13 Effective Employee Retention Strategies For 2024

Millions of employees from multiple sectors around the world have upped and left their jobs since the pandemic. And according to a survey from the Boston Consulting Group of more than 11,000 workers across eight countries (the UK, US, Canada, France, Germany, Australia, Japan, and India), more than a quarter (28%) are planning to do so in 2024.

Numerous reports around this so-called ‘Great Resignation’ point to inadequate salaries, limited career development, poor work-life balances, bad health, and unhappiness with management as some of the reasons staff are leaving.

The mass exodus has turned employment into a worker’s market. TikTok users have coined phrases such as “quiet quitting” and “act your wage” as employees join growing communities who don’t feel properly valued by their workplaces.

But how does this affect owners of small businesses? If you feel like your business may be at risk of losing top talent, or you have already begun losing your best workers to the Great Resignation, now is the time to consider some employee retention strategies. We’ve rounded up the top 13 we believe will boost employee job satisfaction and help you hold on to your best workers.

1. Offer competitive base salaries or weekly wage

Offering a wage worthy of sacrifice and hard work should be the number one priority when making your employees feel their work is valued. Appropriate compensation is far and away more important than any other item on this list; you will not retain employees effectively unless you pay them what their time is worth.

Not only should employees be paid fairly, they should also be able to afford the cost of living where they live, their wages should be regularly adjusted for rising inflation and they should be additionally compensated as their experience level with the work grows. Additionally, every time their responsibility increases, so too should workers’ reward increase.

The first step to offering your employees the right wage is to determine the living wage in your area. In the UK the minimum wage (effective from 1 April 2024) for workers aged 21 and over is £11.41 an hour. This is known as the National Living Wage. For workers aged between 18 and 20, it’s £8.60 an hour and for those aged between 16 and 17 (and for apprentices) it’s £6.40 an hour.

This should be the absolute base pay for any position and wages should increase from there.

The second step is to research what your competition is offering in terms of salaries and wages, and what kind of raises competitors have been handing out.

If you are not offering the top wages compared to your competition, you will be more likely to lose your best employees. Lower performers will take their jobs, costing you significantly more money in the long haul than were you to just pay the best employees more.

Bear in mind that hiring and training a new employee is likely to be significantly more expensive than raising the wages of an existing employee.

2. Allow your employees to work from home

According to 2023 data from the Office for National Statistics (ONS),10% of UK workers now work home all the time and 29% some of the time. A further 39% are unable to work from home, while 10% have the option and choose not to and 12% have not worked.

Remote work isn’t just convenient for some, it has been shown to make employees happier and more productive. A recent report from freelance platform Upwork shows the benefits of working-from-home include a reduction of non-essential meetings, increased schedule flexibility, commute elimination, fewer distractions and greater autonomy.

When your employees do not have to spend time sitting in traffic or on delayed trains, stressing about child care or losing productivity due to lengthy meetings, they are likely to be more productive and happier.

However, remote work is not a permanent solution for some businesses and many UK workers are choosing to return to physical places of work. However, offering at least flexible work-from-home options may mean you retain your best employees in the long run.

3. Provide flexibility and reduced workdays

Along with offering remote work, studies from the Society for Human Resource Management also show businesses offering more flexible work options maintain significantly better worker retention.

Even before the pandemic made work-from-home a norm, a 2019 study showed nearly two-thirds of workers found themselves more productive outside of a traditional office due to fewer interruptions, fewer distractions and less commuting.

Creativity can’t always be turned on like a tap, so offering your employees flexible hours encourages them to find the times they will be most efficient and productive to focus attention on the work.

Along with providing flexible scheduling, reducing the hours in your workday or work week can actually increase employee productivity and encourage more employee retention. For example, while it’s tempting to think that ‘workaholics’ who are the first to arrive and last to leave are more productive, that’s not necessarily the case if hours are lost to burnout or exhaustion.

4. Encourage and promote work-life balance

Fourth on our list of key retention strategies for businesses is to encourage and promote a good work-life balance – not just for your employees, but for yourself, too.

