March 31st, 2023 · 5 min read
Retaining top talent: 5 ways to upgrade your approach to talent retention
The business case for talent retention is strong — the longer you can retain your top performers, the more money your business saves on hiring and onboarding costs. Plus, there’s significant value in the institutional knowledge that comes with tenured employees. The longer someone stays with the company, the more knowledge they have about the business, which allows them to be more productive. Compare that to a new employee that can take weeks or months to ramp up.
While retention has always been a priority for people teams, recent employment trends highlight the need for companies to evolve traditional retention strategies to meet the demands of today’s workforce or risk losing out on talent to competitors.
Let’s take a look at why traditional approaches no longer deliver to the level needed and how you can refocus your current retention strategy to deliver what today’s employees want and value most.
Where traditional talent retention strategies fall short
For the first time, five generations make up today’s workforce. Your tried-and-true approaches to retention that were successful before may not be enough to address the needs of Millenials and Gen Z.
In the past, standard benefits, adequate pay and promises of perks such as break room snacks or ping pong tables might have been enticing enough to keep talent around. But a growing number of workers, especially those in younger generations, are expressing motivations for leaving employers that fall outside of what you might expect.
While it’s true that factors such as competitive pay are still important, other things such as opportunities for growth, access to education, meaningful work and corporate social responsibility have more weight attached to them. To be most effective, your retention strategies should reflect the priorities of your workers.
Top drivers of talent retention for the modern workforce
To have an effective retention strategy, you first have to understand the wants and needs of your employees and what factors drive them to stay with a company.
Here are a few emerging factors shown to influence employee retention:
Opportunities for learning and education
In a study of 3,300 workers, 94% said they would stay at a company longer if it invested in their learning. These opportunities are enticing because they enable skill-building and career advancement but an investment in learning also shows your people that the company truly cares about their growth and success. Building this type of emotional connection to your people drives engagement and retention.
High value on workplace diversity, equity, inclusion and belonging
Today’s workforce is the most diverse workforce in US history and employees are looking for organizations that mirror that. In fact, 76% of workers say that diversity is an important factor when considering companies and job offers.
A positive employee experience
There are countless factors outside of someone’s day-to-day responsibilities that influence the overall employee experience. Things such as access to working technology, having a clear understanding of goals, feeling kept in the loop by leadership, relationships with colleagues and managers, and believing that their company cares about their personal well-being. All of these factors are not directly tied to the tasks required of a job, but they can still have a big effect on engagement and retention.
Commitment to well-being and work/life balance
More than 40% of Gen Z and Millennial workers say they feel stressed or anxious most or all of the time. While companies can’t manage employees’ stress levels, they can foster a supportive work environment by de-stigmatizing mental health issues, providing resources for mental and physical well-being and empowering employees and their managers to prioritize work/life balance.
Read more: When evaluating your current talent retention strategy, make sure to also revisit the employee retention metrics that you're tracking.
Common talent retention best practices
If your retention strategy has served you well for the past few years, you don’t need to completely reinvent the wheel. But you may want to take a close inventory of what’s still working well and address areas that have plateaued or aren’t delivering to previous levels. Even small upgrades — if they reflect your workers' values and priorities — can move the needle on retention.
Here are a few common talent retention tactics that you might already be familiar with and advice on how to upgrade them:
Nurture learning and development
An effective L&D strategy can be a powerful driver of employee engagement and retention. To be successful, L&D opportunities you offer have to be clearly communicated, highly accessible and flexible for any schedule. The most effective education programs include both access to training/upskilling courses, as well as education assistance.
To upgrade your approach:
– Shift to workforce education, which offers prepaid tuition for employees, making it significantly more accessible than traditional tuition reimbursement programs.
– Budget for employees to attend conferences and other trade events. Not only does this keep your employees up to date on the happenings in your industry, but it can also help people feel recognized and valued.
– Nurture on-the-job learning through mentorships and talent marketplaces. Connecting employees with others in the organization fosters relationship-building and cross-functional learning.
Recognize employee achievement
Recognizing employees for their hard work and dedication is a tried-and-true tactic that should continue to be part of your strategy. Finding monetary and non-monetary ways to give praise helps to boost morale and keep employees engaged.
To upgrade your approach:
The best way you can recognize employee achievement is by hiring internally as much as possible, and rewarding effort with actual opportunities for growth. By coordinating learning & development with paths for advancement, you can reward employees with promotions or the ability to make horizontal moves to other teams. This approach empowers your employees to forge their own career paths and explore their interests and passions.
Demonstrate a meaningful commitment to diversity, equity, inclusion and belonging
Employees want to work for employers who care about more than just generating revenue — they want to work somewhere that's committed to DEIB. Making public promises to change isn't enough.
To upgrade your approach:
Set action items concrete initiatives for DEIB, such as tying executive bonuses to DEIB outcomes, developing employee resource groups or bringing in external experts.
Rethink employee benefits
Benefits such as healthcare, paid time off and breakroom snacks have quickly become the bare minimum. Top talent expects more — and your offerings affect both recruitment and retention.
To upgrade your approach, offer:
– Flexible schedules, with an option for remote or hybrid if possible
– Invest in employee learning and development that opens doors for career advancement
– Implement paid family leave for new parents, eldercare or extenuating circumstances
– Provide wellness benefits for employees and their families
Re-evaluate your social contract
A recent survey showed that 95% of employees believe businesses should benefit all stakeholders — not just the C-suite and shareholders, but employees, customers, suppliers and their communities. Corporate responsibility comes in many forms, from environmental and sustainability initiatives to workers’ rights, and employees want to be involved with things that matter to them. Doing so brings a sense of agency and purpose to their work, increasing engagement and retention in the process.
To upgrade your approach:
One of the easiest ways to show you value your employees’ opinions is to simply ask — and then act. What does your company stand for, and how can you make it better? Your employees know the answer to this and you can tap into their ideals and collective experiences to develop initiatives and policies that lead by example.
Retaining employees today and in the future
People have always been a company’s greatest asset, but retaining them is taking on a new level of urgency in light of today’s rapidly-evolving labor market. To keep your best workers engaged and excited, check to see if you’re addressing the issues most valued by today’s workforce, such as education opportunities, DEIB, manager support and work/life balance.
If not, it may be time for a strategy upgrade. What worked yesterday may need to change for success tomorrow. When you bring traditional retention strategies in line with employee expectations and provide them the tools they need to succeed, you’ll win on retention every time.
Retaining top talent is even more important during times of uncertainty: Download this interactive e-book to learn how to recession-proof your business and keep your top talent by offering opportunities for skills development.
You can address talent development challenges
See how a partnership with InStride can meet the challenges of tomorrow, with action today.