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18 Strategies to Increase Employee Retention



18 Strategies to Increase Employee Retention

Sometimes employees stay at a company for many years, loving the work they do and feeling like they’re exactly where they’re meant to be. Conversely, some employees leave and pursue other opportunities.

Whatever the case is for your business, you likely want to retain all of your employees, whether they’ve been with you for ten years or just started last quarter.

In this post, learn what employee retention is and discover high-impact strategies that will help you satisfy your employees and keep a low retention rate.

What is employee retention?

Employee retention is a business’s ability to keep their employees and reduce employee turnover, which is when employees leave their jobs for other opportunities or reasons.

Increasing employee retention directly impacts business success, as having more employees or the right amount of employees makes it easier to reach business goals.

Employee retention is expressed as a percentage, and below we’ll discuss how it’s measured.

How to Calculate Employee Retention Rate

The formula to calculate your employee retention rate is rather straightforward. You simply divide your total number of remaining employees during a set period by the total number of employees you began with during that same period and multiply the number by 100.

employee retention rate formula

For example, let’s say you began Q1 with 43 employees and finished Q1 with 39 employees. Your equation would look like this:

(39 / 43) x 100

And your employee retention rate would be 90.69%, or 90.7% rounded to the nearest 10th.

Why is employee retention rate important?

Employee retention rate is important because it helps you understand how your business fares in keeping employees and whether or not there need to be improvements to your employee retention strategies.

If your rate tells you that you have lower retention, your business likely spends more money hiring new employees than helping existing employees succeed. In fact, according to Gallup, the cost of replacing employees can range from .5 to 2x times an employee’s annual salary.

How to Improve Employee Retention

Recent HubSpot Data found that marketers reported that they believed that the reasons for high employee turnover were a lack of work-life balance, lack of flexible schedule, or lack of career growth opportunities.

marketing turnover rate factors

Data Source

Improving employee retention means reducing employee turnover and continuing to meet overall business goals that contribute to success. It usually begins with hiring the right employee and additional strategies we’ll discuss below.

Employee Retention Strategies

1. Use comprehensive hiring practices.

As mentioned above, employee retention often begins by simply hiring the right people. And, the best way to hire the right people is to have a recruitment process that ensures you’re hiring the right people.

It’s best not to subject candidates to a long and drawn-out process as it may send them elsewhere. More so, going through interviewing in a way that helps you best understand the candidate and if they possess the right skills for the role or will be able to develop them on the job.

2. Strive to create supportive work environments.

Employees need to work in environments where they feel supported; a key to retaining employees. Therefore, strive to create an environment where employees flourish and perform to their best abilities.

Some of the best ways to do so are by providing adequate on-the-job training, practicing effective and clear communication, and offering benefits and perks.

3. Provide proper training and development.

Training and development are crucial to employee retention.

If employees aren’t adequately trained for their jobs, they may feel underprepared for their work or as if they aren’t performing well. If employees feel like they can’t do their job, they may pursue opportunities that offer comprehensive onboarding and on-the-job training.

4. Always communicate.

Communication is a pillar of employee retention. When people understand what is expected of them and there are open lines of communication, they’re more likely to feel prepared for their jobs and ask questions if they are confused.

For example, if you’re a people manager, saying “You need to improve next quarter” is less effective than saying, “Next quarter I’d like to see improvement in XYZ areas, and some ways to ensure you’re meeting targets in those areas is to do XYZ.”

Communication is also critical for higher-level executives, as employees want to hear from business leaders about how the business is faring and how their job duties relate to overall success.

5. Offer benefits and perks.  

Benefits and perks are a significant part of employee retention. Offering them shows employees that you genuinely care about their wellbeing, and it can give them a sense of security about their lives. For example, benefits like health insurance ensure employees can find adequate care if they get sick.

Added perks can be fitness discounts, access to corporate deals, or maybe even providing coffee in the workplace. If you’re hoping to include perks directly related to employee desires, ask employees for feedback about what they’re interested in having offered.

6. Create career development plans.

Working with employees to create a path for development at work is a great way to encourage retention. It gives people a goal to work towards and can be a significant motivating factor.

