Employee retention: Definition, relevance & measures

Finding talented employees who also fit in really well with the team is like winning the lottery. Once you have found them, you should try to keep them, because they are your company’s most valuable asset. In this article, you can find out why this is the case and what measures you can take to retain qualified specialists in your company in a smart way.

What does employee retention actually mean?

The term employee retention describes the loyalty, or more precisely the emotional bond, that an employee develops with the company they work for. It goes without saying that a company has to make an advance contribution to this bond and work on it continuously.

Employee retention is one of the most important tasks of HR management. The aim of employee retention is to make employees feel valued and to ensure that they feel comfortable in the company. In return, the company gains the opportunity to have a long-term, committed team member whose work makes a significant contribution to the company’s success and attractiveness as an employer.

Why is it so important to retain employees?

Happy employees are and remain the golden key to a company’s success. Why? Quite simply, the more your employees feel valued, the more motivated they are. This applies to their daily tasks as well as their aspirations for further development in your company. Good employee retention leads to employees remaining loyal to the company in the long term.

Qualified specialists provide a positive corporate image

This status is the ideal, as it means that acquired knowledge and expertise remain within the company. Any investment in employee development also benefits the employer, as the costs of recruiting and training new employees are eliminated for an indefinite period of time. At the same time, qualified personnel give you a good external image – also known as employer branding – both with future applicants and with your customers. This is because long-term employees continue to convey the image of competent managers and a flourishing, great company.

Employee loyalty means mutual trust

In addition, good employee retention automatically leads to your workforce trusting you and your decisions. A good atmosphere in the teams and between employees and managers is proactively promoted. This makes it possible to know your staff not only on paper, but possibly also in person. Employees are much more likely to express their wishes and concerns, contribute ideas and thus actively participate in the development of the company.
And who doesn’t want that? Because that’s how potential is unlocked.

Good employee retention: advantages at a glance

• Increased commitment = high productivity
• Low fluctuation rate
• Good employer branding
• High recommendation rate
• Savings in personnel costs (dismissal, recruitment, training, etc.)
• Positive working atmosphere
• Opportunities for innovation from within the team

The six pillars of employee retention

Unfortunately, there are still plenty of companies that underestimate the importance of employee retention measures. They may (still) have enough skilled workers, but they are not reaching their full potential. They are often already looking for another job. So it’s best not to let it get that far in the first place.

The following six pillars show you what you can do specifically to promote employee loyalty:

Pillar 1: Working environment

On the one hand, the working environment includes the right work equipment and, if necessary, work aids that support the employees in their tasks. On the other hand, consideration should also be given to what measures can be taken to promote the working atmosphere and team spirit. Larger-scale measures such as childcare or the option to work from home are also a big plus, as they often relieve parents or pet owners of a lot of stress.

Employee retention measures

• Current work utensils (laptop, office supplies, etc.)
• If necessary, work aids (e.g. height-adjustable table, ergonomic office chair)
• Free catering (e.g. water, tea/coffee, fruit)
• Social rooms for employees (e.g. company canteen)
• Screened rooms/places for quiet working
• Team events, company parties
• Flexible working hours
• Possibility of home office/hybrid work/remote work
• Job sharing
• Other various measures to create a positive working atmosphere (e.g. Feel Good Manager)

Pillar 2: Further training

Employees want to develop professionally and personally – encourage this proactively. Because it is one of the best investments you can make. The benefits of this are reflected in a motivated workforce, your image and also in your sales results. What’s more, the know-how you acquire stays with you in the long term.

Employee retention measures

• Seminars
• Coachings
• Trainee positions with the possibility of being taken on
• Job rotation
• Individual target agreements (e.g. semi-annually or annually)
• Promotions
• Possibility of temporary work at other company locations

Pillar 3: Health

According to studies, satisfied employees are less likely to fall ill. Those who don’t enjoy going to work or have to ask themselves every day whether they are appreciated experience stress, which has a direct impact on motivation. From both a human and a business perspective, implementing this point should be a matter of course for every company anyway.

Employee retention measures

• Company doctor
• Company health management
• Sports facilities at the company (e.g. internal gym, fitness courses, regular running groups)
• Health courses
• Nutritional advice
• Mental health coaching
• Job bike
• Financial support for external fitness/health courses
• Possibility of a sabbatical/unpaid vacation days
• No overtime or possibility of compensation for overtime

Pillar 4: Employer branding

The fact is: in order to continue attracting top applicants in the future, you need an excellent image as an employer brand. After all, who isn’t familiar with rating portals such as kununu & Co. that give employees the opportunity to rate their current or former employers openly or anonymously. In principle, it’s simple: the more satisfied your employees are, the more likely they are to recommend your company to others. This polishes up your image:

• Onboarding measures
• Employee-recruit-employee programs
• Customized job advertisements
• Your own career page on the web
• Collaboration of employees on the career portal (e.g. voluntary experience reports, video clips about areas of responsibility)
• Social media presence as a company
• Simple online application processes
• Brand ambassadors:inside

 

 

Pillar 5: Communication

The basis of any employee loyalty is mutual trust. This is gained through open communication. Companies should only communicate values to the outside world that they live by internally. A clear mission statement is the centerpiece that employees can then accept, represent and act upon.

Employee retention measures

• Clear mission statement
• Living the corporate culture
• Transparency in the internal communication of errors, values, figures and developments
• Intranet (possibly with direct communication option)
• Living work-life balance
• Sustainability management
• Social Responsibility

Pillar 6: Social benefits

There are social benefits that are prescribed by law, such as the employer’s contribution to social insurance. Collectively agreed benefits include, for example, travel allowances. The third category, voluntary social benefits, do not have to be paid, but are often the well-known icing on the cake of optimal personnel support. When it comes to sifting between two companies of choice, they often play the decisive role.

Employee retention measures

• Bonus payments
• Company cell phone/laptop, also for private use
• Company car
• Company pension scheme
• Travel allowances
• Participation in company shares
• Vacation pay/Christmas bonus
• Financial assistance in the event of marriage, birth, death of a relative or relocation
• Discounts with partner companies (e.g. vacation trips, events, shopping)

Conclusion – What role does Teamhero play in your employee retention measures?

We now know that the better your employee retention rate, the more loyal and motivated the people who work for you will be. In addition, satisfied and long-serving employees are the hallmark of a capable management team.

How well do you really know your employees? Software that connects.

However, in order to know which employee retention measures make sense for your employees, you need to know them in the first place. Where do they come from? How long have they been working for me? Where do they live? What do they want? Personnel-intensive companies in particular, such as staffing or hostess agencies, security services, the manufacturing industry or trade fair operators, face an even greater challenge in finding software that allows them to keep track of their large number of employees and freelancers.

It was precisely these companies that we focused on when developing Teamhero. As a customized HR software solution, Teamhero is the solution for modern personnel management. Our tool can also be used for communication and live time recording. It is easy to use and does not require IT experts.

Sounds good? If you like, why not try Teamhero for free or get in touch with us.