to their professional development and job satisfaction.

Moreover, a LinkedIn report revealed that 94% of employees would stay at a company longer if it invested in their learning and development. This underscores the importance of L&D in employee retention.

Tips for a Small Business that Cannot Afford L&D Team

Small businesses may not have the resources to establish a full-fledged L&D team. In such cases, they can adopt the following strategies:

1. Leverage Online Learning Platforms: Online platforms like Coursera, Udemy, and LinkedIn Learning offer a plethora of courses across various domains. These can be used to upskill employees at a fraction of the cost of traditional training programs.
2. Encourage Peer-to-Peer Learning: Create a culture where employees can learn from each other. This could be through knowledge-sharing sessions, mentoring programs, or collaborative projects.
3. Provide Learning Subsidies: Offer subsidies or reimbursements for employees who independently undertake relevant courses or certifications.
4. Partner with Local Institutions: Collaborate with local universities or training institutes for customized training programs.
5. Promote a Culture of Continuous Learning: Encourage employees to continuously learn and adapt. This could be through regular discussions on industry trends, book clubs, or learning challenges.

Strategy-7: Creating Pathways for Growth

Creating clear pathways for growth is another effective strategy for retaining employees. Employees must see a future within the organization to stay motivated and committed. For instance, Salesforce has a well-defined career progression path for its employees, which has contributed to its high retention rates.

“It’s important to provide a career path. Otherwise, they’ll leave. Provide a roadmap for their career advancement.”

Elon Musk, CEO of Tesla and SpaceX

Moreover, a Gallup study found that 87% of millennials consider professional or career growth and development opportunities important in a job. Therefore, organizations need to provide clear and transparent career progression paths, regular feedback, and opportunities for promotion to retain their employees.

Investing in learning and development activities and creating pathways for growth are effective strategies for employee retention. They not only enhance the skills and capabilities of the employees but also foster a sense of loyalty and commitment towards the organization.

Strategy-8: Promoting Intrapreneurship

Intrapreneurship, the concept of fostering an entrepreneurial mindset within an organization, is a powerful strategy for employee retention. It involves encouraging employees to take ownership of projects, think creatively, and act as if they were running their own business within the company. This not only boosts innovation but also enhances job satisfaction and loyalty, as employees feel valued and empowered.

A 2019 report by Gallup found that companies with high levels of employee engagement were 21% more profitable and 17% more productive. Intrapreneurship is a key driver of such engagement, as it allows employees to tap into their entrepreneurial spirit and contribute meaningfully to the organization’s success.

For instance, tech giant Google encourages intrapreneurship through its famous ‘20% time’ policy, where employees are allowed to spend 20% of their time working on passion projects unrelated to their main job. This policy has led to the creation of some of Google’s most successful products, including Gmail and AdSense.

However, promoting intrapreneurship is not just about giving employees time and space to innovate. It also involves creating a supportive environment where failure is seen as a learning opportunity rather than a setback. As Thomas Edison famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.” This mindset is crucial for fostering intrapreneurship and retaining top talent.

Promoting intrapreneurship is a win-win strategy for both the organization and its employees. It not only drives innovation and business growth but also enhances employee satisfaction and retention.

“Business opportunities are like buses, there’s always another one coming.”

Richard Branson

By fostering intrapreneurship, companies can ensure that their employees are always ready to catch the next bus.

Strategy-9: Focusing on Flexibility

Flexibility in the workplace goes beyond just offering remote work options. It’s about respecting employees’ time and personal lives. It’s about understanding that employees have responsibilities outside of work and that rigid 9-to-5 schedules may not always be the best fit.

Companies that offer flexible work hours, compressed work weeks, or results-oriented work environments are often more successful in retaining their employees. For instance, Netflix’s culture of “freedom and responsibility” gives employees the flexibility to decide when and where they work, as long as they meet their responsibilities.

However, flexibility should not be an excuse for overwork. As Elon Musk once said, “Work like hell. I mean you just have to put in 80-to-100-hour weeks every week. This improves the odds of success.” While Musk’s work ethic has been instrumental in his success, it’s not a sustainable model for everyone. Companies need to ensure that flexibility doesn’t translate into an expectation of being ‘always on’.

Moreover, flexibility should be accompanied by smart use of technology. It’s counterproductive if employees are called to the office only to spend their time on video calls with colleagues sitting in the same building. Such practices reflect a lack of trust and an inability to leverage technology effectively. As rightly pointed out, “With the ethics of a roadside stall, you cannot build a Fortune 500 company.”

