The expansion of remote work and global hiring made finding suitable candidates for many roles easier. But at the same time, it made it more challenging for HR and business leaders to retain top talent due to a highly competitive global market.
However, high employee turnover can hurt a company’s bottom line, increase recruitment and operational costs, and reduce overall team productivity, which is why two-thirds of HR prioritized talent retention over acquisition in 2023.
If you aim to boost your retention numbers in 2024, this guide to effective talent retention strategies is for you.
Understanding employee retention
Employee retention describes the goal of keeping talented and experienced employees within an organization to foster stability, boost productivity, minimize recruitment costs, and lead to long-term business success.
Optimizing employee retention has several benefits for the company’s bottom line. For example, low employee turnover reduces recruitment and onboarding costs, enhances productivity with experienced staff, and improves customer relationships. Employee retention also lowers training and employee development costs.
Talent retention is significant in a global context where the talent pool is significantly larger, giving employers access to diverse skills and expertise, which introduces innovation to the company. A proactive approach to employee retention gives a competitive edge globally, where organizations deal with diverse cultural and economic challenges.
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Factors influencing employee retention
Employers prioritizing employee retention should focus on a few factors when drafting strategies for improvement, such as:
- Positive and inclusive company culture, which fosters a sense of belonging and commitment
- Effective and efficient onboarding ensures new employees feel welcomed and prepared for their roles
- Competitive pay and relevant employee benefits packages attract and retain top talent
- Flexibility and support for employees’ personal lives, which increases satisfaction in the workplace and reduces burnout
- Employee recognition programs through which you acknowledge and reward employees for contribution, leading to elevated morale and loyalty
- Development opportunities and a clear career path for employees, encouraging them to invest in their future with the company
- Supportive and effective leadership, which encourages trust and strong relationships
💡 Discover the secrets to recruiting and hiring international teams in our webinar.
8 strategies to help you improve talent retention in your organization
Along with employee engagement, retention remains a top priority for companies worldwide. To achieve the goals related to reducing turnover, global organizations should consider different retention strategies—you’ll see eight of them below.
1. Discover the causes of employee turnover
The first step to improving employee retention is discovering the reason for turnover. Begin by identifying the combined organizational and personal factors influencing an employee’s decision to stay with a company or leave.
Organizational factors include common issues such as unfair compensation, limited growth opportunities, or an unsupportive work environment. Sometimes, personal issues also contribute to turnover, such as evolving career goals, personal circumstances, or the desire for a healthy work-life balance.
Human resources can use various tools, such as engagement surveys and exit interviews, to discover these factors, gain insights into employee satisfaction, and better understand their reasons for leaving. By identifying trigger points, you can recognize areas for improvement.
Regularly scheduled one-on-one meetings also offer value, allowing HR teams to proactively identify concerns with current employees and implement changes to improve retention. With various online HRIS tools available, scheduling these check-ins across different time zones is easy and efficient.
2. Invest in employee wellbeing
Global organizations work with a diverse workforce, hiring employees from all around the world. The onboarding experience should be equitable and engaging for all employees, regardless of location, and set clear expectations regarding the role and performance.
Creating a well-structured onboarding program helps new hires acclimate to their roles while instilling a sense of belonging and commitment to the organization. Yet there is no one-size-fits-all approach to meaningful onboarding, and tailoring the process to meet employee needs across different regions goes a long way to ensure that everyone feels valued and supported.
An inclusive onboarding approach helps retain talent by promoting a unified company culture, promoting company values, and ensuring a consistent commitment to organizational goals.
3. Optimize compensation and perks
Appropriate compensation and relevant perks are essential for employee retention, ensuring that all employees are compensated (and rewarded) fairly for their efforts and contributions.
When optimizing compensation and perks for a global team, key considerations include local market dynamics, cost of living, and industry standards. A thorough assessment of these details allows HR teams to offer balanced and competitive pay packages and bonuses that attract top talent and reduce the likelihood of losing skilled employees to competitors.
Attractive benefits are equally important, ensuring that the perks are tailored to the needs and expectations of workers in each location. For example, healthcare coverage, retirement plans, and work-life balance initiatives should align with local regulations and cultural preferences.
There are different options to calculate the compensation, such as basing the value on an employee’s local rates, based on head office location, and based on performance. Read Deel’s guide to employee compensation strategies for more insight.
💡 See also: What is compensation planning?
4. Improve employee-manager relations
The quality of the employee-manager relationship can significantly impact job satisfaction and the employee’s decision to stay with the organization. Managing a global team demands extra effort to touch base with remote team members and ensure they feel involved and valued.
