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2022 Research Report: Learn why employees are leaving their companies and what HR leaders can do about it.

How to Increase Employee Engagement and Retention

By Alex Larralde
Updated May 20, 2022
10 minute read

Do you have a plan for increasing employee engagement and retention at your company?

The Great Resignation is on every employer’s mind. In this tight labor market, employees have the upper hand — and they are expressing dissatisfaction with their jobs by leaving them in droves. The Bureau of Labor Statistics reports that, in February 2022 alone, 4.4 million employees voluntarily quit their jobs. That’s an alarming number and a trend your HR team has to address moving forward.

According to Betterworks’s 2022 State of Performance Enablement Research Report, the top reasons prompting employees to leave their jobs are better pay and benefits, as well as better career development opportunities. But the reasons employees leave your organization can be as varied as your employees themselves.

There’s no magic elixir to the problem of turnover. It requires understanding your employees and designing programs that meet their needs. Our research found that employees are almost three times as likely to be running from companies to get away from their old job (72%) as they are heading toward new companies for exciting new opportunities (28%). You can take control and create a better environment to minimize voluntary churn.

While no one-size-fits-all employee retention program will save your business from the effects of the Great Resignation, there are steps you can take to customize retention solutions for your workforce.

Here’s how to increase employee retention through company culture, learning opportunities, and focusing on health and wellness.

Why Is Employee Retention Important for an Organization?

Some turnover is expected, and businesses in industries where turnover is common (food service, sales or construction, for example) factor that rate into their talent strategies. Often, these separations are involuntary, the result of firings or layoffs. It’s voluntary turnover — employees who quit — that you have to watch out for.

High voluntary turnover can be very costly for your organization.

Replacing an employee with a new hire typically costs one-half to two times that employee’s annual pay — and with talent at a premium, you can expect that figure to land on the costlier end of the spectrum.

And the cost of turnover isn’t just financial: Losing employees means losing institutional knowledge and any resources you’ve invested in their training and development. You might also take a hit in morale for employees left behind.

Say you have a well-respected and long-tenured developer on your team. They’ve spent years collecting knowledge about the work itself, as well as your processes and practices — to the point that this employee understands how work happens on the dev team better than anyone else.

If that employee quits, they’ll leave substantial gaps in knowledge and may even inspire loyal colleagues to go with them.

All of these things can set your business back significantly. With so much at stake, it’s clear that you have a better chance of delivering business results smoothly and effectively when you reduce employee turnover.

How to Increase Your Employee Retention Rate

There are many reasons why employees leave their jobs. You need to survey your employees to determine what to prioritize. For example, you may provide a positive company culture and healthy work-life balance, but your employees still may not feel like they’re receiving the feedback and resources they need to succeed.

Managers and team leads play a pivotal role in most potential remedies. There are 100 or more employees per HR person in many organizations on your team. Using your resources strategically requires bringing those who are closest to employees into the mix.

Consider these elements when developing your strategy for increasing employee engagement and retention.

Improve Employee Work-Life Balance

Employees don’t want to spend all of their waking hours at work: To retain employees, you have to acknowledge work-life balance and facilitate it. Many people would prefer to take a pay cut to work a less stressful job than stay in a role that doesn’t allow for downtime.

Audit workloads to ensure everyone has the appropriate amount of work per day, allowing for personal time. Train managers to monitor workloads more closely and be more aware of when their team members become overwhelmed.

A lot of this comes down to simple communication. When managers and team leads talk to their employees regularly, they’ll find it easier to recognize when someone is dissatisfied with their workload or even approaching burnout. Having these conversations far ahead of deadlines helps you adjust schedules with minimal disruption to your deliverables.

Provide the Tools and Training Your Team Needs to Succeed

Ongoing employee training is crucial for engaging and maintaining your workforce. No one wants to be assigned a task without any of the resources they need to perform it. If employees feel like you’re setting them up for failure, they’re not likely to stick around.

So how does training increase employee retention? Employees can more easily focus and get the job done with a better understanding of what they’re doing — and the resources they need to do it.

Ensure that all of your managers know about training resources available for each role on their team. When an employee expresses the need for additional tools or resources to do their job, managers should be able to help them find the right training programs quickly.

Of course, not every employee will be that open about their needs — or even aware of them. Managers have to distinguish between poor performance and when someone simply doesn’t feel equipped to perform at a high level.

