Employee Retention Strategies: How to Keep Top Performers

Worried about your retention strategy? You’re not alone! LinkedIn’s 2023 Workplace Learning Report shows 93% of businesses are concerned about retaining top performers.

To make matters worse, Gartner predicted a 24% turnover rate in 2022, which has sparked worry in the business sector. Think about the cost of hiring and replacing an employee in 2023:

• Society for Human Resource Management (SHRM) says the average cost per hire is nearly $4,700, and it costs somewhere between 90% and 200% of an employee’s annual salary to find a replacement.
• Employee benefits news says it costs 33% of a team member’s annual salary to replace them.
• The replacement cost for an employee earning a median income of $50,000 per year is $16,500.
• Gallup estimates that the cost of replacing an employee in the United States is 1.5 to 2 times their income.

With these stats in mind, the concern is understandable.

But by applying the best practices in this article, you can positively address your concerns and improve employee retention for your organization.

Employee retention best practices

There are many ways you can keep your top performers with these suggestions for better retention.

In a quest for greater insight, we contacted the following experts, who graciously shared real-life examples of how they bolster employee retention in their respective businesses.

• Bryan Clayton, CEO of GreenPal and Hubstaff customer 
• Janice Burns, Chief Transformation Officer at Degreed
• Shaunak Amin, Co-founder and CEO at SwagMagic
• Ryan McKenzie, the Co-Founder & CMO of Tru Earth

Build a strong foundation

Start by hiring the right people, providing thorough onboarding, and setting clear expectations.

Why? According to Gallup, 20% of employees indicate that their most recent onboarding experience was subpar. Even more concerning, some received no onboarding whatsoever.

On the other hand, when employees undergo outstanding onboarding experiences, a striking 70% of them express that they hold “the ideal job.” These individuals are 2.6 times more inclined to exhibit tremendous satisfaction with their work environment. This, of course, increases the likelihood that they’ll remain with the company.

The key to improving employee retention starts with hiring the right people and delivering exceptional onboarding processes.

“One of the cornerstones of our retention strategy is really understanding and emphasizing our “why.” It’s essential to know why people choose to work with us, why the work we do matters, and why we are so passionate about what we’re doing. If you can align the company’s mission with individual missions, you’re on a sure path to retaining great talent.”

– Bryan Clayton, CEO of GreenPal and Hubstaff customer

Devote time to personalized coaching and development

To encourage your team’s commitment to the business, ensure that you invest your time and energy into their professional development.

Why? According to Mckinsey, the top reason people leave their jobs is more coaching and development. In LinkedIn’s 2023 Workplace Learning Report, nearly all team members (94%) would stay with their current employers longer if given the opportunity to advance their skills and knowledge.

“People who aren’t learning will leave,”

– LinkedIn Learning’s 2023 Workplace Learning Report

Coaching and development strategies

Irrespective of whether your team operates on-site or remotely, you can foster learning through 1:1 coaching, skill-focused team-building initiatives, and engaging “lunch and learn” sessions. Ask team members what types of coaching they prefer.

“One strategy I swear by is fostering an environment of continuous growth. By investing in our team’s personal and professional development, we ensure they always have challenges to conquer and new skills to learn. This not only benefits us as a company but also them as professionals. And believe me, when they see you’re invested in their growth, they’re more likely to stay invested in your vision.”

– Bryan Clayton, CEO of GreenPal and Hubstaff customer

Degreed’s Chief Transformation Officer, Janice Burns, agrees with this approach.

“The most important elements of employee retention revolve around learning and development. Creating a space where employees can upskill has holistic benefits and fulfills the needs of the individual. Employees now, more than ever, are seeking ways to better themselves for their professional future. Employers who provide L&D resources for skill growth are fostering an environment of motivation and investing in their employees – empowering them for their future endeavors.

This can be seen in Degreed’s partnership with Bell and the creation of Bell U Academy. Degreed provided skill development programs and pathways for program participants looking for additional experience in their roles. Of the 241 program graduates, there was a 98% retention rate in their new positions. Further, these individuals rated engagement and perception of opportunity with Bell much higher than those who did not participate in these L&D programs.”

Be a great leader

Cultivate an enticing culture that draws people in and consistently demonstrates genuine respect towards everyone.

Why? According to Good Hire, 82% of employees would quit due to poor leadership. This includes dishonesty, a lack of transparency, micromanagement, and disrespecting personal time.

A DDI study found that ineffective leadership is the main reason people leave a company within the first year. Employees that notice poor interpersonal skills in leadership are 3.5 times more likely to leave.

True leaders prioritize their people. The same DDI study uncovered the need for CEOs to assess their leadership culture and cultivate leaders who wholeheartedly adopt a holistic, people-centric method. This means considering their workforce’s personal and practical needs.

“At Tru Earth, we believe our key retention strategy revolves around ‘Purpose.’ We build a culture around our shared mission of saving the Earth from plastic waste. We offer opportunities to do meaningful work – to create a product that makes a difference; this ignites an intrinsic motivation that is more powerful than extrinsic reward systems.

