Employee Retention: Definition & Strategies

Instructor: Allison Tanner

Keeping employees is important to building a strong company. This lesson defines employee retention and describes various ways that companies can keep their staff engaged.

Employee Retention

Bob loves the catering company he works for! He enjoys going to work everyday, he feels that he adds value to the organization, and he notices that it is rare for employees to quit! Bob's company likely has high employee retention, which is the ability to retain, or keep staff hired.

Because companies recognize the high cost of training new staff, they often utilize retention strategies to keep ahold of good employees. Imagine having to train new staff every few weeks! Not only would this be extremely costly for a company, it might also damage the quality of service that they provide to their customers.

So what makes Bob so happy in his position?

Great Pay

Although money isn't everything, it certainly matters! Bob is just a server, but he makes several dollars an hour above minimum wage. Good pay helps motivate Bob to work harder, and he never feels like he is under paid.

When a company pays their staff a decent wage, employees are more likely to stay with the company. Paying workers well can increase the chances that they will feel valued and as if they are an important part of the team. Consider that because Bob makes good money he is happy to put in extra effort, and he has no interest in looking for a new job, even when he has a bad day!

Value Staff

Imagine that Bob felt he could be easily replaced. Then money might not matter as much. Thankfully, that isn't the case, and Bob's catering company makes sure to value staff. They take extra time to recognize hard work and let each staff member know that they are important to the company.

Sometimes this is just an announcement at the staff meeting that ''so-and-so'' did a great job last night, but it helps to create a valued environment.

When staff feel that their work is recognized and valued, then they tend to be more satisfied with the company that they work for.

Company Environment

How you feel when you walk in to work is very important. No one wants to dread waking up for work or spending hours with their colleagues. On top of great pay and feeling valued, Bob wants to stay with this catering company because he really enjoys going into work. A positive environment makes him and his colleagues want to continue working with the company.

Companies that create a good company environment are more likely to keep their staff. The office that Bob's colleagues work in is bright and has comfy couches. The overall environment, including managers, is also great! With this company, work is always fun. Even under high stress, everyone stays calm! Bob's boss is a serious person, but also light hearted, so everyone feels comfortable.

Opportunities for Growth

In Bob's company, there are also opportunities for employees to grow. Someone who starts as a server and shows initiative can easily become lead server, supervisor, or manager within the company. In fact, the company prefers to promote from within.

When there are opportunities for growth and staff feel like they can advance, company retention rates increase. Few staff want to stay in the same position forever without the potential to grow into advanced positions with better pay.

Bob knows that there are plenty of opportunities for him to grow. Even if he is just a server now, he may be a leader later. His catering company even offers management training classes.

Employee Incentives

Bob's company also offers perks or benefits to keep their staff engaged and excited about working for their company. This is known as employee incentives which can range from training to vacation packages.

Common employee incentives and benefits, often mandated by law, include:

Vacation time
Paid time off
Sick pay
Insurance packages

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Employee Retention: Definition & Strategies