Prioritizing hybrid and remote options and focusing on flexibility are not just employee retention strategies but also ways to build a more inclusive, trusting, and efficient workplace.

Strategy-10: Prioritizing Hybrid and Remote Options

The COVID-19 pandemic has drastically changed the way we work, pushing many companies to adopt remote and hybrid work models. This shift has not only been a necessity but also a preference for many employees. A 2022 ADP survey found that 64% of Americans would consider looking for a new job if required to return to the office full-time.

Companies like Twitter and Shopify have set the trend by allowing their employees to work from home indefinitely. These companies understand that offering flexibility in where and how work gets done is a key factor in retaining top talent. However, this doesn’t mean that all work should be done remotely. There’s still value in face-to-face interactions, and some roles require a physical presence. The key is to find the right balance and offer flexibility where it’s feasible and beneficial.

Strategy-11: Supporting Employee Wellbeing

In the modern workplace, the wellbeing of employees extends beyond just physical health. It encompasses mental and emotional health, financial security, and even social connections. Companies that prioritize employee wellbeing often see higher levels of engagement, productivity, and, ultimately, retention.

For instance, LinkedIn has implemented mental health days for all employees to combat burnout. This collective time off allows employees to recharge without the fear of missing important emails or meetings.

Moreover, companies like Google provide comprehensive wellness programs that include fitness reimbursements, mental health resources, and onsite wellness and healthcare services. These initiatives not only support employee wellbeing but also signal to employees that their health and happiness are valued by the company.

However, supporting employee wellbeing doesn’t always require a large budget. Small businesses can offer flexible work schedules to reduce stress, provide resources for mental health, or even organize regular team-building activities to foster social connections.

Remember the old saying, “laughter is the best medicine”? Well, it turns out it’s true. A study by the American Psychological Association found that humor can significantly reduce stress and enhance job performance. So, don’t be afraid to inject a bit of fun and humor into the workplace. After all, a happy employee is a productive employee!

Strategy-12: Fostering Team Building

Team building is not just about trust falls and weekend retreats. It’s about creating a work environment where employees feel connected, valued, and part of something bigger than themselves.

Consider the example of Atlassian, an Australian software company. They have a unique approach to team building where they allow their teams to self-organize and choose their own work. This not only fosters a sense of ownership and accountability but also strengthens the bonds between team members.

Another example is Zappos, which is famous for its unique corporate culture. They have a tradition called “Zapponian Recess” where employees take a break from work to play games and participate in fun activities. This not only helps to relieve stress but also encourages employees to interact with each other in a non-work setting, thereby strengthening team cohesion.

However, team building is not a one-size-fits-all approach. What works for one team may not work for another. Therefore, it’s important to understand the dynamics of your team and tailor your team-building efforts accordingly.

For instance, if your team is remote, you might consider virtual team-building activities like online game nights or virtual coffee breaks. If your team is co-located, you might organize regular team lunches or after-work social events.

Remember, the goal of team building is to foster a sense of camaraderie and mutual respect among team members. When employees feel connected to their team, they are more likely to be engaged, productive, and loyal to the company.

And now, let’s lighten the mood with a little humor. Why don’t scientists trust atoms? Because they make up everything!

Strategy-13: Make them Growth Partners

In the modern business landscape, employees are no longer just workers but partners in the company’s growth. This concept is not just fancy HR jargon but a strategic move that has proven to be one of the most effective employee retention strategies.

When employees feel they are part of the company’s growth story, they are likelier to stay and contribute their best. This sense of ownership and partnership can be fostered in several ways.

One of the most effective ways is offering employees a stake in the company’s success through stock options or profit-sharing plans. For instance, tech giants like Google and Facebook have been known to offer their employees stock options, which serve as compensation and give employees a sense of ownership in the company. This strategy has been instrumental in attracting and retaining top talent in these companies.

Making employees grow partners is not just about financial incentives or decision-making power. It’s also about creating a culture where employees’ ideas are valued, their achievements are recognized, and their growth is nurtured.

Making employees growth partners is about creating a win-win situation where both the company and the employees grow together. It’s about fostering a sense of ownership, valuing employees’ contributions, and creating a culture of growth and development. When employees feel they are partners in the company’s growth, they are likelier to stay, contribute their best, and help the company succeed.

Strategy-14: Recognizing Employees’ Contributions

Recognition is a powerful motivator. Employees who feel their efforts are noticed and appreciated are likelier to stay engaged and committed to their work.

“There are two things people want more than sex and money: recognition and praise.”