Quarterly, bi-annual, or annual career chats where managers sit down with employees and discuss where they want to be, how they can get there, and what opportunities are open to them is a great way to practice this.

7. Provide effective manager training.

Employees sometimes leave their jobs because they don’t feel supported by their managers. To combat this, ensure that your business invests in effective training for managers so they can effectively support employees and their development.

Effective training also ensures managers are equipped to have tough conversations with employees when necessary, like letting them know that they need to further develop specific skills or make changes to their job processes.

All in all, people want to feel that their managers care about them, and proper training can ensure that this happens.

8. Create internal recognition programs.

A great way for employees to feel seen and appreciated at work is to have internal award programs, where employees are recognized for their hard work. You’ll show employees that you value what they do for your business, and all of their coworkers can be aware of their impact.

In practice, this can look like a peer recognition program where coworkers nominate other team members or a manager nominated award.

9. Support employees in educational endeavors.

One reason employees leave companies is to go back to school and continue their education.

Instead of losing employees, you can consider supporting their educational development while they remain on the job. For example, some companies pay for or reimburse employees for academic courses they complete while still working for the company.

10. Encourage skill development.

You want employees to receive the training they need to succeed at their jobs. Still, you should also encourage employees to develop additional skills that will aid in their professional development. By doing so, employees can progress into new roles within your organization instead of seeking opportunities elsewhere.

For example, say an employee is stuck in a rut where they feel like they already know how to do their job but are desiring to do something more. If there are no opportunities at their current workplace to learn new skills, they may seek an opportunity at another company that will allow them to learn new skills.

Instead, if that employee can develop additional skills while remaining on the job, they may be more likely to stay. For example, employees can propose new projects within their team that will place them outside of their comfort zone and require new skills, or take on a workplace opportunity that requires new skills, like organizing a speaker series and learning about recruiting talent.

11. Show employees how their work affects customers.

A great way to help employees see that their job means something is to ensure they know how their work affects customers. This could look like highlighting customer success stories or case studies where employees can truly see the fruits of their efforts and how a customer has succeeded because of the work they’ve done.

Conversely, when employees don’t feel like their work means something, or they don’t understand how they can help the customer, they may be more likely to pursue an opportunity where they clearly see how they make an impact.

12. Offer fair compensation.

A significant reason employees leave is that they feel they aren’t adequately compensated for their work. Case in point — LinkedIn’s Global Talent Trends Report from 2020 found that companies rated highly in providing fair compensation had a 56% lower rate of attrition.

Therefore, a best practice for increasing employee retention is to ensure that you’re fairly compensating employees, starting with baseline salary. You can also consider offering raises, promotions, or taking on new responsibilities.

13. Always provide actionable feedback.

Employees want to understand their performance, so providing feedback is critical. They’ll know areas of high performance, as well as specific skills that need improvement.

Having this feedback shows employees that you care about their performance and how it affects the company. When feedback is actionable, you show that you care about their development and aren’t just instructing them to do better with no additional advice.

Employees that aren’t given feedback are left confused about their performance and unsure if they need to make changes, lacking guidance, and may go somewhere else where they understand more about how they’re fairing.

14. Encourage a proper work-life balance.

Employees who feel they’re expected to be in work mode 24/7 will be stressed and likely develop feelings of burnout. They may also decide to pursue work elsewhere, where they know that it is encouraged to live a life outside of work.

Instead, encourage people to have a work-life balance and set boundaries. For example, maybe you say that people should set time frames in which they will be doing work, and then times where they will put everything aside and pick it up tomorrow.

Promoting this balance can also look like encouraging employees to take time off when necessary or even taking breaks during the workday.

15. Practice effective change management.

All workplaces have to deal with change, and sometimes that change can be unexpected.

The COVID-19 pandemic is an excellent example of practicing effective change management. Millions of people worldwide were suddenly expected to pivot to different working styles, and change management was necessary to prepare workers for these changes and create a smooth transition.

Being able to reassure employees when changes are happening, both big and small, can help assuage any fears and anxieties they may have about doing their jobs. Without this, employees may feel they are being left behind and seek opportunities elsewhere.

16. Always emphasize teamwork.

Rarely do people work in silos, so you should always encourage employees to work together as a team so people feel as though they aren’t working independently to help solve company needs.

