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How to Reduce Employee Turnover Through Robust Retention Strategies

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SHRM has partnered with Security Management magazine to bring you relevant articles on key HR topics and strategies. 

Roughly 42 million U.S. employees, or more than one in four workers, will leave their jobs this year to go work for another company, according to the recently released 2018 Retention Report: Truth and Trends in Turnover.

It doesn't have to be this way. "More than three in four employees (77 percent) who quit could have been retained by employers," write the authors of the study, which was conducted by the Tennessee-based Work Institute using data from more than 234,000 exit interviews.

Turnover trends such as these are compelling many companies and managers to up their games when it comes to their employee retention strategies. And through better retention, these firms are hoping to avoid the high costs of turnover. For example, the report finds that U.S. employers will pay $600 billion in turnover costs in 2018. Companies can expect that annual cost to increase to $680 billion by 2020, according to the study.

But achieving success in retaining talent can be challenging for another reason: The current labor market, which by historic standards is in a very tight, low-unemployment phase. The U.S. Labor Department announced this summer that, for the first time on record, jobs outnumbered job seekers.

"We now have more jobs than people to do them, which means our labor [shortages] are going to get worse," said Society for Human Resource Management (SHRM) President and CEO Johnny C. Taylor, Jr., in his opening address at the SHRM 2018 Annual Conference & Exposition in Chicago.

That development is a "really alarming" one for organizations who are trying to retain talent, says Gabriel Stavsky, a talent management consultant with Retensa Employee Retention Strategies. "Think about the implications of that. Employees will have that upper hand," Stavsky says. 

Why do employees leave? According to the Retention Report, the three top specific reasons for employees to leave jobs in 2017 were career development (21 percent), work-life balance (13 percent), and manager behavior (11 percent). Experts say these reasons all fall under one broad umbrella of why employees leave companies: Their employer is not meeting their expectations and needs.

Armed with this knowledge, managers can strengthen their retention strategies and efforts and retain more employees by focusing more on the needs and expectations of the workers. Some best practice guidance on how to do this follows. 

Retention Starts Early

Most experts agree that retention efforts should start on day one, and this makes the onboarding process crucial to retention success—and, sometimes, a predictor as to whether the employee will be short-term or long-term. Yet only 12 percent of U.S. employees strongly agree that their company does a good job of onboarding new employees, according to a Gallup poll released last year.

Successful onboarding should accomplish three things, according to Gallup workplace consultant Robert Gabsa: employees learn what makes the company unique, employees learn exactly how their jobs help fulfill the company's mission, and employees experience the mission and values of the company. "Employees yearn to feel connected to their roles, colleagues, managers and companies," writes Gabsa in a recent article for "By creating better experiences in the onboarding phase, companies can build these emotional connections early in the employee journey."

Given this, the onboarding process should be a two-way one, says Amy Hirsh Robinson, a principal with Interchange Consulting Group who discussed retention strategies recently in a presentation at the SHRM 2018 Annual Conference. Managers should communicate the company's story and accomplishments to new employees, but they should also focus on the new employee by communicating how his or her skill sets and work accomplishments will help the firm.

But this is where many firms fall down, says Robinson, who has worked with large companies on onboarding issues and observed a common trend in those assignments. Companies are often good at telling their own story, but a continual focus on the company makes the employee feel left out–especially younger workers who want to be recognized. "None of the companies focused on the new employee as an individual," she says. "It was falling flat, especially on the Millennials."

So, Robinson recommends a different approach: early in the onboarding process, managers should sit down with new employees and discuss their background and previous experiences, and how those may fit in to their current job and the organization's mission. "Companies need to connect the employee to the organization's mission or purpose and demonstrate how that employee personally impacts the brand or customer experience," Gabsa writes. "Feeling like your job matters is an underrated aspect of performance."

Some firms that pride themselves on best practice onboarding will even have managers sit down with the employee and draft a sample career path, based on the employee's future goals. "The employees are so appreciative," Robinson says. And managers can supplement this career path exercise by relating examples of former employees who held the same position as the new employee and went on to have a successful career, she adds.

Robinson also advises managers to give new employees meaningful work as early as possible; this shows trust in their abilities and engages them from the start. And managers should not simply rely on organizational charts to explain work flow and reporting structures. Instead, they should try to explain the unwritten rules and process quirks regarding how things work.

On a more granular level, managers should make the effort to ensure that common onboarding pitfalls are avoided, Robinson says. Orientation sessions should not be overloaded with detailed policy information. She cited one company that held a four-hour orientation session that consisted almost exclusively of policy and benefit information discussed in excruciating detail. "It felt so penalizing to the new employees," she says. Instead, companies should try to communicate policy details through online or printed materials and focus on overviews during in-person meetings.  