Mary Kay Ash, founder of Mary Kay Cosmetics

Recognition can take many forms, from a simple “thank you” to more formal programs like Employee of the Month or annual awards. It’s not just about acknowledging the big wins; it’s also about appreciating the small victories that often go unnoticed. As per a Robert Half survey, even acknowledging big and small milestones can be a meaningful and memorable moment for everyone.

For instance, Google’s peer recognition program, “gThanks”, allows employees to publicly acknowledge their colleagues for their contributions. This not only fosters a culture of appreciation but also encourages positive behaviour.

However, recognition should be genuine and specific. Instead of a generic “good job”, highlight what the Employee did well and how it contributed to the team or company’s success. This makes the praise more meaningful and reinforces the behaviours and actions you want to see more of.

Moreover, recognition should be timely. Don’t wait for an annual review to give praise; do it as soon as you notice the commendable effort or achievement. Timely recognition reinforces positive behavior immediately and makes the Employee feel valued.

Remember, recognition doesn’t always have to be top-down. Encourage peer-to-peer recognition to foster a culture of appreciation throughout the organization. When employees know their peers value their work, it can boost morale and foster a supportive work environment.

Recognizing employees’ contributions is a simple, cost-effective strategy that can significantly impact employee retention. As William James, the father of psychology, once said, “The deepest principle in human nature is the craving to be appreciated.” By recognizing your employees’ efforts, you are satisfying this deep-seated need and fostering a work environment that people are happy to be a part of.

Strategy-15: Taking Regular Feedbacks

In the corporate world, feedback is the breakfast of champions. It’s a two-way street that fosters communication, identifies areas of improvement, and encourages growth.

“We all need people who will give us feedback. That’s how we improve.”

Bill Gates

In the context of employee retention, regular feedback is not just a tool for improvement, but a platform for employees to voice their thoughts, concerns, and suggestions. It’s about creating an environment where employees feel heard and valued.

For instance, Google’s annual employee survey, known as Googlegeist, is a testament to the value the tech giant places on employee feedback. The survey covers a wide range of topics, from work-life balance to job satisfaction, and the results are used to shape company policies and initiatives.

However, feedback should not be a one-time, annual event. It should be a continuous process that is integrated into the company’s culture. Regular team meetings, one-on-one sessions, and digital platforms for anonymous feedback can all be part of this process.

Tips to make feedback more effective:

1. Make it a Dialogue: Feedback should not be a one-way street. Encourage employees to share their thoughts and ideas.
2. Be Specific: General feedback can be unhelpful. Be specific about what the employee does well and where they can improve.
3. Focus on the Positive: While constructive criticism is important, don’t forget to highlight the good. Recognition for a job well done can boost morale and motivation.
4. Provide Actionable Suggestions: Feedback should lead to action. Provide clear, concrete steps that the employee can take to improve.
5. Follow Up: Feedback is not a one-and-done deal. Regular follow-ups can ensure that the feedback is being acted upon and that the employee feels supported in their growth journey.

Remember, feedback is not just about pointing out flaws. It’s about acknowledging achievements, fostering dialogue, and promoting growth. It’s about turning feedback into feedforward.

“Feedback is the breakfast of champions.”

Ken Blanchard

So, serve it regularly, and your employees will not only grow but also feel valued and engaged, thereby increasing their likelihood to stay. It’s not just about retaining employees, but about nurturing a culture of continuous learning and improvement. After all, a company that listens is a company that cares. And who wouldn’t want to be a part of such an organization?

Strategy-16: Fairness, Justice, and Transparency

In the corporate world, fairness, justice, and transparency are not just buzzwords; they are the foundation of a healthy and productive work environment. Employees who perceive that their organization is fair and just are more likely to be satisfied, committed, and engaged.

As Robert Half suggests, understanding what drives employee job satisfaction is crucial for retention. One of the key drivers is the perception of fairness and justice in the workplace. This includes fair treatment, equal opportunities, and transparency in decision-making processes.

Fair Treatment

Fair treatment means that all employees are treated with respect and dignity regardless of their role, background, or status. It ensures all employees have equal access to resources, opportunities, and benefits. It also means that employees are not discriminated against or harassed.

Equal Opportunities

Equal opportunities mean all employees have the same chances to grow and advance in their careers. This involves providing equal access to training, development opportunities, and promotions. It also means that hiring, promotion, and compensation decisions are based on merit, not on irrelevant factors like age, gender, race, or personal relationships.

