8 Employee Retention Strategies That Work in 2024

Do you suffer from a revolving door of talent? You swing open the door to a batch of new recruits only to find others heading for the exit? 

Employee retention is your organization’s ability to retain your best workers for the long term. By tracking your employee retention rate, you can measure the effectiveness of your efforts to retain talent. The higher the retention rate, the better it is for your company’s bottom line.

But how do you ensure your employees stick around for years to come? This guide digs into the reasons for high turnover and suggests effective employee retention strategies to keep your workers.  

What are the benefits of low turnover?

People come and go in business—it’s normal for companies to experience some level of turnover. Yet, organizations that keep their retention rates under control can enjoy the following advantages: 

Better team productivity 

Constantly departing team members cause chaos and disruption for anyone who remains. Time-to-fill rates are long in recruitment, with LinkedIn highlighting that 42 days is the median time to recruit a replacement, extending to 49 days for industries like engineering. 

During this time, existing employees prep for people leaving, conduct interviews, or train new team members to take on additional responsibilities. There’s little wonder that overall productivity can be impacted, not least by rising cases of employee burnout—a condition experienced by 65% of people, with 72% of these believing it has affected their performance. 

Higher employee satisfaction 

A wave of departures in your organization can impact employee morale and cause those remaining to wonder if the grass could be greener for them, too. Exiting team members are highly likely to air their grievances publicly—from tales of toxic management to internal conflict with their peers. 

Retaining engaged and happy people in your organization keeps these negative and triggering conversations at bay, focusing instead on internal success and opportunities. 

Reduced staffing costs 

Low turnover is good for your bottom line. Along with keeping productivity levels high, you’ll also avoid the costs of turnover and hiring new staff. SHRM data reveals that the average cost per hire is $4,700, but some companies spend 3-4x a person’s annual salary on recruitment. A focus on high retention means you won’t shell out for: 

• Advertising: Costs associated with posting job openings on various job boards, using premium features of social media platforms, or industry-specific sites.
• Recruitment agencies: Fees can range from a percentage of the hired employee’s annual salary to flat rates for their services.
• Employee referral bonuses: Costs for incentive programs that reward current employees for referring successful new hires.
• Background checks: Expenses related to pre-employment screening processes.
• Interviewing costs: Includes travel and accommodation expenses for candidates, if applicable, and the cost of time spent by staff members involved in the interview process.
• Relocation expenses: Companies may offer relocation packages to cover moving expenses for the new employee.
• Training and onboarding: Costs associated with training programs, orientation, and other resources needed to get a new employee up to speed.
• Administrative costs: Includes time spent on processing new hire paperwork, setting up payroll, and other onboarding tasks. 

Retained institutional knowledge  

Employees with long tenure have a wealth of knowledge about your workflows, processes, products, and services. This vital information dilutes or disappears entirely when people depart the organization. Retaining your highly skilled professionals enables them to pass on institutional know-how to others through mentoring arrangements or succession planning programs. 

What causes high employee turnover?

Understanding the reasons for high turnover is a good starting point for turning the situation around. Commonly, we can expect the following issues to send your employees toward the exit: 

• Low employee job satisfaction 
• Poor compensation and benefits 
• Not feeling recognized or appreciated 
• Lack of organizational transparency 
• No flexible work arrangements
• Concerns about the company’s future or financial health 
• No career development opportunities

8 retention strategies to combat turnover

If you suspect any of the above as a reason for your high turnover, consider the following strategies to offer a more attractive outlook for your workforce: 

1. Offer competitive pay 

Employee retention statistics suggest that 41% of people actively seek a new job in 2024, and 24% may be open to a change. Increased compensation is the top reason people are job hunting as employees struggle with the cost of living. According to the Achievers 2024 Engagement and Retention Report, employees who can’t afford to pay their bills are 39% more likely to look for a new role, which is twice as many as those who can live comfortably on their salary. 

Companies that want to retain employees must stay focused on offering their employees a competitive salary in the market. Consider using industry benchmarking data to understand if you’re offering current and prospective employees an attractive salary. Remember to regularly review and adjust salaries as needed based on market trends.

2. Provide clear career advancement opportunities

Career progression is the second most popular reason for employees to leave their roles, according to Achievers, with 24% of people choosing this as their priority. When employees can’t see a clear future at their company, naturally, they’ll be tempted by juicier opportunities elsewhere. Speaking on the HR Leaders podcast, Erica Keswin, author of “Retention Revolution,” explains how the corporate culture has moved away from ladders toward lily pads. 

“Gone are the days everybody is going to just go up one rung in the ladder and then 50 years later, you’re going to retire with a plaque and a pension. Within an organization, if you don’t create an ecosystem for growth and help people grow up, down, and sideways, they will hop on over to another company.”

