5 Effective Tactics to Improve your Employee Retention Rate

employee retention
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Let’s face it, The Great Resignation is sweeping the world and HRs are trying their best to reduce employee turnover.


As per a study conducted by Amazon India in September 2021, almost 51% of employees were seeking opportunities in domains where they had little to no experience. The same study also informed that around 68% were trying to switch industries.


The companies are also making the most of The Great Resignation by hiring as much as they can to fill the vacant positions at the earliest. In fact, Forbes India reported that there was a huge demand for IT employees and their technical skills.


Between Jan and September 2021, the top five IT organizations in India hired nearly 1.7 lakh employees. The hiring was so rampant that by December 2021, only 8% of candidates were actively looking for jobs.


Whenever an employee leaves the company, it is a huge loss for the company and The Great Resignation has made us sit up and take notice of the employees’ aspirations and requirements.


Companies all over the world are trying to counter this resignation trend by managing them effectively and trying to keep them engaged. Hence, let us understand the importance of employee retention and take a look at five effective employee retention strategies.


Role of Management Training in Employee Retention


Importance of Employee Retention

The most visible effect of an employee leaving a company is the disruption it causes for the daily work of the department he or she was working in. However, these temporary disruptions are just the tip of the iceberg.


HRs understand that replacing an employee costs almost one-third of their annual salary in the form of arranging interviews, scheduling tests and setting up the interview panel. It also affects the remaining employees who are burdened by the additional tasks they are required to complete to complete the team’s tasks on time and meet their deadlines.


Let us take a closer at why the employee retention rate is a significant aspect for every organization.


Resignation is Costly

As we mentioned earlier, replacing an employee costs the company a fortune. The company would have to spend extra on advertising the vacancy, screening the candidates, interviewing them as well as onboarding and training them. Depending on the industry, the employee’s designation and salary, this cost could easily go into lakhs and even more. The company is also losing the investment that they put into training and grooming the employee while they were working in the company.


On the other hand, managing the existing employees of an organization is a cost-effective option for the company. The company can train them and improve them to tackle their daily tasks efficiently. It helps in improving their overall value, thereby making them an asset to the organization.


Impacts Employee Engagement

When an employee leaves a company, the rest of their teammates are left to bear the brunt of the situation. This causes uneasiness among them as they are required to shoulder additional responsibilities and work harder.


This might lead to lowered engagement and motivation to work for the company. As engagement is directly proportional to their productivity, it leads to a reduction in their output, which would have already taken a hit due to the loss of a team member. Hence, resignation also impacts the engagement of the remaining workforce drastically.


Lowers Experienced Employees

When an employee resigns, they are not only leaving their position. They are also taking their experience and skills with them. They are also taking the time and efforts the company invested in grooming them and making them what they are. They are taking the skills learnt through years of experience and company training.


Hence, retaining experienced employees is a requirement for any company as they would already be familiar with the company culture, their work ethics, as well as the company values. Additionally, they would have also become quite efficient at their job as they have been doing it for years and even advancing in it. Having several such experienced employees in a team is sure to improve the output of the entire team. Hence, companies should try to increase the employee retention rate.


Cohesive Company Culture

The company culture comprises of the employees and their imbued culture. It is formed of the company’s values, preferences, perceptions and behaviours. Hence, it plays a vital role in hiring and retaining the right talent. As a result, retaining experienced employees also helps in developing a group of individuals who value your cohesive company culture.


Building a cohesive company culture also helps in setting up a robust employer brand. In turn, a strong employer brand would help you develop a unique company identity amongst the candidates and attract and retain a talented and dedicated workforce who wish to work for your company.


Better Client & Customer Relations

If the employee has direct contact with your customer or client, they would have already developed a personal relationship due to their interactions. Over time, the customer or client perception of the company remains due to this relationship and once they understand that that specific employee is no longer handling their professional requirements, they tend to look for other options.


Hence, retaining employees is a requirement for maintaining healthy client relationships. On the other hand, hiring and training a new employee as well as building customer relationships utilizing them would take longer. Additionally, the existing customer base would have already gotten used to the previous representative and this change might even result in you losing their business.


Tips to increase employee retention rate


5 Effective Tactics to Improve Employee Retention Rate

Now that we have understood the importance of employee retention, analyse your employees with the help of previous data and behaviour data and make a list of the staff members who are skilled and dedicated and hence, you wish to keep. You should also include the employees who show the potential to upskill themselves and remain with the company for the long haul.


Once you have this list, you can concentrate your employee retention efforts towards them. Hence, let us take a look at five effective employee retention strategies in 2022, that would help you counter The Great Resignation.


1. Effective Onboarding

A recent study found out that 76% of HRs believe that their current onboarding process should be improved for better recruitment. A mere 47% of them believed that their onboarding program was effective enough to retain the newly hired recruit.


Hence, improving the effectiveness of your onboarding process should be a priority when improving your employee retention rate. To achieve this, you need to streamline the onboarding process to capture and maximize the candidate’s interest. On average, 40% of current onboarding formalities consist of paperwork or data entry. It should be minimised to improve their engagement thereby improving the effectiveness of the onboarding process.


2. Prioritize Career Advancement

When it comes to employee retention, skilled employees would always stay longer with a company where they can advance their careers to the next level. Talented individuals are always motivated by the possibility of promotion and hence, tend to leave their company once they understand that their growth prospects are limited.


Studies have shown that for every 10 months an employee remains in the same position, their chances of quitting increase by 1%. On the other hand, companies are rigid on their promotion policies and various factors determine whether an employee can get promoted. It would not simply be the ability and skill of the employee. Hence, in some cases, despite being eligible for a promotion, there might be instances when the employee is required to continue in their current position. As a result, the employee starts looking for better opportunities, leading to higher turnover for the company.


3. Ensure Employee Recognition

A recent study showed that 63% of employees were unlikely to look for a new job if they feel recognized in their company. Hence, ensuring employee recognition is a significant factor when it comes to improving the employee retention rate of your organization.


Employee recognition is a requirement for any company looking to retain its employees. It creates an environment that attracts the best talent. It fosters a positive environment in which the employees motivate each other to improve themselves. The employees are also able to work better and remain motivated with increasing recognition from their superiors in front of their peers.


4. Have Flexible Schedules

Since the start of the pandemic, employees have become accustomed to remote working. They have realized the importance of flexible work schedules. Both the employer and the employees can get comfortable with their work due to this work environment. Hence, as long as the daily tasks are not affected, the employees and the employers are happy to have flexible working schedules.


Since the government proposed restrictions have been limited, multiple employees have expressed the desire to work from home. It helps them balance their work and personal lives effectively. Having flexible working arrangements such as remote working also helps in avoiding a major pain-point of daily work: the daily commute to and from work.


5. Focus on Mental Health

Since the start of the pandemic, there has been an increase in the awareness of employee well-being. Hence, the companies have also started focussing more on employee mental well-being recently.


As for the employees, they usually tend to work after normal working hours to make up for the time lost in homely distractions. However, this might lead to burnout eventually. Hence, the managers and the HRs need to ensure that they avoid tasking the employees with any further work or calls after work hours. This would help the employees realize that they are part of a family and that their superiors are genuinely concerned about their mental health, thereby helping them stay longer with the organization.



From what he has discussed until now, it is evident that multiple factors help the employees stay longer with a company apart from money. HR needs to identify these traits and understand what helps them stay longer with the company. They should also employ the tactics discussed until now to ensure that the employee retention rate improves overall. Deploying these strategies would not only help in reducing employee turnover but also improve productivity and thereby, ensure the success of the company.


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