Communication tools, such as regular one-on-one meetings and chat forums on digital platforms, facilitate more open and frequent dialogues between employees and their supervisors.
It’s also important to train managers with leadership and interpersonal skills to understand their team’s needs. For example, training managers to give employees constructive feedback can improve organizational communication, ensuring ongoing conversations that lead to continuous improvement.
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5. Support and incentivize professional growth
Some industry experts, such as John O’Grady, Founder and CEO of O’Grady Leadership Consulting, suggest that employers should prioritize employee growth over employee performance. He suggests that growth encourages a forward-thinking view, encourages psychological safety, and boosts company success in the long run.
When employees are proactively offered a future in an organization, they are more likely to be invested in the company’s long-term success. Offering professional development opportunities, such as workshops, courses, and mentorship programs, is an effective way to encourage professional development and enhance employee skill levels — but it’s not the only one.
Highlighting a path for promotions and offering additional training also indicates that the organization values remote workers and is willing to invest in their future. Other strategies, such as regular performance reviews, provide an opportunity to offer constructive feedback and ensure that employees are on a positive trajectory.
6. Prioritize flexibility
Prioritizing flexibility goes beyond being a key employment retention strategy, as it is also a highly sought-after perk for candidates worldwide. In today’s dynamic work environment, skilled individuals have come to value the ability to work a flexible schedule to balance their personal and professional lives. Relocation is another option that should be considered when building a globally mobile workforce.
Offering flexible working hours and location options becomes even more important when working with global teams where employees are distributed across different time zones and locations. By offering flexibility, it demonstrates a commitment to the diverse needs of employees, allowing them to adjust their work arrangements to suit their circumstances.
Flexibility is a two-fold strategy. It contributes to employee retention by fostering job satisfaction and loyalty, and it also attracts new talent who prioritize a flexible working arrangement.
7. Implement a change management strategy
With increased global connections, the rise in remote work (especially since the pandemic), and digitalization, the business landscape is rapidly changing. All businesses can benefit from a change management strategy to streamline global mobility. Fast-growing startups and large enterprises undergoing digital transformation are particularly well-positioned to take advantage of this strategy for improving employee retention.
Change is inevitable, and employees need support and encouragement to facilitate transitions easily and efficiently. Effective change management strategies prioritizing clear communication, empathy, and confidence empower leaders to provide guidance and address concerns.
Strong leadership mitigates uncertainty that accompanies change and contributes to a positive work environment (and improving employee retention).
8. Create a safe environment
Creating a safe work environment, both physically and psychologically, goes a long way in retaining employees. Prioritizing psychological safety improves employee satisfaction and contributes to a healthy workplace culture.
When an employee feels free from judgment, harassment, or discrimination, they are more likely to share their ideas and provide constructive feedback (even to their managers). Open communication contributes to better decision-making processes while encouraging trust within the organizations.
Prioritize clear communication, enforce safety protocols, and promote a culture of respect and inclusivity to create a safe work environment.
How to measure employee retention
Measuring employee retention goes beyond just turnover and retention rates. It includes a broad range of metrics and indicators that provide a more comprehensive view of the organization's ability to retain and engage its workforce.
Examples of these metrics include:
- Tenure rates: The average length of time employees stay with the company indicates overall retention trends.
- Flight risk predictions: Use data to determine which employees are most likely to leave soon and incorporate proactive retention efforts.
- Engagement data: Surveys and employee feedback help gauge job satisfaction, the employee experience, and motivation levels.
- Promotion rates: The frequency at which employees are promoted within the organization indicates growth opportunities.
- Turnover reasons: Exit interviews reveal reasons employees leave, exposing weaknesses in the employee retention strategy.
Segmentation allows for a comprehensive understanding of different employee groups, allowing HR teams to tailor retention strategies based on their unique needs and preferences.
Implementing effective retention strategies demands time and effort. HR technology helps efficiently track and analyze, enabling organizations to make data-driven decisions, enhance employee retention strategies, and optimize overall workforce management.
Deel: HR technology for employee retention
While complex retention programs are often perceived as the solution to reducing high turnover, it's essential to recognize the role of managers in fostering a positive work environment. Meaningful employee relationships are equally, if not more, important to other practical retention efforts in a global business.
Deel is a robust HR platform that integrates with other global HR and payroll tools, empowering managers and HR teams to streamline the retention process and gain valuable insights into retention metrics. It offers a range of features— such as onboarding, one-on-one meetings, and benefits management—to help retain global employees.
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