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Five Tips to Retain Your Best Employees

Provided by the International Finance Corporation


High turnover of (good) employees often means financial, time and productivity losses for your business. Employees also often leave for reasons you would not expect. According to the HR management consultancy Leigh Branham, 89% of managers think that their employees leave for higher salaries when 80-90% of employees actually leave for non-financial reasons.

Employee retention hinges on your work culture. In a 2017 Korn Ferry Executive study, nearly three-quarters of respondents reported that culture was the key to retaining employees and to the success of organizational financial performance.

If you’re serious about retention, make sure then that your company culture includes these dimensions:

1.  Provide a meaning and purpose

Communicating an inspiring vision can go a long way to help employees feel emotionally connected and committed to the company. In another Korn Ferry Executive study, 73 percent of respondents said that their first driver at work was doing a job that had meaning and purpose, while for only 3 percent pay was the main driver.

2.  Give trust and confidence in the leadership

People leave bosses, not always the company.  A 2015 Gallup study found that managers account for 70 percent of employee engagement variance, and one in two employees had left their job to get away from their manager to improve their overall life at some point in their career. Engaged employees quote regular and safe communication with their managers, clarity about responsibilities and progress expectations, fair treatment and respect from their managers and ability of those to fight for them when needed, as key to their trust and confidence in the leadership and to their engagement.

3.  Recognize achievements

Communicating and rewarding achievements, providing career advancement, merit-based promotions and bonuses are important for your best employees to feel rewarded and gratified. When your company grows and where relevant, providing also support for key life events, college tuitions, health insurance and retirement enhancements or saving plans can also be key to retaining your employees. 

4.  Provide the ability to grow and advance

Make sure employees can see a clear path of advancement through regular feedback and constructive performance evaluations. Coaching, skills development, exposure to new networks and responsibilities can then help you mobilize and retain your employees at the right place, as they evolve in your company.

Internal mobility can be key to that extend. In a recent article about why people quit their jobs, Harvard Business Review quotes the example of Credit Suisse. The bank estimated that it saved $75 million to $100 million in a year in rehiring and training costs and reduced attrition by 1% after it moved 300 employees into new positions. Those employees were identified as about to leave the company and were consequently alerted over cold calls about openings inside the company.

5.  Give flexibility

Improve retention through a culture encouraging flexible work arrangements: flexible work location or ability to work remotely at least part time, flextime with adapted working hours, flexible roles and job sharing to leverage the unique skills set of your talent base. This will not only help you improve retention but also productivity, creativity, while supporting work-life balance and satisfaction, which are keys to your business success!

Further resources:

  • Where do you stand on your Employee Engagement Index (EEI)? Ask employees how closely they agree with the following four items:  (a) pride: I am proud to tell people I work for my organization; (b) satisfaction: Overall, I am extremely satisfied with my organization as a place to work; (c) advocacy: I would gladly refer a good friend or family member to my organization for employment, (d) commitment: I rarely think about looking for a new job with another organization.
  • Get a sense of your employees satisfaction before they decide to leave you with the ‘sample script for employee job satisfaction feedback’ 
  • Analyze feedback about your company gathered during exit interviews with employees leaving the company. See a sample exit interview questionnaire
  • Retention starts at onboarding. Consult 5 tips to onboard employees effectively
  • Retain employees by recognizing their achievements and helping them grow through constructive feedback
  • Smooth termination with employees leaving the company following those tips
  • Learn more about managing employees in general

For more information about the studies referenced in the article:  

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2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, www.ifc.org

The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law.  IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or  liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon.

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