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Employee Retention Strategies to Keep Your Talent

High turnover disrupts morale, culture, and productivity, costing organizations greatly. Learn how to boost retention with strategies like tailored mental health benefits, recognition programs, and work-life balance initiatives. Build a thriving workplace that supports well-being and retains top talent.

Employee retention is crucial to maintaining organizational performance. The ever-changing landscape of employee needs can be challenging to keep up with, so it's essential to understand how to address the issues your employees face in the workplace. Without taking the time to learn why employees are dissatisfied, your retention efforts could fall flat and leave you facing the business costs of employee burnout

To avoid those steep costs, companies will need to invest in mental health and discover how benefits play a role in employees staying long term. With this in mind, we've gathered effective employee retention strategies to help you keep your best talent and reduce organizational costs. But first, let’s explore what causes employees to quit and the impacts of high turnover.

Employees Are Willing to Leave Without Having a New Role

When it comes to leaving an unsatisfactory job, employees aren't willing to wait. A recent study reveals that 68% of employees who recently quit their jobs did so without having an offer from another company. These employees were willing to use side jobs and dip into emergency savings while they searched for a better opportunity. When respondents were asked why they quit, the number one reason was a toxic culture. 

The quality of an organization’s mental well-being benefits also plays a prominent role in whether an employee stays or leaves, according to a study conducted by Modern Health and Forrester. When surveyed, 73% of employees and 81% of managers indicated they would be more likely to stay at a company that offered high-quality mental health resources.

This indicates that employee well-being is centered around mental well-being, and employees are willing to switch jobs to protect their needs.

Discover the actual ROI of implementing quality mental health benefits in this comprehensive guide.

Impacts of High Turnover

Employee turnover is the rate at which employees leave their jobs and are replaced by new employees. When companies experience high employee turnover, the organization is affected in many ways. High turnover can impact productivity and morale, resulting in additional business costs.

The most common impacts of high turnover include:

  • Financial impacts
  • Lower employee morale
  • Fractured company culture
  • Diminished customer experience and satisfaction

Let’s explore each of these problems further.

1. Financial Impacts

Employers pay an estimated average of six to nine months’ salary to replace an employee who leaves. Recruitment, hiring, onboarding, and training make up a significant portion of these costs. Yet they fail to include the financial impact of the employee who left. The costs of losing a fully trained employee include the loss of company knowledge, money spent on training, and the potential income the employee could have gained for the company in the future.

Download “The Mental Health ROI Guide: Part II” to learn how to cut costs for your organization with comprehensive mental health care.

2. Lower Employee Morale

High turnover has a negative impact on the remaining employees’ enthusiasm and attitudes. When employees leave within a short period, the rest of the team is often left responsible for a heavier workload. Additionally, the loss of familiar employees means the loss of friends and a potential reduction in effective collaboration. Such impacts can lead to increased stress and lower morale.

3. Fractured Company Culture

A healthy company culture comes from a sense of belonging. High turnover can impact belonging as new employees mean a constantly changing culture. When employees leave, team dynamics shift and other employees wonder if they should leave the company, too.

4. Diminished Customer Experience and Satisfaction

Long-term employees bring company knowledge and a wealth of experience serving customers in their role. New employees with less experience can be less effective when it comes to meeting the needs of customers. When this occurs frequently, customers are more likely to go elsewhere.

Now that we’ve examined the negative effects of high turnover, let’s look at strategies companies can use to reverse this troubling trend.

First, Understand Why Employees Are Leaving

All too often, when companies experience high turnover, employers fail to understand why employees leave. As a result, proposed solutions fail to improve the situation. 

Before implementing changes, we recommend devising a process to understand the root of the issues causing employees to quit. This can be accomplished through exit interviews that ask poignant questions about their experience as an employee. The interview should include questions about:

  • The employee experience (e.g., work processes, employer-provided resources, communication, deadlines, etc.)
  • How employees experience and view leadership
  • How they felt about the benefits offered
  • What they think about advancement opportunities within the company

Their responses on these topics can provide valuable insight into the benefits that can improve employee retention in the future.

Next, Define and Create Strategies to Retain Your Employees

High turnover is a direct result of work dissatisfaction. The data from your exit surveys can help you clearly understand why your employees are leaving and improve your employee retention strategies. Begin with an honest introspection of how employee needs are met within your organization and research cost-effective ways to meet those needs.

The popular retention strategies below address many of the pain points experienced by employees.

Establish or Enhance Wellness and Mental Health Programs

All too often, companies create definitions for wellness and mental health programs that are too vague and fail to offer the services employees need. Helping your employees stay fit mentally, financially, and physically and avoid burnout is great, but what does it actually mean?

Modern employees need care that goes deeper than the surface level. To meet those needs, create a specific program that offers valuable benefits beyond rec rooms and happy hours. Also, be sure to set measurable benchmarks that will help you gauge the efficacy of your mental health benefits and efforts.

To create a program that truly makes an impact, ask yourself the following questions:

  • What perception do our leaders and employees have of mental health?
    Prioritize the well-being of your staff, including mental well-being, by working towards destigmatizing mental health in the workplace. 
  • What do our current mental health offerings lack?
    Examine your mental health care benefits. What is included, and what's missing? Is it supporting the holistic well-being of your employees?
  • What other stressors impact our employees’ well-being?
    Consider mental health benefits from a standpoint that recognizes well-being is affected by more than workloads and direct job stress. Employees bring their whole selves to work, including stressors from being a parent or caring for an elderly or sick loved one. Consider how dependent care coverage (daycare), caretaker stipends, flexible work hours, and maternity and paternity policies can work to reduce such stressors for employees. 
  • Do employees feel like they belong here?
    Cultivate a sense of belonging and psychological safety in the workplace with benefits, communications, policies, and culturally centered care that supports acceptance of people from all backgrounds, races, and cultures.

