Strategies to Boost Employee Retention Even During Economic Uncertainty

When leaders feel uncertain in challenging economic times, they depend on trusted colleagues and peers to help them find direction and solutions. They meet one-on-one or in groups to share knowledge, experience, and advice. When leaders are uncertain, so are employees. But where can employees go for information and support? They turn to you.

During times of uncertainty, it’s more critical than ever to become the best leader you can be. Your people need your support on a human-to-human level. Make time to talk to them and understand what they need and want from you and what they expect from their workplace. Help employees know who you are as a leader and be comfortable sharing with them where you have failed in the past and what your vision is for the future. Use your soft skills to model and spread genuine empathy, respect, kindness, and flexibility company wide.

As a leader, one of your most important jobs is to provide as much clarity and transparency as possible to help your people manage their own uncertainty and personal challenges. In an environment where everything is continually shifting, where do you plant your feet? I strongly believe the most important way to find that footing is by strengthening your retention strategies.

We’re all trying to figure it out. When we do, we’ll emerge from these turbulent economic times and current revolution in how and where we work stronger, better, and more prepared to grow.

Benefits of High Retention

Despite the adage, “the customer is always right” and all that it implies, retaining your people is the biggest factor in retaining your clients. Treat your people well and they’ll provide outstanding service that creates customer loyalty. Put your people first, before anything else, and they are highly likely to stay.

A high employee retention rate benefits many aspects of your business, saving money and increasing profitability by:

• Increasing productivity
• Lifting morale
• Preserving institutional knowledge
• Enhancing your employer brand
• Increasing engagement
• Reducing recruitment and training costs
• Maintaining the quality of your product or service

A comprehensive employee retention strategy is a key differentiator in competitive talent markets. It’s also a critical HR metric in understanding the strength of your culture. Building on one another, this long list of benefits helps make you a great place to work.

Achieving the Ideal

The average U.S. retention rate is estimated to be 90 percent, although rates vary by industry, sector, department, position, and other factors. Since 100 percent retention is impossible to achieve, and a certain amount of turnover is beneficial in terms of bringing in new perspectives and fostering innovation, aiming for 90 to 95 percent retention is typically a good goal.

Recent Gallup research finds that turnover risk is exceptionally high, with 51 percent of employees watching for or actively seeking a new job. The top reasons people leave their employer can be classified into two large categories: engagement and culture (37%) or wellbeing and work-life balance (31%). Combined, these two categories represent 68 percent of the primary reasons people leave their jobs. This means four times as many people quit for something other than better pay and benefits, which represents 16 percent of the total. 

Given that increasing compensation is not the only or necessarily the best way to keep your people, what should you do to retain them?

Retention Strategy Is a Long Game

When it comes to anything related to people, nothing stands alone. People bring whatever is going on in their lives with them to work along with their professional needs and ambitions, and personal preferences and characteristics. We hire the whole person with all their complexities and relationships.

Similarly, people are attracted to your company, and stay, because of the totality of what your company represents: your purpose, values, culture, leadership, and reputation along with competitive compensation and flexible work options. Today, employees expect much more from you than a paycheck.

Strategies must be all-encompassing and at the same time be dynamic to keep pace with the times. Your long game should always be to make certain your company is an irresistibly great place to be. The longer someone is with your company, the more productive they become over time.

Here are a few things to keep in mind when considering the relevance and effectiveness of your retention strategy:

Retention begins with recruitment. Take advantage of the many tools available to help ensure that you not only find people with the skills you need, but who also have the right culture fit and attitude to succeed in your company. (Assessments and AI are two of those tools.) Hire for fit first and competency second. Company-wide morale can take a deep dive based on the attitude or behavior of a single person.

Make sure leaders and managers alike are aligned in putting people first. This means listening, communicating transparently, and showing empathy and concern for the well-being of people before anything else must be embedded in your culture.

Be intentional in how you design your workplace culture. People universally respond to environments where they can develop respectful, trusting relationships with leadership and colleagues—where they are inspired, fully engaged, and appreciated. People choose to work in the places they want to be.

Create a personalized value proposition for employees and follow through on it. Understand what people are looking for in their career and from you. Provide ongoing education and development as well as a clear path to advancement. Retention is about fixing dissatisfaction as well as providing future opportunities. Check out our resource for Cultural Alignment and Employment Branding.

Make certain communication flows two ways. Clarity, transparency, and feedback are the bedrock for high retention. Effective communication helps ensure people at all levels have the information and support they need to reach their full potential.

In Sum

Your people are your golden goose. You’ve invested heavily in them. Retaining your talent is the most important thing you can do to ensure your long-term sustainability and success as an organization. In the midst of economic uncertainty, develop a strategy that inspires and motivates people to stay and do their best work.