The best way to improve employee retention is to understand what employees want and need from the workplace and provide it. Companies must meet employee demands within limits, of course. Management can not just dish out indiscriminate amounts of money to employees or give them a four day work week in many cases. Yet surprisingly, many employee retention practices do not have to cost a cent.
Studies show that many employees leave for reasons that have nothing to do with money or benefits, but rather with issues such as feeling unappreciated or feeling they have a very limited chance for advancement. Other complaints include not enough honest feedback, the actual job does not match with what they were told in initial interviews, and/or there is a lack of challenge/learning/training. Employers can resolve these sorts of issues in cash-free ways to help increase their retention rates.
Promoting from within whenever possible often means greater employee retention. Moreover, many employees are better motivated to succeed in the firm if they feel they have a possibility of being promoted. Professional development of workers can easily be worked into managers' review processes. Professional development works best as a retention practice when the employee is involved in planning his or her growth plan.
The best employee retention practice of all may be to take the time to hire the right person for the job in the first place. But when employees do resign, conducting exit interviews can help in future retention. Employers find out useful information during exit interviews, allowing them to make changes that may retain other employees thinking of leaving for similar reasons.
Of course, some employees do leave simply because of low pay and/or a lack of benefits. However, companies can be competitive in these areas and still stay within budget constraints. Allow employees to choose between the benefits the company is considering. Staying competitive in wages is an excellent employee retention practice as it helps one get and keep the top employees in their fields. These employees are likely to stay if they would get less money in similar firms of the same size.