What does retention rate mean?

Retention rate refers to a company's ability to keep quality employees for long periods of time. Retention rates are often shown in percentages. The goal for an organization's employee retention rate is for it to be high.

There are many contributing factors to employee retention rates. Here are some ways to improve retention rates at your company:

• Offering incentives to employees

  Incentives are a powerful strategy to motivate your employees and give them a good reason to remain working for your company. When you give your employees rewards for achieving clearly defined goals and objectives it promotes them to continue to strive for excellence in your organization. Here are some options for incentives:

  • Commissions

  • Performance-related bonuses

  • Other bonuses

  • Simple rewards

  This boosts overall morale, helps keep your team on track, and your employee retention rate up.

• Give promotions to internal employees

  Always hiring outside professionals for mid-level and senior-level roles can damage employee morale and adversely affect your employee retention rate. As much as you can you should attempt to promote from within your organizations for these roles. When employees see that hard work is rewarded with better-paying roles they tend to stick around for the long term.

• Offer more vacation and paid time off

  Another way to boost employee retention rates and stave off burnout is to offer more vacation and/or paid time off. Many employees choose not to take their allotment of vacation days, and this can result in many negative outcomes. You should not only offer more paid vacation days but also proactively encourage your employees to use them.

• Show gratitude

  Saying "thank you" can actually go a long way in terms of improving morale and retention rates at your company. It shows them that you respect them and appreciate their hard work. There are many different ways you can show gratitude to your employees, including:

  • Writing employees personalized thank you notes

  • Taking staff out for celebratory lunches or dinners

  • Doing something special for employee birthdays

  • Handing out gift certificates for accomplishments or when employees work extra hours

  • Giving employees public recognition for accomplishments at team meetings

  All of these options help employees to understand their value, and result in them feeling appreciated, and motivated to stay committed to their jobs.

• Find the proper work-life balance

  Finding the right work-life balance is critical if you want to improve your employee retention rates, and it is also a great way to combat burnout. Companies with poor work-life balance policies often experience high turnover rates among employees. Here are some options for promoting a healthy work-life balance with your staff:

  • Offering employee memberships or discounts to gyms, fitness clubs, or wellness centers

  • Bringing in an instructor to help teach employees stress-reducing methods, such as meditation or yoga

  • Giving your employees Friday off once a month

  • Remote working opportunities for employees

  • Flexible days that can be worked in-office or at-home