Encourage employees to get to know their coworkers, contribute in group settings, and collaborate when necessary. You can also encourage employees to turn to each other for advice and assistance before reaching out to a manager.

17. Offer flexible work options.

LinkedIn’s Global Talent Report names four P’s of employee experience: people, place, product, and process. Place, concerning employee retention, means where people work, whether physically in the office, are remote, or a combination of the two.

This means that a critical aspect of employee retention is offering employees to choose a preferred mode of work, whether that be entirely in-person at an office, a hybrid option between working at home and going into the office, or completely remote.

By doing this, employees can pick a mode of work that speaks best to their needs. For example, some people are caregivers to family and friends, so having the opportunity to work from home and continue to provide care can be the difference between retaining them or losing them to a company with more flexibility.

18. Create an inclusive work environment.

An inclusive workspace is critical to retention, as employees who feel safe and valued in the workplace are more likely to stay within your company.

This means that it’s important to champion diversity, inclusion, and belonging at work so that all individual employees feel recognized, seen, and cared for by your business. You can do things like:

  • Create diversity programming,
  • Create employee resource groups so employees can connect with others in the workplace that share similar identities,
  • Create an inclusive language guide for your business to refer to to ensure that writing is inclusive of everyone.

Companies that don’t practice diversity see its effects in their retention — for example, nearly 50% of people of color have quit a job because of experiencing or witnessing discrimination at work.

Retaining your employees often begins by hiring the right person. But even then, it’s essential to continuously work to make employees feel safe, comfortable, and able to succeed at their jobs.

If you’ve calculated your business’s business retention rate and found that you want to raise it, leverage the tips on this list to begin lowering your turnover rate.

company culture template

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45 Free Content Writing Tools to Love [for Writing, Editing & Content Creation]



45 Free Content Writing Tools to Love [for Writing, Editing & Content Creation]

Creating content isn’t always a walk in the park. (In fact, it can sometimes feel more like trying to swim against the current.)

While other parts of business and marketing are becoming increasingly automated, content creation is still a very manual job. (more…)

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How data clean rooms might help keep the internet open



How data clean rooms might help keep the internet open

Are data clean rooms the solution to what IAB CEO David Cohen has called the “slow-motion train wreck” of addressability? Voices at the IAB will tell you that they have a big role to play.

“The issue with addressability is that once cookies go away, and with the loss of identifiers, about 80% of the addressable market will become unknown audiences which is why there is a need for privacy-centric consent and a better consent-value exchange,” said Jeffrey Bustos, VP, measurement, addressability and data at the IAB.

“Everyone’s talking about first-party data, and it is very valuable,” he explained, “but most publishers who don’t have sign-on, they have about 3 to 10% of their readership’s first-party data.” First-party data, from the perspective of advertisers who want to reach relevant and audiences, and publishers who want to offer valuable inventory, just isn’t enough.

Why we care. Two years ago, who was talking about data clean rooms? The surge of interest is recent and significant, according to the IAB. DCRs have the potential, at least, to keep brands in touch with their audiences on the open internet; to maintain viability for publishers’ inventories; and to provide sophisticated measurement capabilities.

How data clean rooms can help. DCRs are a type of privacy-enhancing technology that allows data owners (including brands and publishers) to share customer first-party data in a privacy-compliant way. Clean rooms are secure spaces where first-party data from a number of sources can be resolved to the same customer’s profile while that profile remains anonymized.

In other words, a DCR is a kind of Switzerland — a space where a truce is called on competition while first-party data is enriched without compromising privacy.

“The value of a data clean room is that a publisher is able to collaborate with a brand across both their data sources and the brand is able to understand audience behavior,” said Bestos. For example, a brand selling eye-glasses might know nothing about their customers except basic transactional data — and that they wear glasses. Matching profiles with a publisher’s behavioral data provides enrichment.

“If you’re able to understand behavioral context, you’re able to understand what your customers are reading, what they’re interested in, what their hobbies are,” said Bustos. Armed with those insights, a brand has a better idea of what kind of content they want to advertise against.