Another progressive method we implement is providing a balanced ‘work-life integration,’ which is especially crucial in the remote work landscape now. We strongly advocate for flexibility in work schedules, conscious of our team’s various lifestyles, mental health, and unique situations. We believe that a happy employee is a productive one, and through empathetic leadership, we’ve been able to foster this sense of balance and encourage better output.”

– Ryan McKenzie, Co-Founder & CMO of Tru Earth

Provide flexibility and prioritize well-being and work-life balance

Prioritize your team’s personal life before the demands of the business. They need time and space for their loved ones. One way we’ve helped people find better work-life balance is to provide them the flexibility to work wherever and whenever they like.

Why? Approximately 63% of rapidly expanding companies have embraced flexible “work from anywhere” models. A 2022 Accenture Report found that “work from anywhere” teams are more than twice as likely to stay at their organization.

In 2023, it’s imperative to make your employee experience a top priority, without a doubt. A fundamental aspect of cultivating an exceptional employee experience involves equipping your team with the appropriate tools for achieving success.

“We’re proud Hubstaff customers, and it’s been a fantastic tool in our arsenal. It’s not just about tracking hours but understanding work patterns and productivity and offering flexibility. By leveraging such tools, we can optimize work conditions for each team member, ensuring they’re working at their best times and in their best ways.”

– Bryan Clayton, CEO of GreenPal and Hubstaff customer

Recognize top talent with competitive compensation packages

Very few people would work 40 hours a week for fun. Compensation and benefits packages are crucial for retaining top employees and maintaining an advantage over competitors. For all you know, your employees might be receiving more appealing offers from the competition right now.

Why? Payscale, LinkedIn, Glassdoor, and Indeed report state that compensation is why employees quit. Makes sense.

Compensation includes pay and perks. If you find delivering a competitive pay rate challenging, you can stand out by providing great employee perks. Try offering adaptable work arrangements like remote work or a 4-day work week. It’s also important to give genuine recognition.

“During the early days, we had a talented young programmer critical to our tech operations. His unique prowess was shaking things up, but other opportunities were courting him. He loved the work but admitted he was considering leaving for a higher-paying position.

Realizing his potential, we initiated a “recognition and reward” strategy. Apart from improving his compensation, we ensured his work was visibly celebrated. He was given ‘Employee of the Month,’ and his achievements were shared company-wide; we continuously acknowledged his efforts in meetings. This strategy wasn’t solely about financial rewards but also public recognition that other companies couldn’t offer him. In the end, not only did he decide to stay, but his loyalty to Tru Earth increased remarkably as well. This taught us the importance of acknowledging employees’ work and creating an environment where people feel valued.

To retain top performers, companies need to go beyond ordinary perks—purpose, flexibility, and recognition have an immense role to play in harnessing talent and fostering loyalty.”

– Ryan McKenzie, Co-Founder & CMO of Tru Earth

Promote high performers and keep things interesting

The best way to retain employees is to elevate them through well-deserved promotions. Don’t just acknowledge their hard work with pizza parties and words of affirmation. Actually rewarding these accomplishments is the best way to show genuine appreciation for an employee’s ability to go above and beyond.

Why promote from within?

A Linkedin report showed that 76% of employees that receive a promotion will stay.

“People hold professional development in high regard, and companies failing to back their employees’ career growth through training, job transitions, and promotions are at a greater risk of losing their top talent,” according to Pew Research.

Shaunak Amin, Co-founder and CEO at SwagMagic, also believes in creating fluid roles to identify new team member talents.

“Fluid job descriptions enable employees to explore beyond their assigned roles and responsibilities. While they say that variety is the spice of life, it can also prevent boredom and burnout. We use the first three months to discover our new team members’ talents. Then we combine performance reviews and self-assessments to create customized job descriptions centered around their strengths.

By not cementing roles & responsibilities at the outset, we’re enabling team members to cross over into various functions for hands-on training that adds to their skillset and encourages them to take charge of their career growth on a path that works best for them. It also creates a more dynamic workplace that keeps employees engaged and learning.

When it comes to introducing new products, we aim to have them ready within a 3-month timeframe. This is possible because our team members work across various verticals, giving them a deep understanding of the business and the ability to make efficient decisions without lengthy approval processes. This approach allows us to launch new products and make iterative improvements quickly.

It’s how we scaled our sister brand SnackMagic from $0 to $20 million in ARR in just eight months.”

– Shaunak Amin, Co-founder and CEO at SwagMagic

Prioritize employee retention

Retaining talent has become the #1 priority for HR leaders. Start saving time and money by implementing these strategies and create a positive work culture that your team doesn’t ever want to leave.

After all, Gallup research indicates that enterprises with deeply engaged team members have the potential to experience a 21% increase in profitability.

It’s a win-win for everyone involved.