How To Improve You Employee Retention

employee retention strategies to boost employee retention rate

Employee retention strategies and employee retention rates are key issues for high-performing businesses. After all, talent is what the success of your business is built on, so keeping it around is imperative.

Therefore, employee retention strategies have become a real art. What do organizations need to know to prevent employee turnover? What can they offer to boost their employee retention rate?

In this article, we will introduce you to three employee retention strategies and use best practice examples to show you the types of measures that companies like Google and Zalando are actioning to hold on to their top employees.

What Is Employee Retention?

Employee retention is as the name implies: the ways organizations keep top talent around. These are all the unique ways that companies build consistency and success in their business. After all, the less time you spend on re-filling positions, the more you can spend on developing new hiring plans, developing your talent, and growing teams.

Looked at another way, employee retention can be seen as the various strategies organizations use to lower their turnover and attrition rates (click here to read more on staff turnover and attrition rates).

After all, retention is contingent upon employees not leaving your business, so you need to keep this metric top of mind whenever you are discussing employee retention strategies.

Why Do Employee Retention Strategies Matter?

For talented applicants, today’s job market is more wide open than ever before. The demand for highly-qualified staff is greater than the supply, putting highly-skilled workers in the privileged position of being able to be selective when it comes to choosing their employers.

What does this mean for companies? If companies want to keep their employees from moving to more attractive employers – or to nip any such idea in the bud – they are going to need to invest money and effort into building employee loyalty. This all begins by formulating employee retention strategies that work.

How Does Employee Selection Influence Employee Retention?

Employee retention doesn’t just begin on an employee’s first day. Even during the selection process, the foundation is already being laid for a long-term relationship between the company and its employees.

One of HR’s most important tasks is to identify those candidates whose profiles line up as seamlessly as possible with the corporate profile. This allows them to identify candidates with a higher likelihood of long-term retention right from the very beginning, rather than guessing and hoping for the best.

For example, applicants who appear to be highly talented but have unrealistic expectations will prove difficult for retention. Once it has been determined that an applicant’s qualifications will benefit the company, it is critical to consider whether or not that applicant will be able to find personal fulfillment and satisfaction within their role.

Tip: Compare applicants’ expectations with your company’s Employer Value Proposition. This will allow you, even during the application process, to assess whether or not an applicant is likely to make a long-term commitment to the company.

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What Is The Key To Employee Retention?

It boils down to one simple, yet elusive, concept: Employee satisfaction. Sociologists Timothy Butler and James Waldrop have identified three key factors that determine employee satisfaction:

  • Skills
  • Values
  • Interests.


In order to gain a sense of satisfaction from their work, employees must possess the skills and abilities necessary to carry out their tasks. That’s because feelings of incompetence quickly lead to thoughts of job changes.


The company’s value and reward systems must be consistent with employees’ expectations and must also be perceived as being fair. Monetary incentives, the creation of a positive working environment, or recognition and promotion are three fundamentally different models for rewarding employees – and there is even potential conflict between them.

Did you know that performance management cycles can help you hold onto your top talent? Ensure that every element of your performance process is effective for your employees, and click here for our full guide.

In addition, professional development can serve as a key strategy to not only ensure that employees are satisfied in their roles, but that they get better at what they do. For the full guide to professional development, click here to learn more.


Since our personal interests are so firmly rooted in our personalities, daily tasks, too, should overlap with personal interests, creating a natural ‘fun factor’ in the workplace.

Surveys have shown that salary considerations are a surprisingly low motivating factor for employees to change employers, meaning that soft factors, collectively termed ‘satisfaction’, are dramatically more important.

If the factors mentioned above can be provided, this will help establish a solid basis for employee loyalty. This can then be even further enhanced by targeted measures.

Try Our Free Employee Survey Template

Employee surveys help you to find out how satisfied your employees really are. Try using this questionnaire as a helpful template.

What Are Specific Ways To Boost Employee Retention Rates?

Basically, any time that a company makes an employee accommodation, we can generally understand this as an employee retention measure. This begins with things like flexible work models, such as working from home, part-time work, or the option of a sabbatical year.

Many companies also provide their employees with office amenities such as water, fruit, and coffee. Employers can score points with their employees here as well if they offer a large selection of quality products (especially when it comes to coffee). In addition, companies are also offering activities such as team events and company sports, or special employee rates for a gym membership, travel allowances, and other small financial incentives.

Keep in mind: The more individualized these measures are to the interests of employees, the stronger all employees will sense that they are appreciated.

The best and most well-known example of a company that has instituted a broad range of employee satisfaction measures is Google. Their offices are akin to an amusement park. This means that anyone leaving will also have to leave behind a prized working environment, making the decision even more difficult.

