Employee Retention: How To Beat The Odds and Keep Your Best Employees Around Longer

If you’re like 63% of employers, your top priority isn’t increased sales or finding more customers. It’s employee retention.


Maybe that doesn’t surprise you, but it probably surprises some. After all, isn’t business all about sales and customers? Isn’t it all about bringing money in?

Yet successful business owners know that their most important asset–the one thing that has a positive impact on sales and customers–is their employees. Constant employee turnover is expensive, and it is also a turnoff for your customers. Customers form relationships with the employee helping them. They don’t want to keep starting over.

You want to keep the good employees. You want to keep the talent you have. You want to capitalize on the training you’ve provided. You want to build on the experience and inside know-how of those long-term employees.

And here’s how you do it.

Be A Good Manager

Don’t be a jerk. Don’t be a micromanager. Don’t be indifferent, aloof, out of touch, or condescending. And don’t be a friend. Be a leader.

If you or your managers struggle with leadership ability, then by all means, be proactive and work on improving your people management skills!

Bad managers are a dime a dozen, unfortunately. A bad manager:

  • Dictates instead of communicates.
  • Uses a “do what I say, not what I do” path of leadership.
  • Sticks her head in the sand and hopes problems just go away on their own.
  • Pits one employee against another through competition or unresolved discord.
  • Has built distrust through broken promises and lack of follow-through.
  • Creates a culture of opacity instead of transparency, purposefully keeping things hidden from employees to keep them guessing and unsure of their status.
  • Shows up unprepared and couldn’t plan his way out of a paper bag.
  • Wastes precious time through frivolous meetings, procedures, and systems that get in the way of employees who are trying to work.

Hopefully, you didn’t see yourself in that list! In contrast, a good manager:

  • Leads by example, actually doing what they say they will do, and abiding by the same rules the rest of the team must follow.
  • Is willing to learn, whether it’s technology or the culture of the new generation. This demonstrates a manager who is willing to work as hard as the team, and who won’t let the team become stagnant because he won’t let himself become stagnant.
  • Follows from the front, meaning that she wants her team members to succeed, and is willing the help them do so by leading in a way that doesn’t only look out for her own success.

Some of the worst employee retention problems stem from management and leadership conflicts. These problems are tough to root out without the manager being willing to take on some humility and find out what’s going on. I list this one first because if you don’t get this right, all of the rest are merely band-aids to this foundational problem.

Provide Employee Development

Every employee should have a path of growth possible. When employees feel like they’ve hit the wall and there’s no chance for anything better, they start looking for a new job.

Dead-end jobs exist, yes, but even those dead-end jobs that have no promotional opportunities can still have raises, and can still lead to individual growth. Every employee can be given the opportunity to:

  • Learn something new.
  • Attend a conference.
  • Have a reading allowance.
  • Have schooling partially paid for.
  • Have on-the-job training or technical skill refresher courses.
  • Participate in meetings with the whole team with special speakers and training geared towards teamwork.
  • Train or teach fellow team members.

Employee development keeps the relationship between management and employees a positive one. Employees feel valued (you are, after all, investing time and money in them) and managers, believe me, you want employees that feel they are valuable. When they feel undervalued, they start looking at the door.

Jobs with promotional opportunities have obvious development and training built in. The challenge is to find a way to give this to all employees even in jobs where it doesn’t seem required for the position.

Keep Your Employees Engaged

Work should have something fun about it. It can’t be all drudgery. There has to be relationship and a sense of team because that’s what makes the day bearable.

Keeping your employees engaged is part of this.

In some ways, professional development could fall into this category, but there’s more to it than just professional training. Ask yourself:

  • Do your employees have the opportunity to socialize on the job? After hours?
  • Do you have an identifiable workplace culture?
  • Do you have a tangible workplace tradition?
  • Do your employees know that you value them and will show it tangibly?
  • Do you give employees the chance to impact their community positively?

Employee engagement is how you keep a job from being drudgery, turning it into something bigger than the individual and bigger than the task. It’s about team and culture and purpose and relationship.

Reward And Recognize

Every person wants to be recognized for doing excellent work. That’s how most of us are motivated. A workplace that doesn’t recognize and reward its employees is a workplace that can’t keep them on the job for long.

Financial rewards and raises.

Using raises and other financial carrots on a stick when you get wind of a dissatisfied employee can set you up for failure.

For one thing, you run the risk of your team seeing that they can get a raise if they threaten to leave. But, more importantly, you’re probably already too late. You might keep an employee a little while longer if you throw some money at them, but unless more money was the sole reason they were thinking about leaving, it won’t be enough to keep them for good. And if they have another offer, you’re way too late.

Startup writer Jason Lemkin has good advice: always pay market or above as soon as you can afford it. Lemkin limits this to your “great” employees, but I would suggest doing it for all of your employees. Hopefully you are doing well enough with hiring (which I’ll cover in a bit) that you don’t have problem employees that should be excluded from Lemkin’s advice. If so, all of your employees ought to be paid with this approach from the get-go so that you don’t get a reputation as being a cheapskate.

Recognition of good work.

Regularly recognize excellence in work, and reward that.

