What Is A Good Employee Retention Rate

What is a good employee retention
rate?
A retention rate of 99% may not always be good. Some turnover is helpful to allow
for opportunities for growth within the organization and also opportunities to bring
in external talent. You might also want to get rid of low-performing employees
through voluntary turnover.
In general, your organization should be aiming for high functional retention and
reasonable functional turnover.
The average retention rate in the US is at 90% – however, it does vary by industry
and sector. It’s important to calculate the retention rate per position or department,
as some positions can be in more demand than others, depending on the labor
market. For example, LinkedIn found that user experience designers had a higher
turnover (23%) than most positions, so retaining employees with this skill would be
an obvious priority.
How to improve employee

retention rate
What can HR professionals do to increase employee retention at their organization?
1. Hire with retention in mind

This is especially important in high turnover industries like retail, hospitality, or
contact centers. For example, provide your candidates with a realistic job preview
and manage their expectations in the recruitment process so that they are aware of
what the job and the company are like. Also, hire candidates that resonate with
your company values. During the interview process, get a realistic understanding of
the candidate’s expectations and intentions. You may also want to look at a
candidate’s previous tenure with other employers.
Recruiting with retention in mind will help you ensure higher new hires’ job
satisfaction, as well as a lower turnover rate in the first year.
2. Listen to and act on employee feedback
This is feedback gathered from engagement surveys, employee focus groups, but
also from exit interviews. What can you do to make employees stay? It’s essential to
act on engagement surveys, as a lack of action can cause employee resentment and
dissatisfaction and also a generally negative attitude towards engagement surveys
going forward.
You need to act on feedback on an organizational level (such as possibly investing
in a new platform) but also on an individual level (such as sending employees on
specific development programs or giving certain high-potential employees stretch
projects). It might also be helpful to pay special attention to high-potential and
critical skill employees because they are in high demand and low supply. You also
need to keep tabs new employees to prevent early turnover.

3. Boost employee engagement
Engaged employees are likely to stay with the company longer. That’s why you need
to put a solid employee engagement plan in place. Small things you can do to
improve employee satisfaction and engagement including an increase in learning
and growth opportunities, transparent promotion procedures, health insurance,
parental leave policy, diversifying rewards, recognition, and perks, and providing
meaningful work.
What’s more, encouraging a healthy work-life balance helps prevent employee
burnout.
4. Work on your company culture
Organizational culture and values have an impact on employee retention. Always
look for ways to make your organizational culture more inclusive and promote
belonging. To improve company culture, always look at results from your
engagement surveyed and be aware of the external environment you’re operating
in. Company culture and work environment take a long time to develop and
then transform, so it’s important to always be consistent and work on long-term
plans.
5. Promote professional and personal

development
Employees who see that their employer invests in their training and development
are more likely to stay with the organization. That’s why you should focus on
developing your employees’ skills and competencies and chart clear career
paths for them. Most of the time, organizations invest heavily in learning and
development opportunities and resources; however, when reviewing the stats from
learner management systems, usage can be quite low. Learning and development
opportunities, therefore, need to be purposeful and just-in-time.
If an employee acquires a new skill through learning/development, it should impact
their career and the opportunities they get to display this skill. Leaders in the
organization are also responsible for creating a learning culture by showcasing
their intent on developing themselves through various programs.

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What is a good employee retention

through voluntary turnover.

reasonable functional turnover.

How to improve employee

1. Hire with retention in mind

candidate’s previous tenure with other employers.

satisfaction, as well as a lower turnover rate in the first year.

2. Listen to and act on employee feedback

dissatisfaction and also a generally negative attitude towards engagement surveys

You need to act on feedback on an organizational level (such as possibly investing

in a new platform) but also on an individual level (such as sending employees on

specific development programs or giving certain high-potential employees stretch

projects). It might also be helpful to pay special attention to high-potential and

need to keep tabs new employees to prevent early turnover.

improve employee satisfaction and engagement including an increase in learning

and growth opportunities, transparent promotion procedures, health insurance,

What’s more, encouraging a healthy work-life balance helps prevent employee

4. Work on your company culture

Organizational culture and values have an impact on employee retention. Always

belonging. To improve company culture, always look at results from your

engagement surveyed and be aware of the external environment you’re operating

then transform, so it’s important to always be consistent and work on long-term

5. Promote professional and personal

opportunities, therefore, need to be purposeful and just-in-time.

If an employee acquires a new skill through learning/development, it should impact

organization are also responsible for creating a learning culture by showcasing

their intent on developing themselves through various programs.

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