What Is Employee Retention? 9 Effective Employee Retention Strategies in 2022

Piyush Sharma
May 17

Another high performing employee has left your organisation under a year and you have no clue why. If you can relate to this, read on!

Your employees are your biggest assets! As businesses are driven by its workforce, it becomes important to retain that talent. Losing loyal, and efficient employees, who have been a part of your system can impact the business performance. There is a significant financial impact of employee retention and turnover.

That’s why it is critical to know why certain employees leave and others stay. Understanding what employees value and formulating the right employee retention plans can be a strategic advantage to a business.

What is employee retention?

Employee retention is an organisation’s ability to retain its employees in the long run. It is defined as an organisation's efforts to ensure that its employees are retained and don't leave the job. The ongoing pandemic has made employee retention an even bigger challenge as millions of employees are quitting their jobs across the world. The “Great Resignation” is a reality in many organisations across the globe. 

In a scenario like this, when employee priorities seem to have changed, companies need to re-strategise the way they handle their workforce. Whatever policy changes organisations make, they must ensure that the employees are valued, appreciated, and provided with a flexible work environment that encourages productivity. Empathy should become a central tenet of today’s modern organisations. 

Retaining employees enables companies to have the best talent continue working for them and enhances recruitment and training efficiency. It also boosts employee morale, creates a loyal workforce, develops stronger work culture, and builds a solid brand image. An experienced workforce leads to an increase in productivity and revenue.

How do you calculate the employee retention rate? 

Maintaining top talent is one key strategy businesses must focus on to stay competitive. In order to calculate employee retention, you need to take into account a variety of factors, including employee satisfaction, compensation and benefits, company culture, and training opportunities. However, calculating employee retention can be a complex process, so it's important to have a team of experts on hand to help you. Implementing effective retention strategies will help you keep your best employees and maintain your business's competitive edge. 

Why do employees leave?

Employees might leave for a variety of reasons, but the following are seen as the most determining factors: 

Employee Dissatisfaction

  • Having a dwindling work-life balance, Burn-out can lead to a lesser job satisfaction
  • They feel they are inappropriately paid or undervalued

Better Alternatives

  • Financial reasons like better pay in another organisation
  • Better company culture
  • Better opportunities for career advancement and growth

A planned change

  • More flexible work arrangements
  • More defined career path
  • Priorities have changed

A negative experience

  • Unpleasant employee-manager relationships
  • Misalignment with the organisation’s values

It is a company’s responsibility to make their employees feel valued and appreciated so that they continue to remain loyal and hardworking. Some common mistakes employers make that reduce their retention rate include hiring ineffective managers, emphasising only monetary gains, discriminating against working parents, not putting their employee’s well-being first, and not taking action on the employee feedback.

How do you know when an employee is about to leave?

All companies witness employee turnover and it is not possible to keep every employee happy. If your employee is showing one or more of the following signs, they might be getting ready to bid you goodbye!

  • Their productivity has dropped significantly
  • They don’t act as a team player anymore
  • They don’t go out of the way to complete their work
  • They are unwilling to commit to long-term projects/responsibilities 
  • Exhibit a negative change in the attitude 
  • They don’t talk good about the organisation
  • The focus on the job is missing 
  • They express dissatisfaction with the job and their managers quite often, quite openly
  • They have developed a casual/irresponsible behaviour towards their work

Identifying these early warning signals at the right time can be critical. It gives you an opportunity to sit with them and understand their point of view. Addressing their concerns can even alter their decision to leave and bring back their enthusiasm toward work & organisation. Another advantage of recognising these red flags is that you can prepare better to handle the workload once they are gone.

So what are the main drivers of employee retention?

Employee retention is vital to the success of any company. By understanding the main drivers of employee retention, companies can develop strategies to keep their employees happy and healthy. Recognizing employees for their exemplary behavior, providing excellent training and development opportunities, designing well-crafted workspaces, and fostering team collaboration are just a few of the strategies that can help companies achieve retention goals. In addition, offering competitive salaries and benefits and managing employee turnover strategically can help ensure a business's long-term success. 

What are the benefits of employee retention?