Especially after the pandemic drastically changed how employees value work, more and more workers cite work-life balance as the reason they consider new jobs or the reason they have refused opportunities.

That work-life balance could come by means of remote work, flexible scheduling or reduced workdays, as mentioned above, or simpler acts such as encouraging employees not to check email or answer work questions via phone unless at work or on the job.

Respecting employees’ time away from work is key to maintaining a healthy working relationship with them.

5. Recognise and reward your staff

Employees who feel appropriately recognised and rewarded by workplaces are much easier to retain long term, but studies also show those employees will work harder and be more productive.

There are numerous ways to recognise and reward your employees, but it’s important to make sure you prioritise social recognition as well as monetary rewards. Consider asking employees open-ended questions about what they’d like in terms of rewards, too.

6. Create the right culture

Another key retention strategy is creating a work culture that your employees want to be part of. A Glassdoor study found that a company’s culture matters significantly not only to employees who are considering a job (77% said they would consider a company’s culture), but also to employees staying in their jobs. In fact, nearly two-thirds of employees cited a good company culture as one of the main reasons they elect not to leave.

Developing a great company culture may involve implementing many of the retention strategies detailed in this list. These efforts might include rewarding your employees not just for success but for effort, creating a meaningful mission for your company and involving your employees in creative decision making about the present and future of your organisation’s mission.

It’s also important to make sure your workplace is diverse and inclusive. A workplace respecting people of all races, backgrounds, genders and sexual orientations will attract and retain a wider, more diverse and ultimately better community of talent.

7. Build employee engagement

One of the most important strategies for employee retention is to build up your workers’ engagement with your organisation. A disengaged employee may have lower morale, cause losses in productivity and, ultimately, have a negative effect on your company.

Make sure to give your employees a voice by making them feel listened to and showing them that their opinions matter. One way of doing this is by introducing opportunities for your employees to feel safe giving candid feedback such as through anonymous Q&A sessions.

8. Put an emphasis on teamwork

Another key part of employee retention in some environments is creating a strong emphasis on teamwork, such as creating chances for interdepartmental collaboration.

Strong teamwork encourages bonding between co-workers, which can create a better overall culture which drives performance. Good teamwork will also help managers and employees pair up strengths and weaknesses within departments and more strategically balance the workload.

9. Reduce employee burnout

A 2020 Gallup report, Employee Burnout: Causes and Cures, found that 76% of employees sometimes experience burnout on the job and 28% stating they feel burnout “often” or “always.”

While it is often assumed burnout is caused by overwork and can be solved by taking days off or reducing work hours, Gallup’s study found burnout is actually more influenced by how employees experience their workload than the literal number of hours they work.

Employees who feel more engaged by their work, who are properly recognised and rewarded and who are offered better job flexibility via reduced hours, remote work or flexible scheduling actually report higher well-being.

The Gallup report found the top five factors that lead to employee burnout are:

1. Unfair treatment at work
2. Unmanageable workload
3. Unclear communication from management
4. Lack of manager support
5. Unreasonable time pressure.

Developing and improving your overall company culture, building better employee engagement and offering clear communication, consistent management and transparency will all help reduce employee burnout.

10. Provide wellness offerings

The pandemic was a stark reminder that both physical and mental health are paramount to a happy, functional society. But taking care of your employees’ health doesn’t just mean flexible scheduling or remote working. You should also make sure that your workplace is clean and hygienic with health and safety protocols in place.

You should also implement rules against employees coming to work while sick. This means providing sick pay to incentivise employees (required to be at a location) to stay home when sick. Make sure to also provide quality health insurance with excellent coverage and numerous tiers and options so your employees know their health is valued.

Some companies, including LinkedIn, have also found success in providing all employees mental health time off to cope with burnout at the same time. This collective week of time off reportedly allowed burnt-out workers to not feel like they were missing important emails, meetings and project notes.

11. Foster growth and offer professional and personal development

A great business recognises how important training is during the onboarding process of an employee, but a business with strong employee retention also recognises the value of continuing to invest in training and upskilling employees.