Invest in Mentorship Programs

One of the biggest mistakes companies make is not investing in learning and development. Employees need to see that you’re willing to invest resources into their potential. A mentorship program is one of the best ways to develop employees and engage the entire workforce.

In fact, our research found that 13% of employees are actively looking for opportunities for mobility within their current company. Providing resources for prioritizing career development conversations is an essential component of a healthy employee engagement strategy.

A mentorship program offers individual employees targeted feedback on their career trajectory, along with advice for achieving their goals. Developing the program internally helps you make connections between employees across the workforce. You may pair an incoming employee with someone in their dream role, for example. That improves mobility and creates a better employee experience — each an important factor in employee retention.

Mentorship programs are also instrumental in helping employees from historically excluded groups overcome structural barriers to mobility. Creating an environment where everyone can succeed, regardless of their background, is essential for retaining top talent.

Implement Continuous Positive Feedback

Employees crave feedback. To maintain their job satisfaction, employees need regular recognition and direction. Continuous feedback focused on employee strengths can provide a line of communication with managers that helps employees remain engaged in their work.

Yet, our research reveals that two-thirds of employees don’t receive one-on-one feedback and coaching from their direct manager more than twice per year. Without frequent feedback, team members are left wondering how they’re performing, and they can feel lost and disconnected. If they only hear from managers when they do something wrong, employees will feel undervalued.

Train managers to give employees recognition and feedback in the flow of work. Help them understand the purpose of providing feedback to employees and the importance of keeping that feedback constructive and positive. Provide resources to help managers talk about future-oriented performance topics and not get caught up in task details.

Challenge Your Team — in a Balanced Way

Employees need to feel challenged to remain engaged in their work: If they’re doing the same thing every day for years, they’ll inevitably lose interest. Provide opportunities for employees to conquer relevant challenges in their day-to-day work.

These challenges should be healthy rather than toxic. Examples include solving a business problem or giving employees added responsibility. Job-related challenges, like asking an employee on a leadership track to lead a project, can help them progress along their ideal career development path.

Objectives and key results (OKRs) are a good starting point. Ideally, each employee has one to three objectives to achieve per quarter. Managers can collaborate with employees to design objectives that drive the business while giving employees an opportunity to take on challenging work that’s related to their career aspirations.

Allow for Flexible Work Arrangements

In addition to work-life balance, employees need flexibility to work when, where, and how they work best. This is especially important for caregiving employees, who have to balance the needs of their families against the demands of their jobs. If you don’t offer flexible work arrangements, these employees — often women, who bear the brunt of caregiving responsibilities — will leave your company for one that does.

But when employees have the freedom to fit work into their lives instead of work controlling their lives, they’re more likely to show loyalty to your company. Organize workloads and deadlines to allow employees the flexibility to work the hours that fit their schedules.

Offer Competitive Wages and Benefits

Competitive paychecks are an absolute necessity for your employees. If team members can earn better pay doing the same work at another job, they’re much more likely to consider leaving. Of course, money isn’t everything — employees often leave jobs for other reasons. But financial stability and the ability to care for their families’ needs is a powerful motivator.

Competitive wages and benefits are essential for retaining your workforce. Regularly research the latest trends in pay for each role at your company. Upgrade pay bands frequently to reflect the larger market, and survey employees to determine which benefits are most important for your workforce.

Address Workforce Pain Points

Acknowledging workforce pain points and putting a plan in place to address them demonstrates that you’re listening to employees. Collect employee feedback to increase retention in your workforce. Conduct exit interviews when employees leave, and survey your employees frequently to find out what you’re doing well and what you could be doing better.

Put a plan in place to address the pain points you discover. If employees know that you’re aware of their problems but do nothing to address them, employee morale will go down, which may lead to higher turnover. But if they see you making an effort to address their pain points, employees will be more willing to stick around and give you a chance.

Of course, you can’t solve every problem universally. It’s important to communicate what you can do to address their pain points — and if you can’t do anything, to explain why.

Encourage Creativity and Innovation

Don’t cultivate a company culture that encourages conformity. Employees need to be able to express themselves and their ideas in the workplace. When employees have the freedom to share their ideas without fear of rejection or judgment, they’re more likely to become engaged in their work.

Encourage employees to cultivate new ideas and innovations, especially as they relate to their daily workload. Provide channels for employees to share their ideas with co-workers and company leaders. Creating a culture where employees feel safe innovating and suggesting changes will help you retain employees who have something to contribute.