Employees need to believe and visualize that career opportunities are real and attainable to them. Some ways to communicate different progression options include: 

• Sharing and celebrating internal mobility and promotion stories at team meetings, in company-wide emails or newsletters, and using internal communication channels like Slack. 
• Create clear career paths throughout your org chart, using a competency framework to highlight how an employee could move from an entry-level to a C-suite position and the skills and competencies required to move from A to B. 
• Implement clear guidelines on how promotions and raises work, which may include a specified length of time in their current position, performance milestones, or other qualifications.

3. Select enticing employee benefits 

Employee benefits are essential to your total rewards model, complementing your workers’ salaries with additional monetary and non-monetary perks and employee retention benefits. 

Some benefits, like health insurance, are mandatory, while other perks are optional, allowing you to get truly creative with your benefits package design. One of the most attractive ways to improve your benefits package is to give your employees the power to choose what they want. For example, using a lifestyle spending account, employers fund the account each month, and employees spend the money on the lifestyle categories that best suit their circumstances, including: 

• Wellness 
• Professional development 
• Food and nutrition 
• Family and childcare 
• Mental health 

‍Tip: Review our 2024 Benepass Benefits Benchmarking Guide to understand how your current benefits offering compares to your competitors. This provides detailed breakdowns of benefits trends according to company size and industry. 

4. Recognize employees early and often 

Appreciating your employees’ contributions to your organization is a simple way to maintain their interest and loyalty. Nectar’s recognition statistics highlight that 71% of employees would be less likely to leave their organization if they were recognized more frequently. This means finding a way to acknowledge your employees’ behaviors, activities, and accomplishments, perhaps choosing one of the following recognition vehicles: 

• Regular check-ins with managers and company leaders as a setting to deliver praise to direct reports 
• Providing shoutouts in town halls and team meetings 
• Creating recognition awards, such as Employee of the Month, with a structured nomination process 
• Introducing a formal peer recognition program where employees exchange praise, points, or other tokens of appreciation
• Bolstering praise with relevant rewards for your employees such as gift cards, cash, or personalized gifts 

5. Proactively invite employee feedback and input 

Employees need to feel like they have a voice in your organization to suggest innovative ideas or raise serious concerns. Google’s 2018 walkouts are a great example of employees coming together in protest because they didn’t feel heard. The tech giant’s employees staged walkouts across numerous global offices to speak out against sexual harassment, racism, and gender inequality. To avoid such events and create a psychologically safe space where your employees feel comfortable providing their feedback, consider some of the following options:  

• Create employee resource groups for women, underrepresented groups, working parents, and more to enable your workers to advocate for themselves. 
• Set up regular feedback loops, using mechanisms like employee surveys to take the pulse of your employees and enable them to suggest company improvements.
• Train managers and leaders on how to actively listen and respond constructively to employee feedback. 
• Foster a culture of transparency, where employees are informed about business decisions and have access to information that affects their work. 
• Act on feedback and communicate the changes made as a result of employee input. If you cannot address specific requests or feedback, explain that you’ve considered their input but must take an alternative route. 

6. Embrace flexible work arrangements 

Although some companies are mandating return-to-office policies this year, flexible work arrangements aren’t going out of fashion. According to FlexJobs, 63% of employees are willing to take a pay cut to work remotely—17% would lose up to 20% from their salary, while 1 in 10 would slash more than 20% to remain in their home offices.  

Plenty of employers in the market offer flexible working arrangements, and some employers like Buffer and Toggl are remote-first. Prevent your employees from hopping over to a more flexible competitor by: 

• Creating a hybrid working model where employees can choose to work in the office or from home according to their preferences and job responsibilities 
• Granting flexible schedules where employees are assessed on output rather than office hours 
• Providing supportive technology, like video conferencing solutions and project management tools, so remote employees can collaborate seamlessly with their in-office colleagues
• Offering paid time off for mental health or personal days, so employees can take breaks when needed. 

A fantastic example of a leader who understands the value of flexible work arrangements is Lauren Howard, CoFounder and CEO of FMLA MD, who says: 

“My staff knows that they don’t have to ask to use their PTO. They tell me when they’re taking it. It’s not my time to dole out. It’s theirs. It always was. My job is to run a team that has the resources to function without one person for a reasonable amount of time. Give me a heads-up. We’ll make it work. I don’t need to know why you need the time. I don’t need to approve of your reasons for using PTO. I don’t need to verify that you’re sick enough to need sick time. Not my business. Go frolic through fields in the Alps or rage at a music festival. Go to your family reunion or your best friend’s wedding. Whatever, friend. It’s your time. Trusting employees to use their time as they see fit means they almost never leave you in a lurch.”  