The publisher does need to have a certain level of first-party data for the matching to take place, even if it doesn’t have a universal requirement for sign-ins like The New York Times. A publisher may be able to match only a small percentage of the eye-glass vendor’s customers, but if they like reading the sports and arts sections, at least that gives some directional guidance as to what audience the vendor should target.

Dig deeper: Why we care about data clean rooms

What counts as good matching? In its “State of Data 2023” report, which focuses almost exclusively on data clean rooms, concern is expressed that DCR efficacy might be threatened by poor match rates. Average match rates hover around 50% (less for some types of DCR).

Bustos is keen to put this into context. “When you are matching data from a cookie perspective, match rates are usually about 70-ish percent,” he said, so 50% isn’t terrible, although there’s room for improvement.

One obstacle is a persistent lack of interoperability between identity solutions — although it does exist; LiveRamp’s RampID is interoperable, for example, with The Trade Desk’s UID2.

Nevertheless, said Bustos, “it’s incredibly difficult for publishers. They have a bunch of identity pixels firing for all these different things. You don’t know which identity provider to use. Definitely a long road ahead to make sure there’s interoperability.”

Maintaining an open internet. If DCRs can contribute to solving the addressability problem they will also contribute to the challenge of keeping the internet open. Walled gardens like Facebook do have rich troves of first-party and behavioral data; brands can access those audiences, but with very limited visibility into them.

“The reason CTV is a really valuable proposition for advertisers is that you are able to identify the user 1:1 which is really powerful,” Bustos said. “Your standard news or editorial publisher doesn’t have that. I mean, the New York Times has moved to that and it’s been incredibly successful for them.” In order to compete with the walled gardens and streaming services, publishers need to offer some degree of addressability — and without relying on cookies.

But DCRs are a heavy lift. Data maturity is an important qualification for getting the most out of a DCR. The IAB report shows that, of the brands evaluating or using DCRs, over 70% have other data-related technologies like CDPs and DMPs.

“If you want a data clean room,” Bustos explained, “there are a lot of other technological solutions you have to have in place before. You need to make sure you have strong data assets.” He also recommends starting out by asking what you want to achieve, not what technology would be nice to have. “The first question is, what do you want to accomplish? You may not need a DCR. ‘I want to do this,’ then see what tools would get you to that.”

Understand also that implementation is going to require talent. “It is a demanding project in terms of the set-up,” said Bustos, “and there’s been significant growth in consulting companies and agencies helping set up these data clean rooms. You do need a lot of people, so it’s more efficient to hire outside help for the set up, and then just have a maintenance crew in-house.”

Underuse of measurement capabilities. One key finding in the IAB’s research is that DCR users are exploiting the audience matching capabilities much more than realizing the potential for measurement and attribution. “You need very strong data scientists and engineers to build advanced models,” Bustos said.

“A lot of brands that look into this say, ‘I want to be able to do a predictive analysis of my high lifetime value customers that are going to buy in the next 90 days.’ Or ‘I want to be able to measure which channels are driving the most incremental lift.’ It’s very complex analyses they want to do; but they don’t really have a reason as to why. What is the point? Understand your outcome and develop a sequential data strategy.”

Trying to understand incremental lift from your marketing can take a long time, he warned. “But you can easily do a reach and frequency and overlap analysis.” That will identify wasted investment in channels and as a by-product suggest where incremental lift is occurring. “There’s a need for companies to know what they want, identify what the outcome is, and then there are steps that are going to get you there. That’s also going to help to prove out ROI.”

Dig deeper: Failure to get the most out of data clean rooms is costing marketers money

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Ascend | DigitalMarketer



Ascend | DigitalMarketer

At this stage, your goal is to generate repeat buys and real profits. While your entry-point offer was designed for conversions, your ascension offers should be geared for profits—because if you’re serving your customers well, they’ll want to buy again and again.

Ascension offers may be simple upsells made after that initial purchase… bigger, better solutions… or “done for you” add-ons.

So now we must ask ourselves, what is our core flagship offer and how do we continue to deliver value after the first sale is made? What is the thing that we are selling? 

How we continue to deliver value after the first sale is really important, because having upsells and cross sales gives you the ability to sell to customers you already have. It will give you higher Average Customer values, which is going to give you higher margins. Which means you can spend more to acquire new customers. 

