What are the 5 main drivers of employee retention

3 of March, 2021

Employee retention is harder and harder. The labour market is increasingly demanding for employee and employer alike. And even though more and more people in the West attend higher education, the best employees are hard to retain due to increasing demand. Employees are looking for new challenges instead of incorporating a company culture fully.

In this guide we show the basics of employee retention. You want to keep high performing leaders in your company for a prolonged period of time. With a retention plan we will show you how to retain your top performers. No, it is not just a question of throwing them more money. Its also a question of good management practices. It is also up to HR to ask employees the right questions to understand their long term future.

Why is employee retention a challenge

Often managers think keeping employees is a question of money. Yet studies have show that money is only a side issue compared to the real reason employees usually move on : poor management and working conditions. Pay is also a factor, as is family life and commuting times. But unhappy employees often look back and say they would have stayed but for a bad boss or a dead-end career trajectory.

You need to look into the factors outside of pay that explain your employee retention rate. Employees might have issues regarding feedback, the structure of the company, their career progression or any other doubts that you can control.

Employee retention is also going to be a challenge with the retirement of the baby boomer generation and the increase in demand for high skilled employees. The talent pool of graduates may have increased. However, many have found it hard to enter the job market and take the place of the previous generation.

Another factor is that the new generation has different standards than the older one. Often the idea of staying in one company or one location for 30 years, as the previous generation sometimes did, is not attractive to them.

How can I keep my best employees?

To keep your best employees, you need to have a succession plan in your company. You can start the succession plan by looking at your competency matrix and work from there. The succession plan looks at who your talent is across the company hierarchies and sets out a plan to promote them gradually. Your performance matrix should make the distinction between achievement and potential. A succession plan looks at employees with high potential and asks itself how it can retain these and make them perform better and rise to leadership positions in the company.

After you have a succession plan in place, you need to keep in mind the concrete steps you need to take to retain the best employees. These steps are free of cost, except that of your time. Make sure you allocate time on each of your directs using a time tracker. This is especially useful if you feel you are neglecting your directs that work remotely.

Tips for employee retention

• Have monthly meetings about the long term future of the employee. These are vital and they allow you to get away from any tunnel vision regarding the employee’s future project. Instead, you focus in these
• Give them clear achievable goals for their professional development. Studies have shown that a goal-based approach to developing employees is much more effective that a pat on the back
• Feedback should be constructive, not punitive. You should show enthusiasm in wanting to teach directs more about the company and its product or service.  Make them understand the office politics within the company if applicable too.
• Don’t concern yourself about employee turnover too much. Employee turnover is a metric related to employee retention but its not the be all and end all. The key is to focus on keeping a small amount of high performers within your company, who display loyalty to the company for a number of years.

Finally, you need to talk to management, and if applicable, start employees off on a new location, discipline or project. Young people increasingly want to discover new possibilities and might opt for adventure over stability. This leads to their performance stagnating. Not all companies have several locations. But you can do is encourage your higher management to allow your high potential direct to go on a course in another country or simply take up new responsibilities.