Employee retention is one of the most important factors in a company's success. It's not only vital for the company's bottom line, but it also leads to a decrease in turnover, improves morale, and increases productivity. Here are nine effective strategies for employee retention in 2022:

Employee retention vs employee turnover

The key to sustaining a successful business is employee retention. Implementing these strategies will help improve employee morale and keep your staff happy. Not only that, but you'll also prevent employee turnover. Here are nine effective employee retention strategies you can implement in 2022: 

Employee retention strategies for 2022

The right kind of efforts in the right direction can improve the employee retention rate. Here are some actionable strategies for 2022 that you can implement: 

Give regular, positive feedback to the employees

Positive feedback, a few words of encouragement, and affirmation can make a huge difference in the way employees approach their work. It can increase their commitment to their work and make them more productive. It also shows that their efforts are being acknowledged, valued, and appreciated. 

However, it is important to keep things balanced. If you praise generously, you should also provide constructive criticism whenever necessary. This will help your employees get better at areas where there is a scope for improvement.

Effective actions you can take:

  • Link positive behaviour with business results
  • Provide feedback immediately after an employee achieves something
  • Give feedback in front of their colleagues. It will encourage others to follow suit
  • Be specific and clear with your compliments and the reason for the feedback
  • Avoid being condescending

Golden Tip: Give one positive feedback every week to each employee. 

Be empathetic, flexible, and understand their needs 

The world is still reeling under the aftereffects of the COVID-19 pandemic. Remote or hybrid work arrangements have blurred the lines between personal and work life, and employers must keep this in mind while handling their workforce. In a scenario where people are struggling with long working hours, uncertainty, stress, anxiety, and managing work and their responsibilities as caregivers, being empathetic can take you a long way.

Effective actions you can take:

  • Be aware and understanding of their personal/family-related challenges – financial, medical, mental needs
  • Focus on employee benefits 
  • Provide more perks like child care, more time for family, and work-life balance 
  • Provide flexible work timings 
  • Help them open up about their stress points 

Golden Tip: Schedule one-on-one with every employee every quarter and don’t talk about work

Create space for creativity in the workflow

Encouraging creativity in the workplace often brings the best out of employees. They can provide better results, expand your business with new ideas, increase sales and find plausible solutions to different problems.

For example, The 20% program offered by Google empowers employees to enhance their creativity as they can spend 20 per cent of their time working on side projects and what interests them the most.

Effective actions you can take:

  • Let your employees think outside the box. Don’t limit them with how and when 
  • Be open to brainstorming new ideas 
  • Let them implement their ideas, and give them the freedom to make mistakes 
  • Encourage everyone to come up with creative ideas. This will encourage participation 
  • The wider the pool of talent, the more varied the ideas will be. So, hire from different backgrounds 
  • Act on ideas that look actionable. This will encourage more creative ideas 

Golden Tip: Organise open forums to discuss out-of-the-box ideas every quarter 

Give your employees the respect they deserve

Every individual, irrespective of their position, seeks respect from their employers. And it is your primary duty to provide them that. Showing them respect will result in a fulfilled, engaged, motivated, and a loyal workforce. 

Effective actions you can take:

  • Be in control of your anger 
  • Be polite, empathetic, understanding, and chivalrous 
  • Be helpful to your reporters 
  • Be ready to listen, and do it sincerely
  • Respect their privacy, even in a professional setup 
  • Don’t use foul language, and be sensitive  
  • Never be judgemental

Golden Tip: Give positive feedback immediately but discuss negative feedback the next day!  

Take preventive steps toward employee burnout 

Pandemic-related stress, job insecurity and long working hours have made a large number of employees across the world feel burned out. It has also been seen as one of the major factors in employees looking for new jobs. A 24x7 work system has made it difficult for employees to switch off completely, as they did during the pre-pandemic era. Organisations must develop strategies that reduce employee burnout.

Effective actions you can take:

  • Focus on the completion of work rather than the number of working hours 
  • Encourage employees to take time off
  • Provide recharge days. Regular week offs, temporary breaks 
  • Closely monitor workload, divide the work efficiently 
  • Offer employee assistance programs
  • Make workplace wellness a priority

Golden Tip: Conduct regular informal team bonding activities 

Develop growth opportunities 

If employees don’t foresee a brighter future in your organisation, they are bound to leave sooner or later. From personal and financial growth opportunities, promotions, upskilling, getting to work on different projects, or carrying out varied responsibilities, companies can do a lot to ensure their employees don’t leave. 