This doesn’t mean you have to hand out plaques every month (in fact, I’d suggest something a bit more useful). Rewards shouldn’t only be about filling a quota (i.e. “we have to have an employee of the month because we always do”), but should be about you truly keeping an eye out for work excellence and rewarding it.

Want to show your best employees a little appreciation for their hard work? Try our free Employee of The Month Certificate Generator now! You can also create certificates for general achievements, employment anniversaries, promotions, and other types of recognition. Click here to try it now

Highest sales. Customer compliments. Great new idea. Solved a tech problem. Find ways that your employees are making your business and workplace culture better, and recognize it.

Ask About And Measure Your Employee’s Satisfaction

You can’t get an accurate picture of how your employees feel about their work without specifically ferreting out and measuring that employee satisfaction information.

Communication with each person is vital. Team meetings and casual water cooler conversation aren’t enough.

Regularly, throughout the year, have a meeting with each employee and avoid giving it some fearsome name such as “employee review.” Have your employee reviews, sure, but keep these other types of communication meetings a less stressful affair.

Ask the employee how things are going. Find out if there are any frustrations. Learn about the things they want to be doing but aren’t able to do in their job. Ask them for their ideas and suggestions. Dig deep to find out what they deal with every day on their job that makes it great or tiresome.

Do this individually with each employee. Team activities, parties, social gatherings and other such conversation-laden events aren’t going to give you the true picture.

Surprisingly, the employees that aren’t quick to complain are the ones you should often keep an eye on. Just because they aren’t vocalizing problems doesn’t mean they aren’t experiencing them. They are most likely to be the employees that turn up one random day and turn in their notice and shock everyone.

Be proactive about finding out, from each individual person, how things are going and what needs to be changed.

Hire The Right Employees In The First Place

Some employee retention advice suggests that you ought to be able to identify your top employees so you know which employees you should focus on retaining.

Let’s take that a bit further.

I suggest you only look to hire employees you want to retain in the first place so you don’t even need this step. Understandably, it’s not a perfect world where every perfect employee shows up at your doorstep, but the goal should always be to find the right employee, not just a “good enough” employee.

When hiring, look for:

  1. Skills, personalities, and abilities. The employee’s skills and abilities should be a good match for the job. Anything that exceeds or is less will create frustration. Granted, some skills can be taught, so keep an eye on personality and abilities that translate well into the training programs you have.
  2. Expectations and personal goals. If you’re hiring hourly employees, find people who are truly looking for hourly work. Hiring an employee who only views the job as a stop-gap measure until something better comes along isn’t ever going to work out for you in the long run. If an employee is looking for promotional opportunities, don’t dump them in a job without them.
  3. The longevity of the hire. There are other things to look for when hiring (reliability, references, work history, etc.), but don’t forget to consider how the employee will fit the team and the job with an eye to longevity of the hire.

Hiring is not ever an emergency (“we gotta fill this position now!”) because when it is, it will always be an emergency. Your employees will constantly be leaving because you’ll be hiring to fix the emergency and not to fit the job.

Keep An Eye Out For Transitional Employees

Not to suggest that you become paranoid, but a good manager keeps tabs on the pulse of the team.

Some employees are already interviewing.

Is there a team member acting odd, maybe leaving during odd hours during the work day, or taking hushed phone calls?

There’s a chance that employee is interviewing for another job.

Don’t worry — it’s not too late! Sometimes employees, out of frustration with a situation at their job, pursue interviews simply to see what else is available and to give them a sense that they have options.

Pay attention to them. Meet with them. Take them out for coffee. Find out what’s wrong. Do it in a non-defensive or aggressive way. Remember, the employee is not your enemy. You want to keep her. This is not the time to make threats or do anything that sends a merely considering employee into a full-fledged I’m-outta-here employee.

Some employees are already disgruntled.

Handling a disgruntled employee is not an easy thing. However, gone unchecked, a disgruntled employee can spread attitude poison to the other employees. There are two parts to dealing with this:

  1. Retaining the employee.
  2. Getting rid of them.

Seems obvious, but you need to approach these in order. Your first step is to find out what’s wrong to see if you can fix it. After all, you want to retain employees and a disgruntled employee can still go back to being a great employee.

But if the problem can’t be fixed?

The employee must go. They will only cause more problems in the workplace if they stay. It’s better to lose one employee than many.

Find Out What Went Wrong

When employees leave, an employee exit interview is the way to discover what caused them to go. Only with an exit interview can you learn what needs to be changed and how you can prevent future employees from leaving for the same reasons.

Why are exit interviews so important?

If they’re done correctly, people are often far more open and honest than they were during other job review conversations. They’re already leaving and don’t have to worry about repercussions, so they feel freer to talk to you about what needs to be changed and why they are leaving.

Not only do exit interviews tell you why the individual left, but they might be the only way you can discover bigger problems or issues that need attention within the team. Exit interviews are a must.

Unless you are a multi-million dollar corporation with thousands and thousands of employees, you must retain your employees. They are not easy to trade and exchange when you are functioning on a small scale. Their absence is quickly felt in a small business, both culturally and financially.

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