Transparency in Decision-Making Processes

Transparency in decision-making processes means that decisions are made openly and clearly. This involves communicating the reasons behind decisions, providing feedback, and allowing employees to voice their opinions and concerns. Transparency builds trust, reduces uncertainty, and promotes a sense of ownership and commitment among employees.

In the words of Richard Branson, “Transparency breeds trust, and trust is the foundation of great teamwork.”

However, achieving fairness, justice, and transparency is not a one-time effort. It requires ongoing commitment, regular feedback, and continuous improvement. It also requires leaders to model these values in their behaviour and decisions. As the saying goes, “Actions speak louder than words.” By demonstrating fairness, justice, and transparency in their actions, leaders can inspire their employees to do the same.

Strategy-17: Access to Leadership

In the corporate world, the phrase “management by walking around” has been coined to describe the practice of leaders making themselves accessible and visible to their employees. This approach, which involves leaders regularly interacting with employees in their work environment, can significantly impact employee retention.

Consider the example of Elon Musk, CEO of Tesla and SpaceX. Despite his high-profile status and busy schedule, Musk is known for his hands-on leadership style. He often spends time on the factory floor, working alongside his employees, and even reportedly sleeps at the factory when necessary. This level of commitment and accessibility motivates employees and makes them feel valued and heard.

Similarly, Ratan Tata, the former chairman of Tata Group, is known for his open-door policy. He often interacted with employees at all levels, fostering a sense of unity and mutual respect within the organization.

In the modern corporate landscape, where remote and hybrid work models are becoming increasingly common, maintaining this level of accessibility can be challenging. However, regardless of physical location, technology has enabled leaders to stay connected with their teams. Regular virtual meetings, town halls, and one-on-one check-ins can help bridge the gap, ensuring employees feel seen and heard.

Moreover, leaders should not just be accessible but also receptive to feedback and ideas from their teams. The “open innovation” concept encourages employees to contribute their ideas and solutions, fostering a sense of ownership and engagement. This approach can be particularly effective in retaining top talent, as it allows employees to feel that their contributions are valued and that they have a stake in the company’s success.

Access to leadership is not just about physical proximity or availability. It’s about creating an environment where employees feel comfortable expressing their ideas, knowing they will be heard and valued. This approach can significantly enhance employee retention, fostering a sense of belonging and recognition within the organization.

Strategy-18: Protection from Corporate Politics

In the corporate world, politics is as inevitable as change. However, it’s the responsibility of the leadership to ensure that it doesn’t become a toxic element that hampers employee retention.

“Office politics is like a dark shadow that lurks in the corners, unseen but felt by all. It’s a game that’s unavoidable but manageable,”

Adam Grant, an organizational psychologist at Wharton

A healthy work environment is one where employees are judged on their merit, not their ability to play the political game. It’s a place where backstabbing, favouritism, and power plays should have no room.

For instance, Google’s culture is famously based on a flat organizational structure that minimizes bureaucracy and politics. This structure encourages open communication and allows ideas to be judged on merit rather than the rank of the person proposing them.

However, not every company can adopt Google’s model. So, what can they do? Here are a few suggestions:

1. Promote Transparency: Make sure that decisions, especially those affecting employees, are made transparently. This reduces the chances of rumours and misinformation, which are the breeding ground for politics.
2. Encourage Open Communication: Create a culture where employees feel comfortable voicing their opinions or concerns without fear of retribution.
3. Fair Evaluation: Implement a fair evaluation system where employees are judged based on their work, not their relationships with management.
4. Lead by Example: The leadership should set the tone by staying above office politics and treating every employee fairly and respectfully.
5. Conflict Resolution: Have a robust conflict resolution mechanism in place. This will ensure that conflicts are resolved fairly and timely, preventing them from escalating into political battles.

Remember, a workplace free of negative politics is not just an ideal to strive for; retaining your best talent is necessary.

“People are not just employees but are the very heart of an organization. They should be protected from the shadows of politics so they can shine in the light of their work.”

Ratan Tata

Strategy-19: Freedom to Innovate and Make Mistakes

In the corporate jungle, innovation is the king, and mistakes are the stepping stones to his throne. As the old saying goes, “Those who don’t work don’t make mistakes.” This is a testament to the fact that mistakes are integral to the innovation process.

A company that fosters an environment where employees can experiment, take risks, and learn from their mistakes is more likely to stay ahead of the curve and maintain a competitive edge and easily retain high skilled talent.

