How to Retain Employees in an Organization

improve employee retention“How to improve employee retention” is a pressing issue faced by many organizations today, no matter what industry they belong to.

According to a LinkedIn survey (2018), the US software industry topped the list with the highest employee turnover rate at 13.2%

So, what are the reasons for such a high turnover? 

What can entrepreneurs do to prevent a drain of talent?

How to retain employees in an organization?

What are the ways to improve staff retention in your organization?

Let’s try to answer these questions and find out what is a healthy employee turnover rate. We will also discuss employee retention strategies that can help you keep different generations of employees engaged and happy at work.

Why Do Employees Leave?

Business Insider states the top reason why employees leave companies is lack of engagement. This way, it refutes a common misconception that people leave jobs because they are unsatisfied with their manager or want a better salary.

Although these reasons can also drive a person to jump from one ship to another, the key reason behind high turnover rates is the lack of opportunities for advancement at work.

This is especially true for millennials.

A new generation of professionals who are not ready to accept anything less than perfect. They want to have the best car, house, and of course the best work. Not only do they appreciate generous perks and benefits at work, but also flexibility and challenging environment. 

According to Forbes, millennials are most likely the generation to switch jobs.

Another Forbes article states that about 60% of them don’t mind considering a new job opportunity.

If their expectations are not met, they don’t hesitate to leave companies even if they like their direct managers. 

With that being said, the question arises: what would be the normal turnover rate of an organization?

According to a Gallup report,

Each company should strive for a normal turnover rate of about 10%. 

But there is no optimal number for a healthy employee turnover rate and it can vary from 10% to 25%. This variation can depend on a number of factors, including:

  • The industry type
  • Key competitors
  • The market dynamics 

What is the turnover rate at your company? 

Have you ever analyzed how long people tend to stay at your organization?

Maybe it’s high time you calculated it. 

This simple math can help you easily gauge your annual employee turnover rate:

Attrition rate = (Number of attritions during a particular period / Average number of employees during your calculation period) x 100.

Now that we have covered the basics and how to calculate the attrition rate, let’s dig deeper into the five ultimate ways to retain employees at your organization and improve turnover rate.

5 Ultimate Employee Retention Strategies to Help Improve Turnover Rate

It’s true that today's employees are hard to retain. What’s more, it becomes challenging to create favorable conditions for two different generations that form your workforce: 

  • Gen Xers (39-53 years old) who are conservative
  • Millennials (24-38 years old) who are indecisive

Let’s take a closer look at ways to increase employee retention in your company and proven techniques that can help you keep both of these groups happy and motivated at work:

#1 Give Credit to Your Staff

appreciate employeesRegular recognition and appreciation are exactly what any employee values most at work. It is one of the key drivers of high performance that makes people feel fulfilled.

When employees show great results and tackle complex tasks, managers should emphasize their success. It is important to give credit to only those who deserve it, otherwise, it quickly loses its meaning.

Keep in mind that great performers are often likely to be modest about their achievements. So, give them enough attention and value their contributions. 

One way to get insight into individual team performance is by adopting a robust project management software with a simple reporting tool. It helps you monitor team performance and ensure employee hard work is noticed.


Further, employees who recognize their colleagues' contributions should also receive positive feedback from a manager. In this way, you can show that such behavior is highly appreciated in your company.

A few examples that show how giving credit to your employees is one of the best ways to retain your employees include:

This company encourages its nurses to give peer feedback to other nurses. The rule is every feedback is confidential and will be honest. As a result of this exercise, the healthcare system encourages their ongoing professional development.

This company deploys an appraisal software with features like performance journals, comment helper text, development activities, and coaching and development tips. This helps managers to give regular feedback to their employees and coach them to perform better. With adequate training, employees feel valued and learn new things, therefore lowering the turnover rate.

#2 Provide Clear Paths to Professional Development


Today, mature companies do care about the professional development of each employee to keep them challenged in their roles. Among the most popular means to retain and grow employees are:

  • Individual development plan (IDP)
  • Performance appraisal (PA)
  • Career planning
  • Salary review

Firstly, employees need to qualify and train on multiple stages of their organizational career. 

Initial qualification levels should be determined during the hiring process. For all the staff, the HR department needs to elaborate about their unique career maps (IDPs) with requirements described for each career level. Each company should provide favorable conditions for employees to gain new knowledge and experience at work.

Secondly, employees value performance appraisals (PAs). 

