Improve employee retention in five steps

employee retention
Not the way to do it.


Employee retention is the second biggest challenge facing businesses, just behind the recruitment of talent.

High employee turnover not only increases an organisation’s expenses, but also takes its toll on the business’s morale. Worse, the departing employee will often go to a competitor, turning your asset into theirs.

A few years ago, LinkedIn conducted research into global recruiting trends, which revealed that 41% of respondents expected to remain in their current workplace for less than two years. 37% would stay for at least three years, while the remaining 22% were unsure how long they would stay in their current company. Their  ‘Why and How people Change Jobs’ study revealed the three main reasons workers tend to change jobs: 1) to take the next step in their careers; 2) a desire for more challenging projects; and 3) increased compensation.

To successfully improve retention rates, it is important to understand what is driving employee flight (e.g. benefits, compensation, engagement, communication, opportunity, culture etc). Once these have been identified it is possible to implement initiatives that can improve employee retention rates. Here are our top five tips.

1. Hire the right people for your culture

One of the first contributors towards improved retention rates revolves around hiring the right talent. When the bond between an employee and the business is strong and when this is combined with having the right skillset for a particular job requirement, improved retention is more likely to occur.

At this stage, information is key: 37% of hiring managers supported the idea that retention rates could have been improved if candidates were better informed about the role and the company’s culture during the hiring process.

We have written before about the benefits of using values-based interviewing to determine cultural fit. If a candidate’s values and motivations align with those of the company, there is likely to be a much more mutually-rewarding and longer-term relationship.

Last year, we were asked to estimate the retention rates of staff we had placed four years previously: when we checked back, 75% were with the same business. We are convinced that this is because we take the time to interview against both values and competencies, matching them with the client.

2. Empower your employees

Over the years more organisations are beginning to understand that giving more responsibility and power to employees is not only beneficial for the workforce but for the business as a whole. Employee empowerment is all about autonomy, accountability and trust. Empowered employees will tend to be more loyal, committed and more productive.

When workers are given both the tools and resources to manage their own projects, work toward their goals and drive their own career, the benefits can be endless. In fact, research has shown that employee empowerment is directly associated with stronger job performance, job satisfaction and commitment to an organisation. (Seibert, SE, Wang, G, & Courtright, SH (2011). Antecedents and consequences of psychological and team empowerment in organizations: A meta-analytic review. Journal of Applied Psychology, 96(5), 981–1003.).

In addition, allowing employees to have greater autonomy, responsibility and power can also instil greater trust in leadership, generate a better business work culture, improve employees’ motivation and allow more space for creative thought. It’s tough for some managers to let go, as we have noted, but worth it in the long run.

3. Keep employees motivated through benefits and competitive salaries

One of the main reasons people tend to leave their job is due to unsatisfactory compensation. LinkedIn’s  ‘Why and How people Change Jobs’ study also revealed that 25% of Baby Boomers (51+ years of age), 29% of Generation X (36-50 years of age), and 40% of Millennials (18-35 years of age) are unsatisfied with their compensation and overall package.

There is a large range of mixed research regarding the influence of compensation on performance, motivation and job satisfaction. Some research suggests that greater compensation is correlated with greater performance, motivation and job satisfaction (Gardner et al. 2004); however, some research has also suggested that increased compensation impedes innovation and intrinsic motivation (Pfeffer et al. 1998).

The key to optimising motivation and performance while preserving innovation and intrinsic growth is creating a compensation scheme that is effectively competitive but that also allows room for advancement and progression. It is also important to be aware that money isn’t the only motivator: it’s worth investigating the motivations specific to your own employees. For instance, Pfeffer et al. (1998) found that workers are also motivated by operating in an intellectually stimulating and family-friendly environment.

4. Have leaders, not bosses

A ‘boss’ in this shorthand, is a top-down, command and control type, who separates themselves from their workforce. By contrast, a good leader has the following attributes:

They will define a clear direction for the future of the business and share this information directly with their employees. This will help ensure that the direction, attitude and performance of a team is consistently aligned with the business’ trajectory.

They should also be personally involved in facing the challenges that threaten an organisation rather than always delegating this responsibility to their employees. This will result in not only a better workflow, but also a culture of mutual respect between leaders and their reports.

Leaders should exhibit a genuine desire to provide value and take pride in their work. This will help motivate employees to perform according to the organisation’s standards and will also foster innovative and creative thinking.

Good leaders also understand the value of their workforce, appreciating the fact that employees are their most valuable asset. This will feed into employee empowerment and feeling of ‘belongingness’, which will significantly impact the team members’ job satisfaction and promote improved retention rates.

Last but not least, leaders should inspire confidence and act with integrity.

While bosses are seen as those giving orders, real leaders give vision and unity, and thereby improve their company’s culture and prosperity. Leaders should view management and leadership skills as open-ended projects and avoid resting on their laurels. Having effective leaders will directly play into employee engagement and motivation and will also significantly influence employee retention rates.

5. Promote internally

This may seem counterintuitive coming from an executive search business, but we understand the importance of improving businesses through people, and there is little that can be as demotivating to ambitious employees as exciting, high-level job opportunities consistently being sourced externally.

Of course, the needs of the business change, and there may not be any appropriate internal candidates for a given role. Nonetheless, we always encourage clients to coax their own team members to throw their hat in the ring. Even just engaging them in the process, benchmarking them against external candidates, and giving proper and constructive feedback (areas they could improve, suggesting training the company can give them and so on) is a highly motivational exercise.


Competition within an industry occurs at every level of a business. With better employee retention an organisation is more likely to be able to offer a better service and market them to a higher standard, so ensuring a greater chance of sustained success.

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Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the mediainformationtechnologycommunications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.