Upskilling your employees by investing time and resources and providing them access to additional education and training within their field not only makes them happier and more likely to stay with your company, but also makes your company stronger as a whole.

12. Manage for retention

A 2018 report on the Employee Experience by Udemy found nearly 50% of employees quit their job because of a bad manager. A good manager, on the other hand, acts not as a “boss” but as a “coach.”

The key difference being that while a boss is seen as an unsatisfiable source of demand micromanaging every aspect of employees’ work, a coach knows their employees are players on a team.

A good employer/coach works to guide employees in the right direction by offering advice, support and goals while still allowing their workers to have a high degree of autonomy.

13. Know when it’s time to say goodbye

Unfortunately, no amount of strategy will guarantee perfect employee retention. At some point, your employees must move on, either to retire or to find work more suited to what they’re looking for.

Knowing when it’s time to say goodbye and handling employee offboarding effectively and well is just as important for overall employee retention as any of these other strategies. Remaining employees should know they will be well taken care of whenever they do move on themselves.

Why employees leave (and why they stay)

Encouraging employees to stay is important, but knowing why employees leave can be more important to developing an effective retention strategy. Offboarding, the process of closing the employment of a departing employee, can be just as important as onboarding.

Offboarding can help encourage an amicable separation, ensures the transfer of knowledge and secures the company’s property and data as well as help a company learn why an employee is leaving and what it might be able to do in the future to keep employees.

A key part of the offboarding process is the exit interview, which can give employers insight into why employees are departing. A few of the most common reasons are as follows:

• Inadequate salary or hourly rate
• Feeling overworked or unsupported
• Little or no room for growth and career advancement
• Need for a better work-life balance
• Unhappy with management or the company culture
• More compelling job opportunities.

Herzberg’s Two-Factor Theory

American psychologist Frederick Herzberg, perhaps most famous for his work in business management, famously promoted his “Motivator-Hygiene” theory, sometimes also called his “Two-factor” theory.

According to the theory, two sets of factors influence motivation in the workplace and either enhance employee satisfaction (and thus encourage employee retention) or hinder it.

The hygiene factors refer to those factors actually enabling motivation in the workplace. Herzberg’s hygiene factors are those that meet the physiological needs each employee expects to have fulfilled.

These factors focus on things such as money, job security, good work relationships and positive working conditions. Without these base hygiene factors, employees cannot be satisfied, and no amount of motivating factors will retain employees at the company.

The motivating factors, on the other hand, are dependent on the conditions of the job itself. These are the factors that motivate employees to perform better and strengthen their commitment to the company and their jobs. These factors focus on things such as growth opportunities, professional development or advancement, recognition, greater responsibility and more.

How to create your own employee retention strategy

While all of the 13 employee retention strategies we outlined above are effective in their own ways, each business’s needs are unique and some strategies make more or less sense than others.

Competitive pay, wellness offerings, perks and professional development can all provide direct benefits to the employees themselves. While your business may not be able to offer everything your employee is looking for in each of these areas, if you choose a few of these strategies to focus on, you can still begin working toward enhancing employee retention.

Offering work-from-home opportunities, flexible scheduling, promoting a work-life balance and reducing employee burnout are all important strategies to help retain employees.

Since certain business types do not allow flexible scheduling or remote work due to the nature of the business, it may make sense to focus on promoting a healthy work-life balance and offering strategies to reduce burnout.

Creating a strong culture through recognition, rewards, engagement, teamwork and good hiring and management practices are all strategies to create the best environment for your employees.

These are all key regardless of your type of business, but it may make sense to focus on certain ones more or less depending on your field of work. No matter how you manage to show your employees you care, the culture you create at your workplace is paramount to good employee retention.

Bottom line

Employee retention is incredibly important to the operation of a successful business. The strategies we’ve outlined above are not an automatic fix but part of a larger shift toward supporting and caring for employees many companies are not doing enough for.

The pandemic has left many workers recognising the value of their time and energy, so making sure your company is proving you value your workers’ time and energy appropriately is incredibly important and, ultimately, central to its success.