A Complete Guide to Employee Retention | Thomas.co

It’s normal in any business to have employees come and go, but sometimes, when employees leave at a higher rate than expected or more frequently than before, addressing why, and creating the right strategies to retain people becomes essential. 

High turnover isn’t good for any business. It costs time and money to recruit, train, develop and integrate a new staff member into a team. Employees equally don’t want to move around and would much rather feel valued in their positions, developing and growing into the role and business. Optimising staff retention is thus a win for both employee and employer.

In this guide you will learn about employee retention, why it is important, the reasons why good employees leave and what you can do to improve it.

What is employee retention?

Employee retention is an organisation’s ability to keep hold of their existing employees.

It is like any other kind of retention which is defined as “the ability to keep or continue having something” but in this context, employee retention is purely applicable to the corporate world.

If you were to consider the opposite to employee retention it would be, staff turnover. Staff turnover or churn as it is often referred to, is when you can’t retain staff. High staff turnover is never a good thing and often portrays the company in a negative light.

It is one of the many reasons why employee retention has become a significant area of attention for many businesses. Aside from developing a bad reputation, employee retention should be an organisational strategy designed to recognise employees' value and reward that for many positive reasons.

The importance of employee retention

It’s easy to underestimate just how damaging a high staff turnover can be. It comes with a myriad of issues that businesses have to face but can struggle to understand when people are constantly leaving. Some of the issues associated with poor staff retention include:

  • Loss of valuable skills

Can your business function if someone key to its success with a specialist skill set was about to leave?

  • Loss of essential knowledge

Both in terms of the business operations, the kind of projects - even how they work with other people.

  • Damaged customer relationships

Will customers be repeatedly presented with new members of staff all the time? What does that say about your business?

  • Efficiency adversely affected

If you’re constantly training new staff, when is the work being done? How inefficient is this? The simple answer, very inefficient.

  • Staff morale impacted

When key members leave it can affect the workforce but what about constant turnover? It can make more stable employees look elsewhere for more security. 

Gallup article in March 2019 cited that the “cost of replacing an employee can land between one-half to two times their annual salary.” 

Let’s also remember that it isn’t just about the person leaving but that there is a cost to employers which includes; talent searching, hiring fees, onboarding and training a new employee whilst taking valuable time away from the business and making it less efficient.

Reasons good employees leave

It is important to understand that good employees can leave a business and move on, but understanding the reasons behind such moves is even more important. There are some things that you will never be able to work against or help, but there are reasons which can be dealt with, stopping that employee from leaving your business. 

When it comes to scenarios which you can’t control, the top reasons why people leave include:

  • Retire
  • Continue their education
  • Make a career change
  • Have a child 
  • Care for a family member

If a business is suffering from high staff turnover, getting an understanding of the prevailing reasons for so many departures is essential. There are many different techniques that can be used to discover what is happening and ultimately create a roadmap on how to fix it. 

  • Provide a safe way for staff to provide feedback

You can ask for informal or formal meetings with those leaving to get a better sense of what has prompted the decision. You can also ask them to provide a digital exit form which can be done away from their office desk.

  • Carry out informal chats with staff who are planning to leave

Informal chats as described in the previous point are a good way to make it feel less pressured. Importantly, you want to create a sense of trust so that they can open up and let you know more information to help.

  • Look for patterns in resignations

Is it the same department all the time? Is it happening to a particular age range of employees? Is it because of low paid work? Find a pattern and address it. 

  • Ask around the workplace

You could ask for anonymous feedback from all staff members with questionnaires designed to highlight if there are any issues.

  • Look at where employees go next

Are your employees being poached by the same business? Are they going into different careers all together? The first is easier to address, the later is more about recruiting the right people to start with - where do their skills lie and are they being used appropriately.

If people leave for reasons out of their control as previously mentioned, then what about those who choose to leave? There are lots of reasons why employee retention can be low, here are some of the more common reasons.

Poor compensation

We’ve all felt that we deserve more for our efforts in the workplace, especially if someone is doing the same job but you’re getting paid less - or you’re working longer hours and bringing better results with the same outcome.

The reality is that salary and benefits are often reasons people move to an alternative employer. Understanding what the market is willing to pay for your employees and making fair compensation packages to match or better the market is essential.

Overwork and lack of support

It’s become a lot more common to understand burnout in recent years. We are constantly connected to our devices and working longer hours than ever before. This is finite however and the lack of support given to staff to reduce workloads or help manage it is causing people to search for less stressful jobs.

Poor career opportunities

Another reason why someone may choose to leave is because there is little advancement in the role they currently hold. With fewer opportunities for advancement, what is going to keep employees motivated once they are no longer challenged in their role?

Desire for a better work-life balance

If there is one thing the global pandemic exposed is that having a work-life balance is more important than ever. Long hours in an office have become less desirable, less time with family or friends even more so.

It’s easier to recruit from employers who are known to make staff work long hours, even more successfully when recruiting against poor compensation.

Lack of recognition

The workplace has changed considerably over the last two decades where more emphasis needs to be placed on individuals being recognised for their efforts. It’s not just about promotions or remuneration, but feeling valued is critical to keep many employees, younger ones in particular, feeling like they are contributing to the success of the business with their work.

Management issues

We’ve all had a manager that we haven’t gotten along with. In many cases it can be a clash of personalities, in other cases it can be anything from being managed badly, to the manager not having people skills. In fact, there are many reasons for management issues so addressing them is going to be needed to keep retention high. 

One key issue that pops up a lot is how poor financial management will adversely affect the confidence of employees. If the business is being run badly from a financial perspective, this can give employees a negative perception of the business driving them out before other issues could potentially arise.