20 More Employee Retention Strategies To Implement:

Employee Training/Development:

  • Promotions
  • Fixed training budgets for employees
  • Training programs
  • Regular feedback from management
  • Assigning responsibility for projects/teams

Work-Life Balance:

  • Flexible working hours
  • Part-time work
  • Work from home
  • Sabbaticals
  • Assistance with child care
  • Christmas/holiday bonus
  • Travel allowance as a non-taxable, non-cash benefit

Working Environment:

  • Transparency, communication, respect, appreciation
  • Team events
  • Modern, fully-equipped offices where employees are able to work efficiently
  • Employee surveys
  • A spirit of cooperation
  • A culture of constructive feedback
  • Complimentary snacks, such as fruit, coffee, or cereal
  • Employee discount for lunches, e.g. at the company cafeteria

Employee Retention Strategy 1: A Culture of Feedback

One frequently-underestimated employee retention measure is the creation of a vibrant feedback culture. Once a key performer has, unbeknownst to management, already decided to leave, it is usually too late for the company to turn things around.

For this, we can look to a company like Zalando for an example of how measures like employee surveys and exit interviews play an essential role in retention strategies.

By regularly soliciting employee feedback, companies can take action to counteract brewing problems early on, while at the same time displaying an appreciative interest in the well-being of their employees, which, in turn, has a positive impact on employee satisfaction and loyalty.

Interviews with employees who are considering leaving the company are also valuable – they can offer insight into problems within the company and provide information about enticements being offered by competitors.

A casual conversation over lunch is much more relaxed than an official feedback session. Ask your employees to share their feelings about how things are going. Consider questions like:

  • Are they satisfied with their responsibilities and the working environment?
  • Are there changes they would like to see made?
  • What tasks could they imagine taking on in the future?
  • In which direction do they want their careers to develop?

Employee Retention Strategy 2: Selective & Tailored Retention

Boosting your employee retention rate costs money. So, it is a good idea to have a number of foundational strategies for showing employee appreciation. That said, companies should also consider which specific employees are deserving of even greater investment.

Top performers with long years of service, rising talent, or key executives are – in purely economic terms – ‘more valuable’ than minimally-qualified, relatively unmotivated employees.

The MTU Aero Engines GmbH company provides a clear example of just what selective employee retention measures might look like. They created a profile for a ‘bottleneck employees’, and have subsequently developed individually-tailored programs to promote talented junior staff members while working to ensure long-term loyalty.

Employee Retention Strategy 3: Vision-Based Employee Development

The example above shows that companies that explicitly wish to retain specific employees are going to have to ask themselves a variety of questions. For example:

  • Which employees are contributing most to the company’s success?
  • Of them, which employees are going to play an important role in the future?
  • Where do bottlenecks in the company exist?

Building loyalty only in current high performers, however, doesn’t extend far enough. Employee retention also falls within the domain of strategic corporate development, meaning that companies must consider this part of their corporate vision.

Do Employee Retention Strategies Help Employee Motivation?

It’s reductive to view employee retention only in terms of increasing your employee retention rate. Employees who, in a positive way, feel bound to their companies, almost always display a higher degree of motivation than those who are prepared to change employers.

Employee retention strategies can therefore also be considered a basis for employee engagement. They not only prevent wear-and-tear on the staff – but lays the groundwork for growth and success that would otherwise not be possible.

Employee Loyalty: Beneficial For Employer Branding

Investing in your employee retention rate pays off in a number of ways. It helps companies to retain and motivate valuable employees, while at the same time enhancing the employer brand. This makes retention management an essential component of any employer branding strategy.

Satisfied employees who feel a deep commitment to the company and are well-integrated within the company network are far more likely to act as positive multipliers. This means they automatically attract, from within their own networks, new talent. These employees represent both valuable long-term resources and effective public testimonials to your company.

What Are Other Companies Doing?

Fonepit AG: Within the Berlin “AndroidPit” community, group lunches, parties, and sports activities are a part of their weekly routine. In addition, employees who meet or even exceed their targets receive incentives, including vouchers for such things as free lunches or even vacations.

Travelbird: This online travel deal agency has more than tripled in growth in a very short period of time, making employee training and career opportunities major topics! There, in addition to providing employees with a company restaurant and offering regular massages, an in-house academy provides training for employees – whether in leadership skills, sales, technology, or creation. The aim is to have every employee placed in their optimal position within the company.

Personio: At Personio, it’s not just our growth that is rapid – so are our commutes. At the time of hire, each employee is given an environmentally-friendly Unu scooter – or, alternatively, an allowance for public transportation. And, to ensure that our growth curve will continue to rise, each employee is given a training budget of €1,500 per year.

How Performance Management Enhances Employee Loyalty

If you want to make employee retention an integral aspect of your daily responsibilities, you are going to need a plan – a plan that will be satisfactory to employees and management alike. This is where performance management comes in. It ensures that your company’s performance evaluations are being conducted properly.

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