Managing Employee Turnover Rates: Six Ways to Increase Retention

Keeping employees is much more difficult than hiring them.

The Great Resignation, an economic trend where employees tendered their resignation en masse in early 2021, has been most employers’ nightmare. There were several reasons for this action, including wage stagnation, the rising cost of living, job dissatisfaction, and lack of career growth opportunities.

However, employees are the soul of every organization. They’re a valuable investment and are essential to the future and success of your organization in the long run. Hence, it’s important to keep them. 

Employee retention involves strategic techniques and planning to keep employees focused and motivated, so they can choose to remain with your organization and be fully productive for the company’s benefit. Employee retention also reduces turnover rates and related costs, ultimately increasing productivity and overall business performance. 

This article will discuss ways organizations can effectively manage employee turnover rates and increase retention.

What is employee retention?

As the name implies, employee retention involves retaining employees. But far more than that, employee retention is a company’s goal of retaining productive and exemplary employees and reducing turnover rates. Organizations can achieve this by creating a positive work environment to improve employee engagement, providing adequate benefits & pay, appreciating employees’ efforts, and encouraging a healthy work/life balance.

Organizations need to keep their best employees around to thrive. Therefore, increasing employee retention directly influences a company’s performance and overall success. In addition, employee retention is vital to team building and unity in the work environment so team members can trust and depend on each other.

When a talented employee leaves an organization, the results are always diminished productivity and morale, alongside the loss of competitive advantage. Employees who have been with the company over a long period add plenty of positive value to the business. They understand the organization’s visions deeply and have acquired the relevant skills to complete daily tasks in record time. 

Finally, employee retention helps to reduce the costs and time spent on scouting, hiring, and onboarding new staff members. Freshly hired employees need training and time to adapt to the workplace and its requirements, which can affect team productivity temporarily.

What is employee turnover?

Employee turnover is somewhat the opposite of employee retentionIt refers to the number of employees who leave an organization over a certain period. This includes workers who exit voluntarily as well as those who leave involuntarily (fired or laid off).

The concept of employee turnover sounds bad and scary for business owners. But it isn’t always bad because sometimes it means the exit of poorly performing employees. However, employee turnover almost always affects productivity and slows the work pace.

The employee turnover rate is an excellent indicator of a company’s work culture, the effectiveness of the hiring process, and overall employee management. To properly understand the phenomenon of employee turnover, organizations must consider which employees are leaving, when they are leaving, and why they are leaving.

How to calculate employee retention and turnover rate

You can calculate employee retention and turnover in percentages, which is quite straightforward. For employee retention, divide the total number of employees left after a certain period by the total number of employees present in the organization when that era began and multiply by 100.

For example, if an organization starts the year with a total of 1000 employees and by the end of the year has 800 employees left, the employee retention rate would be (800/1000) x 100. This means that the organization had an 80% employee retention rate.

To calculate employee turnover, divide the total number of employees that exited the company over a certain period by the total number of employees present in the organization when that period began and multiply by 100.

Causes of employee turnover

The only constant thing in life is change. There are several reasons why employees leave an organization. Some reasons are okay, while others are negative. One of the leading causes of employee turnover is cases where employees get a better offer elsewhere. Other reasons include

1 – Overwhelming workloads

If an employee feels overwhelmed by the amount of work they have to do daily, there is a high chance that they’ll start looking for an opportunity elsewhere.

2 – Lack of appreciation

Your employees want to feel that they’re doing a great job. So, it’s vital to acknowledge this when they perform excellently. People tend to leave places where they do not feel appreciated.

3 – Lack of flexibility

If your organization is not open to offering flexible options, your employees may begin searching elsewhere. Many companies now offer flexible working options such as flexible hours and remote working, and your employees may find them a better option.

4 – Poor development opportunities

Learning and development are vital to most of your employees. They will want to advance in their chosen careers within your organization. Therefore, you may witness a high turnover rate if your company does not offer career growth opportunities. 

5 – Poor workforce management

Employees often voluntarily leave a company due to poor management and bad relationships. Generally, if work relationships are positive, employees are more enthusiastic about performing better at work and staying focused and engaged. 

6 ways to reduce turnover rates and increase employee retention

You can handle your employee turnover rates and increase your employee retention. The tips below can help you achieve all these. So, read on. 

1 – Improve your recruitment process

Employee retention begins at the hiring and onboarding stage of the employee lifecycle. Improving employee retention involves hiring the right person. This requires that an organization first defines the vacant job (required skills, responsibilities, work environment). Then, the company can create a perfect job description that attracts the appropriate candidates.

After hiring a candidate, the onboarding process should educate them about the job, the work culture, and how they can contribute to and excel in it. Selecting and onboarding the right candidate for a job increases their chances of staying with the company for a long time.

2 – Healthy work-life balance

No amount of compensation or salary can balance out chronic burnout. Overworked and overwhelmed employees are likely to lose focus, which causes them to perform below par.

Employees love to work in an environment where they are not constantly overworked. If they have to work extra hours, they love getting overtime pay quickly. Therefore, every organization needs to ensure that they do not overburden team members with work. To do this, you should encourage your employees to embrace a healthy work-life balance and take on reasonable workloads. 

Managers should create better schedules to this effect. By providing employees with balanced and evenly distributed shifts, you make them happier at work and have an easier task retaining talent. If you’re wondering how to make an employee schedule, there are multiple tools that can assist you. Using employee scheduling software will simplify the schedule-creating process. In addition, you can grant your employees access to the schedule, and even clear them to edit and update the schedule. 

3 – Effective communication

Communication strategies in the workplace also influence employee retention. For your company to attract and retain top employees, fostering a culture of open communication at work is crucial. Effective leadership involves listening to concerns, addressing them, giving feedback, and implementing solutions. Organizations require these qualities for exceptional performance and employee retention.

Giving employees the freedom to speak freely can boost the team’s morale. This way, employees can share their thoughts and ideas, address conflicts, and partake in organizational development. In addition, once employees are sure that they can communicate freely about work issues, their satisfaction levels will increase.

4 – Invest in your employees

Your employees want to know that they are valued and that their development is a priority to the organization. Therefore, creating learning and development opportunities can hugely increase employee retention.

Participate actively in their professional growth to show them that you care about their progress, which will strengthen their commitment to the organization. Employees can acquire new knowledge by attending relevant seminars and workshops, while taking courses to develop professionally.

5 – Appreciation and rewards 

Nobody likes to remain in an environment where they are not appreciated. Your employees need recognition and appreciation. They dedicate a good part of their lives to ensuring that the company thrives; hence a little gratitude is not an unreasonable demand. 

Organizations should thus acknowledge and encourage employees who perform excellently in their tasks to continue doing a great job. It can be as little as a thank you. Organizations may also add other types of appreciation, such as raises, bonuses, paid time off work, and promotions.

6 – Employee engagement

Engaged employees are satisfied with their jobs, love their work and the organization, feel a sense of responsibility, take pride in their companies, and know that their employers recognize their contributions. 

They also build stronger customer relationships, helping their company increase sales and profitability. In one study, highly engaged workers were found to be five times less likely to leave their jobs than unengaged workers.


High employee retention rates and low turnover contribute to the success of any organization. Employees that have been with a company for years are more committed to its vision and mission. 

Improving retention begins at the recruitment stage and requires more intentional efforts down the line. If your company is experiencing high employee turnover rates, you can leverage the tips above to improve your retention rates.

Comments are closed.