Poor cultural fit

It could be as simple as not fitting in with the type of work, or even colleague profiles within the organisation. Someone highly creative would generally struggle in a very structured environment whilst someone who is more logical would find it difficult to integrate in a liberal, creative environment.

Company direction concerns

As mentioned in the management issues section, how the company is being run will place a greater emphasis on making a decision to stay or leave the company. If the business is not clearly communicating its approach to the marketplace or is heading in a different direction than one which originally made that employee join, then it is likely that there is going to be less confidence in the running of the business, raising more concerns.


We will all have to face retirement at some point but, some people may choose to go into early retirement, especially if the business is changing rapidly or they no longer feel that their contribution is helping anymore. Understanding that the need to be recognised - especially for an older generation is just as important and can be used to help the business succeed.

Location and commuting

The second big change that the pandemic has brought about is the working from home culture which has been proven to not only work, but be desirable - especially for those with a long commute. Introducing flexible working practices can address this whilst also understanding that someone who has to commute a long distance daily is less likely to stay over a longer period of time.

How to improve employee retention

So, how do you improve employee retention? There are numerous ways to do so, and there aren’t any simple one fix solutions - if there is one thing that this guide has addressed so far it is that you need to be very attentive to the workplace and the potential pitfalls that encourage high turnover.

What are the practical steps you can take to improve employee retention? Here are just some ideas...

Recognise the reasons why people leave

What are the reasons why people leave? What stands out more than any other reason? Taking the time to understand what creates the biggest reasons for leaving you can create strategies in your business to deal with them.

If you continue to ignore these issues which can be fixed, then you’ll spend more money, time and resources on continually recruiting new staff. Addressing the issues is a business necessity over the long term.

Use psychometric assessment tools

Using psychometric assessment tools is one of the easiest ways to make sure that you not only recruit the right people for the role, but that you find candidates who have the cultural and skills base to meet your requirements.

Assessment tools, like the ones Thomas provides, help businesses get a better understanding of the candidate, their behaviour and what motivates them. This helps find the right employee for your business and improves the experience for all parties at the same time.

Training, upskilling and continuous development opportunities

One of the most effective ways to retain staff is to make them feel like their work is valued, and one of the most effective ways to do that is by helping them develop. When you invest in an employee’s success, they will invest in you. 

Learning new and valuable knowledge to help them with their day jobs, employees feel a great empowerment in what they do and helps keep them motivated and engaged. Businesses who reported high training rates saw a 53% reduction in employee turnover.

Rewards, gratitude and recognition

Recognising the hard work of your employees is essential, and being able to reward your employees is a way of showing that recognition. It doesn’t need to be financial, but it could be. You’re trying to externalise praise, and sometimes these kinds of rewards can be counterproductive in their strategy. 

Intangible rewards help show recognition in a more meaningful way. Words of praise publicly or privately can mean a great deal to an employee. Promotions, raises and internal hiring can develop the recognition that employees seek.

Employee wellbeing

This can cover many different things but employee wellbeing is down to people feeling supported, accommodated and empathised with. That’s why managers who can also show levels of good emotional quotient (EQ) are desperately sought after in the new working world. 

Being able to listen, understand and help employees overcome challenges, do better and to put yourself in their shoes when making decisions is part of helping employee wellbeing.

Offer flexible working opportunities

People now want to be able to work from home if not all of the time, some of the time. Being able to have mornings taking their children to school or getting away earlier for social events when required. 

But it's also things like parental leave, maternity, duvet days are part of this new working world that you need to be aware of. Give loyalty to your employees and they will give it back in bucketloads.

Give employees a stake in the company

A shareholder option won’t be available to every employee in the company, or for every company to give out but, where it is available it should be considered. Having some ownership in the business also means feeling a sense of ownership to the company and role, enhancing motivation and contribution to the company. 

This is an option that is more attractive to more senior members in a business who’s loss can be devastating to the company especially if they have knowledge and ideas that can take the business forwards.

Pay attention to employee feedback

Exit interviews are good to understand what the problems are, but it’s too late to do anything about the issues, especially when that person is leaving. However, feedback is essential throughout the employee lifecycle - acting on it is even more important. 

If issues are raised, deal with them. If ideas are proposed - put it to the team about how to implement or if it will work. Be the kind of organisation that is open to feedback of all nature and looks to foster a healthy environment of cooperation and tackling problems rather than making them the reason why someone would choose to leave.

Look at what other companies provide

It sounds simple but, looking at what other companies do is actually a very good idea. It helps provide insights into what works and what tactics other organisations are using in order to keep employee retention high. 

For example, Hyatt hotel group has an average staff retention of 10 years - this is backed on their industry recognised training programme. Zappos has an enviable 85% retention rate, they do this by making their company culture front and centre of the employee experience - building mutual trust and relationships.

Improve staff retention with Thomas

Staff retention is a priority for any organisation, even more so after a global pandemic which has shifted the way we approach our roles and stay motivated instead of simply moving on. Understanding why people leave is essential in order to create a workplace and strategy around better retention.

Using the right tools, like psychometric assessments, delivering better training and empowering employees to have a better work-life balance are key strategies that can be implemented in your organisation.

Thomas assessments explore multiple aspects of behaviouraptitude and personality in the workplace to provide you with a comprehensive but accessible overview of both yourself and your employees. With our assessments, you can identify the best ways to onboard individual employees based on their behavioural preferences and learning styles, the reasons for your retention issues and then work towards resolving them based on our insights.

Understanding engagement trends in your organisation also allows you to focus your efforts in the right places, and by increasing engagement you can directly boost the productivity levels across your organisation.

For more information about our solutions to improve employee retention, speak to our team.