Why does this matter? It matters because of this universal law of marketing and customer acquisition, he or she who is able and willing to spend the most to acquire a customer wins.

Very often the business with the best product messaging very often is the business that can throw the most into customer acquisition. Now there are two ways to do that.

The first way is to just raise a lot of money. The problem is if you have a lot of money, that doesn’t last forever. At some point you need economics. 

The second way, and the most timeless and predictable approach, is to simply have the highest value customers of anyone in your market. If your customers are worth more to you than they are to your competitors, you can spend more to acquire them at the same margin. 

If a customer is worth twice as much to you than it is to your competitor, you can spend twice as much trying to acquire them to make the same margin. You can invest in your customer acquisition, because your customers are investing in your business. You can invest in your customer experiences, and when we invest more into the customer we build brands that have greater value. Meaning, people are more likely to choose you over someone else, which can actually lower acquisition costs. 

Happy customers refer others to us, which is called zero dollar customer acquisition, and generally just ensures you’re making a bigger impact. You can invest more in the customer experience and customer acquisition process if you don’t have high margins. 

If you deliver a preview experience, you can utilize revenue maximizers like up sells, cross sales, and bundles. These are things that would follow up the initial sale or are combined with the initial sale to increase the Average Customer Value.

The best example of an immediate upsell is the classic McDonalds, “would you like fries with that?” You got just a burger, do you also want fries with that? 

What distinguishes an upsell from other types of follow up offers is the upsell promise, the same end result for a bigger and better end result. 

What’s your desired result when you go to McDonalds? It’s not to eat healthy food, and it’s not even to eat a small amount of food. When you go to McDonalds your job is to have a tasty, greasy, predictable inexpensive meal. No one is going there because it’s healthy, you’re going there because you want to eat good. 

It’s predictable. It’s not going to break the bank for a hamburger, neither will adding fries or a Coke. It’s the same experience, but it’s BIGGER and BETTER. 

Amazon does this all of the time with their “Customers Who Bought This Also Bought …” But this one is algorithmic. The point of a cross sell is that it is relevant to the consumer, but it doesn’t necessarily have to be aligned with the original purchase. What you don’t want to do is start someone down one path and confuse them.

You can make this process easy with Bundles and Kits. With a bundle or a kit you’re essentially saying to someone, “you can buy just one piece, or you can get this bundle that does all of these other things for a little bit more. And it’s a higher value.”

The idea behind bundles and kits is that we are adding to the primary offer, not offering them something different. We’re simply promising to get them this desired result in higher definition. 

The Elements of High-Converting Revenue Maximizers (like our bundles and kits) are:

  1. Speed

If you’re an e-Commerce business, selling a physical product, this can look like: offering free shipping for orders $X or more. We’re looking to get your customers the same desired result, but with less work for them.

  1. Automation

If you’re a furniture business, and you want to add a Revenue Maximizer, this can look like: Right now for an extra $X our highly trained employees will come and put this together for you. 

  1. Access 

People will pay for speed, they’ll pay for less work, but they will also pay for a look behind the curtain. Think about the people who pay for Backstage Passes. Your customers will pay for a VIP experience just so they can kind of see how everything works. 

Remember, the ascension stage doesn’t have to stop. Once you have a customer, you should do your best to make them a customer for life. You should continue serving them. Continue asking them, “what needs are we still not meeting” and seek to meet those needs. 

It is your job as a marketer to seek out to discover these needs, to bring these back to the product team, because that’s what’s going to enable you to fully maximize the average customer value. Which is going to enable you to have a whole lot more to spend to acquire those customers and make your job a whole lot easier. 

Now that you understand the importance of the ascend stage, let’s apply it to our examples.

Hazel & Hem could have free priority shipping over $150, a “Boutique Points” reward program with exclusive “double point” days to encourage spending, and an exclusive “Stylist Package” that includes a full outfit custom selected for the customer. 

Cyrus & Clark can retain current clients by offering an annual strategic plan, “Done for You” Marketing services that execute on the strategic plan, and the top tier would allow customers to be the exclusive company that Cyrus & Clark services in specific geographical territories.

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