Effective actions you can take:

  • Promote employees from within the organisation
  • Provide different types of training and upskilling workshops/courses
  • Assign a mentor who can help them get better at things 
  • Let them explore cross-training opportunities 
  • Identify and encourage soft skills 

Golden Tip: Plan the career path with every employee at the start of the year and schedule a mid-year review of the progress

Be a manager your employees can trust

An employee-manager relationship that doesn’t have a strong sense of mutual trust never goes a long way. You can make your employees work with force and fear, but they will only do the bare minimum work that will safeguard their job. If you want them to go the extra mile, you need to establish a relationship of trust. It has been observed that employees who trust their managers are more likely to fulfil their tasks and also surpass the expectations. 

Effective actions you can take:

  • Let your employees speak their minds, and listen sincerely, attentively 
  • Employees feel confident if they have a voice. So, act on their feedback
  • Be fair, give equal importance to everyone, and avoid being partial 
  • Show trust in their decisions, talent, and abilities 
  • Develop an inclusive work culture 

Challenge them for better output

A position entails fulfilling certain roles and responsibilities but doing the same thing every single day can cause boredom. So, throw different kinds of challenges to keep them interested in their work. Proper encouragement, appreciation, division of work and a result-oriented approach can lend great results. 

Effective actions you can take:

  • When you give your employees a new task, express your belief in them 
  • Encourage them to take risks, and back them if they fail 
  • Convince them that you are there as their support system
  • Appreciate and acknowledge their efforts if they accept your challenges 
  • Reward them if they succeed in fulfilling the task 

Golden Tip: Give everyone an opportunity to work on a task that is different from their regular responsibilities 

Conduct ‘Stay’ interviews 

It is a rare phenomenon but something worth trying. Stay interviews can help organisations know more about what the employees seek. 

Effective actions you can take:

  • Ask them about the things that excite them about their role and things that don’t 
  • Their concerns, complaints, insecurities, etc
  • If they see a future for themselves and how the company can help them grow
  • If they have ever thought of leaving the company – why? And why did they decide to stay
  • What changes would they like to see in the company, its processes, approach, leadership, etc

5 retention mistakes employers make

Employee retention is an important issue for businesses of all sizes. Retention becomes even more critical with the talent shortage expected to increase in the coming years. Here are five retention mistakes that employers are likely to make in the coming years and the consequences that will follow: 

  1. Not providing training and development opportunities will leave employees feeling undervalued and less engaged at work. 
  2. Not offering flexible work hours can lead to employees feeling disgruntled and unproductive. 
  3. Failing to reward top performers can damage employee morale and lead to turnover rates. 
  4. Creating an environment where employees feel disrespected can also lead to turnover rates. 
  5. Not taking employee retention seriously - This will have a negative impact on the company's bottom line. 

By implementing retention strategies that work, employers can safeguard their workforce and avoid costly turnover rates in the future. 

Employee retention examples

Employee retention is an essential part of a company's success. Investing in strategies that will help your employees grow and develop while providing the best work-life balance possible is important. Here are nine employee retention strategies that will help you achieve this in 2022: 


Zillow is the leading online real estate company, and it operates in over 36 U.S. markets as well as Canada, Mexico, the UK, Ireland and Australia. - Zillow promotes a positive work culture by providing employees with a healthy work/life balance, and employee retention is important to the company since turnover costs are high. 

Some of the strategies that have been successful in keeping employees happy include: offering good benefits such as flexible working hours, paid time off etc., developing a team culture where everyone feels valued and supported, helping workers develop their skills through various training programs etc. - It's essential for businesses to measure the success of employee retention strategies so that they can constantly tweak or adapt them as needed in order to keep staff happy and motivated

Bright Horizons

Encouraging employee socialization and networking events is important to keep your team members happy and motivated. By keeping communication channels open, you can quickly resolve any issues that crop up. Additionally, giving employees the opportunity to grow within the company helps retention rates as it demonstrates your faith in them. Offering benefits like flexible work hours or job-life balance will make employees feel appreciated and special - two things that are essential for a healthy workplace environment!

How HR software can help improve employee retention

HR software like Carbonate can play a pivotal role in effective employee retention programs. It can help collate and analyse key employee retention metrics and provide useful insights about where a company can improve. It can also create reports highlighting the impact of strategic investment on employee retention. Companies that fail to implement such robust initiatives lose their best talent and overshoot their budget in hiring and re-hiring new talent. 


Employee retention is an important aspect of any successful business; after all, your employees will take your organisation to newer heights. With the right strategy and actionable efforts, you can overcome this challenge.

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