A study by Chandler and Krajcsák (2021) found that not every corporate culture is suitable for such intrapreneurial behaviour. They identified four principal components of enterprising behaviour:

• Planning on results (project manager)
• Bearing the burden (pressure bearer)
• Innovating for others (innovating showstopper)
• Learning from mistakes (experimental learner)

The study concluded that an organization’s existing culture could inhibit or encourage these enterprising behaviours, which can have significant implications for recruitment, selection, staff turnover, and innovation potential.

In the words of Thomas J. Watson, the founder of IBM, “The fastest way to succeed is to double your failure rate.” Through trial and error, we learn, grow, and eventually succeed.

Companies like Google have embraced this philosophy with their “20% time” policy, allowing employees to spend 20% of their work time on passionate projects, even if it’s not their primary job role. This policy has created some of Google’s most successful products, including Gmail and Google Maps.

However, it’s important to note that the freedom to innovate and make mistakes should not be mistaken for lack of accountability. Employees should be inspired to take calculated risks and be given the space to learn from their mistakes, but they should also be held accountable for their actions. This balance is crucial for fostering a culture of innovation without compromising responsibility and accountability.

The freedom to innovate and make mistakes is not just about allowing employees to take risks and learn from their failures. It’s about creating an atmosphere where employees feel valued, trusted, and empowered to contribute their ideas and skills to the company’s betterment.

It’s about recognizing that clean hands and records often mean that the person is a non-initiator, has no proactiveness, doesn’t try to innovate, and has zero appetite for risk. On the other hand, those with the courage to get their hands dirty, take risks, and learn from their mistakes often drive change and propel the company forward.

Strategy-20: HR to be more than “Labor Contractor” in Disguised Form

The Human Resources (HR) department in any organization plays a crucial role in employee retention. However, it’s essential that HR is perceived as more than just a “labor contractor” in a disguised form. HR should be seen as a strategic partner, a facilitator, and a bridge between the management and the employees.

In many organizations, HR is often seen as a department that merely handles administrative tasks such as hiring, firing, and payroll. But in reality, HR has a much more significant role to play. They are the custodians of the company’s culture, the facilitators of employee engagement, and the drivers of employee development and retention.

A study by Robert Half suggests that HR departments that focus on employee satisfaction and engagement are more successful in retaining talent. The study highlights that HR should be involved in strategic decision-making processes and should have a clear understanding of the company’s vision and goals. This enables them to align the workforce with the company’s objectives and create a conducive work environment that promotes growth and retention.

HR departments need to ensure that they are not just filling positions but are also investing in the right talent. They should focus on hiring employees who are not only skilled but also align with the company’s culture and values. This requires a shift from traditional hiring practices to more strategic talent acquisition strategies.

Moreover, HR should also focus on developing and implementing effective employee retention strategies. This includes creating a positive work environment, providing opportunities for growth and development, recognizing and rewarding employee contributions, and ensuring fair and transparent practices.

Strategy-21: Defined Hierarchies and Organization Structure

In the corporate world, the term “hierarchy” often brings to mind a pyramid-like structure where power and authority trickle down from the top. However, in recent years, some organizations have experimented with flat hierarchies, where all employees are considered equal, and there are few or no levels of middle management. While this approach may seem appealing on paper, it can lead to several challenges in practice.

Flat hierarchies can create ambiguity about roles and responsibilities. When everyone is equal, it can be unclear who is responsible for making decisions, leading teams, and driving initiatives forward. This lack of clarity can lead to confusion, inefficiency, and frustration among employees.

Moreover, flat hierarchies can inadvertently discourage high-performing employees. If all employees are treated as equals regardless of their performance or contribution, high performers may feel undervalued and unappreciated. This can demotivate them and prompt them to seek opportunities elsewhere where their skills and efforts are recognized and rewarded.

As I always emphasize, power and responsibility are fundamental aspects of management. When you ask someone to take responsibility but don’t give them the power to get things done, you create a challenging situation. This is where defined hierarchies and organization structures come into play.

Defined hierarchies provide a clear structure for decision-making and accountability. They delineate roles and responsibilities, ensuring that everyone knows who is in charge of what. This clarity can enhance efficiency, productivity, and employee satisfaction.

Moreover, defined hierarchies do not necessarily mean rigid, top-down structures. They can be flexible and adaptable, allowing for delegation of authority, empowerment of employees, and open communication. The key is to strike a balance between providing structure and promoting autonomy and innovation.

In the words of Jack Welch, former CEO of General Electric, “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.” A well-defined hierarchy can facilitate this learning and action by providing a clear framework for decision-making, communication, and accountability.