Usually, it includes a self-evaluation, a manager’s evaluation, and a feedback session where an employee, a manager, and an HR specialist negotiate the future of the employee’s career path. With the help of performance appraisal, employees can gain better insight into their strengths and weaknesses.

Thirdly, employees need to have a clear vision of their career prospects. 

Thus, career planning usually includes either vertical or horizontal opportunities for promotion. It depends on whether employees are interested to advance in their current role or move to another career direction. HR specialists need to facilitate this process and consult them for the best path to streamline their career growth.

And finally, the main factors of salary review are: 

  • good performance
  • promotion 
  • additional work responsibilities.

Speaking of best practices, various teams of dedicated developers have worked with different IT partners around the world over the last 15 years, and have accumulated a few strategies to improve employee retention.

For example, besides the usual feedback given during PAs, employees are also provided with a set of development tools that supplement their IDPs:

  • GAP analysis (a technical interview to identify knowledge gaps)
  • Mentoring program
  • Internal technical training
  • Certifications (Microsoft, ISTQB, Linux, Oracle, Scrum Alliance, etc.)
  • Professional conferences and training
  • Language courses

Related Read: Training Employees for Motivation, Success, and Retention


#3 Ensure Good Management

employee retentionToday, efficient managers act like mentors who open doors to learning opportunities and challenging tasks. The task of a manager is to design your work in such a way that it would be hard to imagine working anywhere else.

Usually, managers create jobs and then look for people to fill them. However, Facebook is one company that is not following this age-old strategy. The managers at Facebook sometimes do the opposite: they first find talented people and then create jobs around them.

In general, there are four ways how managers can make their employees happier at work by building trust

  • Let them do the work they enjoy
  • Underline their strengths
  • Provide career opportunities
  • Ensure a work-life balance.

#4 Invest in Your Employees

employee learningThe majority of companies today are increasingly investing in the leadership development of their employees to strengthen their soft skills and creativity.

According to Gallup's data,

Lack of people investment is the main reason why 91% of employees start considering new job opportunities.

Thus, the introduction of leadership programs in your company can significantly improve your retention rates. McKinsey's study found out that those who take part in leadership programs outperform those who don't.

Besides this, companies today are investing in team collaboration tools that help members working on a specific project delivery within a set deadline.

The use of such tools has become more prominent as they help organizations build a collaborative environment at workplace. Such investment towards their employees helps companies reach their set goals and deliver as per their stakeholders’ requirements.

#5 Hire the Right Employees from the Start

Hire Right Employees: Employee retention strategyNo doubt, employee retention starts with recruitment. When interviewing an applicant, there are four main things HR specialists need to pay attention to: skills, experience, attitude, and culture match. They should look beyond what is written in a CV to make sure that a new hire will be a good fit for the company.

HR specialists are responsible for attracting, hiring, and retaining the best employees. To be successful in hiring the best talent, they need to know how to attract candidates using various recruitment strategies.

Further, they need to understand how to screen, interview, and assess potential candidates not only for their competencies but also for their culture fit in a company.

Create Retention Plans for Key Employees: Improve Turnover Rate Easily!

An effective employee retention strategy is exactly what can prevent high employee turnover.

When doing all the above things the right way, you can ensure a long employee tenure in your company. However, bear in mind that some amount of employee turnover can help you ensure a high level of motivation among your employees as well as enrich your company with new budding talents.


Now that we have a clear idea on how improving employee retention can be achieved in your company, let’s cover a few FAQs that many companies ask regarding this topic.

Q1. How to improve employee retention and motivation?

There are multiple ways to increase employee retention and motivation. A few ways to improve employee retention are: earning employee trust, getting feedback from your employees and giving it importance, fostering respect in the workplace, and challenging your employees.

Q2. How can employee attrition be improved?

Employee attrition can be improved by hiring the right employees, firing people who aren’t fitting in, offer flexibility, and encourage employee engagement.

Q3. How do you improve employee morale?

Keeping employee morale up is not that difficult. All you have to do is ensure their voice is heard. Take feedback from employees and act upon it, don’t keep them hanging. Train them as required. If they know they are learning something new, they will stay around and be happy working in your company.

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About the author

Marta Hlova

Marta Hlova is a creative Marketing Manager who works with N-iX to help businesses implement technology transformations in a wide range of industries such as fintech, telecoms, media, hospitality, etc. Marta believes that success comes to those who hustle and are always looking to learn new things.

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