7. Foster individual and team growth 

According to LinkedIn’s Workplace Learning Report of 2024, 90% of organizations are concerned about employee retention. Providing learning opportunities is the number one strategy to retain top talent, which could include:

• Offering leadership development programs 
• Providing access to online learning platforms for employees to upskill during their free time
• Conducting regular training sessions on topics like diversity and inclusion, mental health awareness, or navigating difficult conversations in the workplace 
• Encouraging mentorship opportunities for employees to learn from seasoned professionals within your organization 
• Setting up peer-to-peer learning sessions, where employees can share their knowledge in a casual setting 
• Offering tuition reimbursement for employees pursuing higher education or certifications related to their job 

8. Prioritize company culture 

93.5% of employees would stay at a company for five years if the culture is great, according to Nectar. A positive company culture can mean different things to different people but often focuses on the fabric of relationships within an organization and the values they embody. Erica Keswin explains why it’s vital to prioritize culture throughout the entire employee lifecycle: 

‍“People leaders need to be really intentional about how we onboard people and let them know our values and how we live them while they’re with us. We help them learn and develop up, down, and sideways, and when they come and tell us they’re leaving, which they probably will at some point, we need to figure out ways to stay connected.”

Retain your best employees by: 

• Setting clearly defined values and ensuring employees understand and embody them 
• Encouraging a healthy work-life balance by promoting self-care, recognizing burnout signs, and providing mental health resources
• Rewarding employees for their hard work through recognition programs or spot bonuses 
• Building relationships within teams and across departments through team-building activities
• Ensuring that you, as HR leaders and C-suite executives, are involved in the culture rather than existing above it
• Finding ways for your employees to influence culture, such as regular focus groups or surveys to gain their input, and then implementing their ideas 
• Designating culture ambassadors or building a culture committee that regularly meets to discuss ideas and initiatives for cultivating a positive company culture   

The IRS Retention Credit

The IRS Employee Retention Credit (ERC) was a tax credit introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The aim was to encourage businesses to retain their payrolled employees during the COVID-19 pandemic. To be eligible for the credit, businesses must have: 

• Been forced to fully or partially suspend their operations due to a government enforcement limiting commerce, travel, or group meetings during 2020 or Q1-Q3 in 2021. 
• Experienced a significant decline in gross receipts during 2020 or Q1-Q3 in 2021.
• Qualified as a recovery startup business for Q3 or Q4 in 2021. 

The deadline for claiming the ERC is April 15, 2024, for 2020 tax periods and April 15, 2025, for 2021 tax periods. Special education sessions are also available for businesses that may have claimed the credit in error, including information on voluntary disclosure or withdrawal programs. There is also an option for businesses to pay up to 80% of the claim back. 

Improve employee retention with a well-designed tech stack

Effective employee retention programs hinge on a positive employee experience, strong relationships, and an engaging company culture. Achieve these goals by adding some critical employee retention software into your tech stack, such as: 

CultureAmp 

CultureAmp is an employee experience platform focused on giving your organization a competitive advantage. Its features include:

• Employee engagement: Gain visibility into employee sentiment using employee surveys, retention insights, analytics, and benchmarking. 
• Performance management: Enable an effective feedback culture using 1:1s, goal tracking, 360 feedback, and performance reviews. 
• Employee development: Create top performers with a skills coach, career pathing, competency tracking, and key L&D data. 

Nectar 

Nectar is a rewards and recognition platform that helps employers create a culture their employees won’t want to leave. The software offers the following features: 

• Recognition: Peers, managers, and leaders give shoutouts and redeemable praise points to each other in a social feed. 
• Rewards: Employees exchange their points for various rewards such as gift cards, company swag, charity donations, Amazon products, or custom rewards. 
• Challenges: Employers set up points-based challenges for their employees with themes including wellness, development, compliance, and more. 
• Milestones: Employees receive celebratory messages on their birthdays and work anniversaries. 
• Awards: Employers can set up “Employee of the Month” awards or similar. 

Benepass  

Benepass is a people-first benefits administration platform that simplifies the management of your company’s benefits and perks. We offer a wide range of options to suit your employees at any stage of their personal or professional lives, including the following: 

• Pre-tax benefits like Health Savings Accounts, Flexible Spending Accounts, Health Reimbursement Arrangements, and Commuter Benefits
• Perks programs like Remote Working Accounts, Wellness, Food, Professional Development, Family & Childcare Benefits, Rewards and Recognition Programs, and Lifestyle Spending Accounts. 

Setting up your Benepass involves the following simple steps: 

1. You choose your benefit program and what qualifies under it (for example, if you’re offering an LSA, select lifestyle pillars such as mental health, wellness, professional development, etc.) 
2. We’ll code your unique policy into the Benepass platform and issue your Visa Benepass card as your benefits template. 
3. We’ll connect Benepass to your payroll system to automate enrollment. 
4. Your employees will elect their contributions (only applicable in pre-tax programs). 
5. You’ll join the Benepass platform and communicate your benefits program to your employees. 

Download our in-depth guide to setting up an LSA for best practices, customizable templates, and helpful tips to get you started with creating a flexible stipend.

Ready to retain your best employees with a compelling benefits package they won’t walk away from? See Benepass in action by arranging a free demo of our platform, or contact sales@getbenepass.com with any questions.