Not every employee may have ideas to contribute, and that’s OK, too. Just knowing that leaders are not only willing but happy to hear their ideas goes a long way toward driving higher morale.

Prioritize Culture and Connection

Company culture will make or break your retention strategy. If employees feel welcomed and integrated into your company culture, retention will rise. But if they feel that your culture is toxic and draining to be a part of, they’re more likely to leave.

A positive company culture will help you both attract and retain top talent. But be sure to be authentic about what your culture is really like. Employees are in the thick of it, and they can quickly spot the lack of alignment between how you advertise your culture and what it’s really like. That type of misalignment can destroy employee trust.

Ask employees for their input when assessing and designing culture. Employees will be happy to have a say in the culture they live every day.

Connection is an extremely important component of culture, and it’s something you have to deliberately cultivate — especially in hybrid and remote environments. When employees feel connected to each other, their leaders, and the business, their engagement and loyalty will go up.

Wellness Programs as an Employee Retention Tool

Wellness programs today are more comprehensive than in years past. Since the pandemic began, more employers are recognizing that you can’t separate employees from other aspects of their lives, but you can take steps to make their lives better.

Traditionally, wellness programs have focused on physical health with items such as wellness screenings, on-site immunizations, or smoking-cessation programs. But today, physical health is only one piece of wellness programs. They often include mental and financial health as equally important components.

Offering a comprehensive suite of health offerings demonstrates your investment in supporting your employees’ well-being, which improves loyalty and allows employees to become more engaged in their work. When their lives are better outside of work, and employees are coming to work happier and healthier, employee experience improves.

How Can Wellness Programs Increase Employee Retention?

Wellness programs produce multiple employee benefits that drive retention. They generally lead to better overall health, help employees cope with or prevent illnesses, and decrease the stress employees experience.

All of these benefits contribute to a healthier workplace and happier employees. And when you’re responsible for offering the benefits that produce these effects, employees will associate your organization with those positive outcomes.

Of course, there is the caveat that employees have to use your wellness program to benefit from it. Be sure to communicate the available programs and how employees can use them. Address concerns employees may have, such as privacy in using the benefits or whether they can be used on company time.

When you have a wellness program that employees actually use, you can drive your talent strategy. Here’s how a comprehensive wellness program increases employee retention.

Reduce Stress

When you take care of your employees’ needs through a comprehensive wellness program, you can influence their stress levels. Health and financial concerns are significant sources of stress for employees.

Team members could be dealing with sick kids or struggling to keep up with their student loans. Providing resources to mitigate these concerns frees employees up to engage with their work without feeling distracted by personal stressors.

Improve Teamwork

Employee wellness programs can support social health, too. Mental health resources can help employees gain more self-awareness, which can help them function better in teams. And being happier allows employees to connect with colleagues better.

Healthy, engaged employees are better equipped to have positive, constructive interactions with colleagues. Your wellness program can produce these collateral benefits. When employees can interact more positively with their teammates, their workplace experience improves.

Reduce Health Expenses

Health care expenses are ever on the rise, and that can be a significant source of stress for your workforce. Active participation in a wellness program can improve employee health outcomes.

Most wellness programs focus on preventative care, such as fitness, healthy eating habits, and proactive mental wellness. Preventive care can help employees control illnesses and minimize the need for hospitalization, significantly reducing employee health expenses.

Minimizing health costs is a huge motivator for employees to remain with your company. Any programs you can implement that can produce these effects could be a differentiator for your employer brand.

Boost Productivity

With stressors and health concerns under control, employees can become more engaged in their work. That contributes to higher productivity across the workforce. And when employees feel more productive and accomplished, they derive a greater sense of purpose from their work.

Fostering productivity and purpose go a long way toward decreasing voluntary turnover. When they can see what they’re working toward, employee job satisfaction will improve, creating better outcomes for retention.

Improve Morale and Loyalty

When employees feel better, as in healthier and less stressed, their morale increases. And they’re more likely to be loyal to a company that contributes to a greater sense of health and happiness. If you can offer a wellness program that’s both well-received and heavily used by your workforce, you’re well along the path to better retention.

Increase Employee Engagement and Retention to Drive Business Results

Employees are leaving their jobs for a multitude of reasons. Communicating with employees through surveys and conversations with managers can help you nail down what’s most important to address for your workforce.

Knowing how to increase employee engagement and retention requires that you address employee concerns and create a culture where every employee feels respected and valued for the work they do.

Discover the 5 best practices for employee retention.

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