How to improve employee retention and motivation

For founders and HR professionals alike, the “Great Resignation” of 2021 was a wakeup call. At the time, a Gallup poll revealed 48% of working Americans surveyed said they were actively searching for new opportunities.

The Great Resignation and active disengagement aren’t just buzzwords--they’re a direct impact on a company’s productivity and bottom line. If an employee in a technical position leaves their role, it's estimated a company will spend 100 to 150% of that person’s salary simply searching for and training a replacement.

Losing an employee is pricey, and it impacts morale in the office overall. If other employees feel a sense of discontent and observe coworkers leaving, it could start a domino effect.

The challenge of boosting employee retention might feel overwhelming, but in reality, a few simple strategies can boost morale and even increase productivity. Improving employee retention and motivation can feel like a tall task, but start with these simple initiatives.

How to improve employee retention and motivation

Employee retention and motivation are more crucial than ever in today's dynamic work landscape. Companies are realizing that keeping their workforce engaged can significantly impact their bottom line. It's not just about minimizing turnover; it's about cultivating a thriving company culture that everyone wants to be a part of. Happy and motivated employees are more productive, more innovative, and more likely to stay loyal to their organization. With the added layer of post-pandemic work preferences, companies must adapt to modern expectations to retain their top talent. How can you boost employee retention and motivation? Here are some effective and practical strategies:

• Invest in healthcare benefits catering to your employees' physical and mental well-being.

• Ensure competitive compensation to match industry standards.

• Offer career development opportunities to invoke a sense of growth and accomplishment.

• Promote work-life balance to support the personal needs of your team.

Competitive compensation packages

It’s easier said than done—pay employees competitive wages. According to Pew research, employees with higher incomes are more likely than those with lower and middle incomes to say that they’re satisfied with their jobs.

Job satisfaction directly translates into employee retention. While not everyone can have the highest income at a company, online salary guides to ensure employees’ salaries align with national averages and trends can help boost retention and keep your team from seeking better-paying roles elsewhere.

Remember, to train and employ someone in a technical role; you’ll spend at least their salary in time and training on hiring someone new. You’d likely save money by offering an employee in the same role a raise to keep them engaged, then having to start the process anew.

Pathways to growth: Career development opportunities

Another common reason employees leave is the feeling of “being stuck.” According to Pew, 63% of working Americans who quit their jobs in 2021 did so because they felt there were “no opportunities for advancement.”

Feeling stuck in place with no room to grow can be frustrating. It can also reduce productivity and lower employee morale.

Career development doesn’t have to be a massive undertaking for employers. In some cases, it’s as simple as communicating new opportunities opening up in the company or providing opportunities to learn and practice new skills.

Balancing life and work

It should come as no surprise that employees crave flexibility and freedom in the digital age. In 2021, 45% of American workers who quit expressed that a lack of flexibility in hours led them to leave their roles.

While not every role is suited for remote or asynchronous work, explore opportunities for individuals to set their own hours. That could mean setting “core hours” when teammates need to be in the office or online but giving them flexibility throughout the work day to complete things in their own time.

For example, an office could set core hours from 10 a.m. to 2 p.m. EST, Monday through Friday. Employees are expected to get their tasks done outside of those hours, but they don’t need to be online or responsive outside of 10 a.m. to 2 p.m. In that block, your employees can schedule in-person meetings and check-ins and reach out to each other, expecting an immediate reply.

Providing employees with the ability to choose when they work strengthens their sense of independence. It also creates a culture of trust instead of micromanaging.

Building a supportive work environment

A positive work environment won’t just boost employee retention but also increase work output. This doesn’t mean the C-level team has to enforce a culture of “toxic positivity,” but it does mean implementing strategies to stave off negativity, including:

• Encouraging open communication across teams

• Boosting personal development opportunities

• Providing a clean, safe, and comfortable work environment

• Leading by example

If your team is searching for ways to improve retention and morale, chances are you’re already looking to create a more positive environment. In some ways, a positive environment is simply a secondary benefit from boosted employee retention.

Celebrating success: Implementing recognition and rewards systems

No one likes to be ignored when they do a good job.

When a company doesn’t take time to recognize or reward employees for good work, it risks losing employees and dampening morale. Ignoring hard work can even lead to lower performance in the future, according to a study from HR and consulting firm Bersin.

High-performing companies are 1.7 times more likely than lower-performing companies to have a business strategy recognizing employees’ hard work.

Even a little recognition can go a long way. A job well done won’t always get a parade or an award, but reminding managers to email teammates when they’ve done well is a simple way to create a kinder office culture.

Enhancing communication within teams

Just because your team is constantly communicating via Slack or email doesn’t mean you have a good communication strategy. Take time to listen to employees and implement their feedback. When employees feel they’re being heard and taken seriously, they are more likely to feel invested in their role and the company at large.

A trendy strategy for improving communication is the “Stay Interview.” The stay interview is like an exit interview for employees who have continued to stay on. Frequently, employers only hear honest feedback from employees when they’re on their way out.

A stay interview is a time to talk openly and honestly about what an employee likes and dislikes about their role and the company at large. These interviews could be conducted on an annual basis to boost employee morale.

Prioritizing employee well-being and flexibility

Employees who feel good mentally and physically are more likely to feel motivated in their role.

Employees leaving their roles often cite poor benefits, including health insurance and paid time off, as a major motivator for quitting.

Giving employees a choice regarding healthcare coverage can be an important first step in overhauling company culture.

Navigating employer-sponsored insurance doesn’t have to be complicated. Thatch is helping democratize coverage, empowering employees to choose healthcare that works best for them.