In this on-demand webinar from Elevate 2024, impact.com CPO Michelle Denman and Modern Health CPO Maureen Calabrese discuss how to evaluate mental health benefits solutions.

Boost Employee Engagement by Giving Them a Reason

A shocking 77% of global employees are not engaged or are actively disengaged at work. Disengagement goes beyond poor productivity — it signals that an employee isn’t present or invested in their employer’s vision.

Engagement isn't a one-sided responsibility of employees. It's about building reciprocity through policies, communication, and a feeling that employees receive the same return and acknowledgments for their investment.

Here are a few hallmarks of true employee engagement:

  • Employees feel heard. For employees to be engaged, they need to know their ideas and opinions matter. 
  • They feel safe to speak and act. An engaging workplace culture allows employees to dissent. It provides employees with an environment that encourages them to be curious, take risks, and express their ideas and views without negative consequences.
  • They get helpful feedback from leaders. Creating a feedback culture can help employees feel heard and valued. One way to do this is by giving feedback that focuses on growth rather than just advice on how an employee can improve. This type of feedback can help to motivate and encourage employees, as it shows that you are invested in their development.
  • They offer feedback of their own. Completing the feedback loop by accepting employee feedback through pulse surveys is also important. This will give you a better understanding of employees’ engagement level and areas that need improvement. By creating a feedback culture, you can create a more productive and positive workplace.

Give Your Employees the Recognition They Deserve

Employees who feel appreciated and recognized stay longer in their jobs. Studies show that when employee recognition hits the mark, employees are:

  • Less likely to leave: 5x as likely to see a path to grow in the organization
  • More satisfied: 44% more likely to be "thriving" in their life overall
  • More productive: 73% less likely to "always" or "very often" feel burned out
  • More engaged: 4x as likely to be actively engaged at work
  • More connected: 5x as likely to feel connected to their workplace culture

Creating a culture of recognition in your company is a great way to improve employee retention. Benefits like monetary compensation in the form of bonuses and raises or social compensation like verbal recognition and employee celebrations can go a long way toward showing employees they are appreciated. 

Allow Your Employees to Have a Healthy Work-Life Balance

When your team is well rested and has options to help them avoid personal stressors, they will perform much better at work. To achieve this, consider the suggestions below.

Establish Worktime Boundaries

Set up policies for overtime and working on weekends, and stick to them. Even minor exceptions can lead to a slippery slope that can lead to employees feeling overworked and overwhelmed.

Consider Flexible Work Schedules

Hybrid or remote policies that offer flexible hours allow employees to take care of their responsibilities without losing work hours. As much as 66% of hybrid employees say their mental health has improved due to a hybrid work schedule.

Actively Encourage Employees to Protect Their Mental Well-Being

Demonstrate your commitment to employees’ mental health through policies that clarify your intentions and prove that it's not just talk. For example, instead of simply encouraging employees to take a long lunch break, shut the office down from 12 p.m. to 1:30 p.m. for lunch.

Find out why 90% of RSM employees say their well-being has improved after using the company’s mental health benefits through Modern Health.

Create a Clear Path to Growth

Multiple studies have outlined the connection between career development and employee performance, engagement, and retention. After all, employee development and achievement are important parts of feeling accomplished in one's role. Not to mention, employees who know they're making a valuable contribution to the company can develop a greater sense of belonging. 

Ultimately, when employees have a clear path to growth within a company, they’re more likely to stay. You can offer employees a stronger sense of career development by:

  • Giving them a clear picture of where they stand within the organization and how they can be promoted in the future
  • Defining how they can be elevated within the organization and specific steps for advancement
  • Offering ways to grow within current roles (e.g., increased responsibilities with corresponding compensation)

Build a Community

Most people want to have a sense of belonging in the workplace. A role at work is more than a function; it's a connection with a team in which each employee makes a valuable contribution. Build a sense of community within your organization that encourages employees to share similar experiences and support one another.

Such efforts don't have to be complicated. Consider how the simple actions below can have a tremendous impact.

  • Create co-worker socialization by hosting team movie nights, creating spaces for employees to express themselves, allowing for curiosity and innovation, one-on-one coffee times that pair employees across teams, or afternoon picnics during work hours
  • Ensure leadership talks about the company vision regularly, reminding employees about their contribution
  • Create values based on collective intelligence
  • Allow for strengths to be lifted to greater heights rather than only focusing on weaknesses
  • Build a culture of appreciation that lets employees know how their contributions matter

In this quick video, impact.com CPO Michelle Denman discusses how loneliness can affect employee well-being — and how mental health resources in the workplace can help.

Establishing effective employee retention strategies requires you to learn about all aspects of employee well-being in the workplace — including accessible mental health care. To learn more about how employee mental health benefits drive workforce stability, download our research paper on employee retention.

download our research paper on Employee Retention
Modern Health

Modern Health is the comprehensive mental wellness platform that combines the WHO well-being assessment, self-service wellness kits, an international network of certified coaches, and licensed therapists available in 35 languages all in a single app. Modern Health empowers employers to lead the charge in acknowledging that mental health is just as important as physical health, de-stigmatizing the conversation, and increasing accessibility of mental health services for all.