Another common pitfall is not having a clean work station ready for the employee on the first day, Robinson says. "It happens all the time," she says. Finally, managers should not assume that what worked for them when they were hired will work for all new employees. Some new employees prefer a more hands-off "sink-or-swim" approach, while others like to be more actively guided, so managers should tailor their approaches to whichever style will work best for the employee.  

Culture, Connection, Contribution

Let's say that a new employee emerges from a successful onboarding process and continues to work for the organization. Company leaders and managers should continue to focus on the employee's needs and expectations to maximize the firm's chances of retaining the employee. 

However, these needs and expectations change across the lifecycle of the employee, Stavsky says. "At two weeks, they are different from what they will be at two years," he explains.

Workers from different generations sometimes have different needs, says Jo Danehl, a retention expert and global practice leader with Crown World Mobility, an international management consulting firm. "Elder Gen X employees are often driven by stability and financial security," Danehl says. "However, in my experience, I see Gen Y to be more interested in company qualities like its approach to corporate social responsibility (CSR) and global citizenship, while also highly focused on their growing career path.

"We're still getting to know the younger generations, but they're adding elements like purpose, communication and overall experience," she adds. "Finding the right balance to each one of these motivations is key to a sustainable culture."

Indeed, many if not most experts cite company culture as a key factor in retaining talent by successfully meeting an employee's expectations and needs. However, exactly what constitutes a company's culture can be hard to define. "Culture is one of those catchall terms, a nebulous term for the feel and experience of working somewhere," Stavsky says. 

A company's culture is created through experiences that employees have with peers, managers and executives. And maintaining a positive employee experience is a highly effective retention strategy, says Greg Stevens, an industrial/organizational research consultant with Globoforce. "The key to that is a more human workplace," explains Stevens, who also spoke at the SHRM 2018 conference. And culture is one of the three pillars of a more human workplace, with connection and contribution being the other two, he adds. All three pillars support successful retention.

Connection, the second pillar, is supported in two ways. One is through positive and productive relationships with coworkers, Stevens says. The other involves work-life balance, so that the employee is not overwhelmed by work but stays connected with his or her life outside of work. This means that job responsibilities cannot be 24/7; there is enough flexibility to "offer chances to recharge and disconnect," he explains.

Thus, even meaningful work done in a workplace with a positive culture can become too all-consuming, and this can work against retention efforts because the employee may look for a position that offers more time for personal matters. "We all have lives outside of work," Stavsky says. "You want to have balance, and the autonomy to live it effectively."

The third pillar, contribution, can be supported by careful efforts by management to find out where an employees' abilities are especially strong, and then to make good use of them. "To retain talent, a company has to identify and capitalize on the skills of its talent," Danehl says. "It is critical to articulate skills … and show that the contribution is valued."

However, sometimes managers fail to do this because they are fixated on improving what they consider to be the weaknesses of the employee. "Let's think about how we develop talent. A lot of focus is put on areas for performance improvement, while the areas of strength remain largely untouched," Danehl explains. "How much better would it be for both employee motivation and retention to leverage employee skills—which are, after all, why they were probably hired in the first place," she says.

Power Should Seek Truth

Another key factor in effective retention is opportunity, experts say. Employees need opportunities to grow as an employee and opportunities to advance their career.  

Danehl says that all thriving company cultures boast two attributes—effective leadership and opportunity. "Retention will suffer if these two qualities are not positive, present and evident in the workplace," she explains.

In Robinson's view, once a career plan has been sketched out for an employee, managers should continually help the employee support it by assigning them to strategic projects or rotations and giving them opportunities to showcase their ideas via new platforms. "Train your managers to be good career developers," Robinson says.

Finally, the Retention Report finds that effective employee retention strategies must be built on accurate knowledge and understanding of employees needs and expectations. "Employers must not limit the extent to which employees can express their ideas, preferences, expectations, and intents," the authors write.

This means that managers and company leaders should "ask for feedback in a way that brings out the truth," according to the report. So, employees should not only be asked to rate aspects of their job and the workplace on a numerical scale of 1-10. They should also be asked why they rate as they do, what improvements they would like to see, what is important to them, and more.

"All managers and companies should know why their employees join, why their employees stay, and why their employees leave," Stavsky says.    

Mark Tarallo is senior editor of Security Management magazine.

This article is adapted from Security Management magazine with permission from ASIS © 2018. All rights reserved.


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