term paper of employee retention

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It’s Time to Reimagine Employee Retention

• Helen Tupper
• Sarah Ellis

Three ways to increase the chance that top talent sticks around.

According to Gartner, the pace of employee turnover is forecast to be 50–75% higher than companies have experienced previously, and the issue is compounded by it taking 18% longer to fill roles than pre-pandemic. Increasingly squeezed managers are spending time they don’t have searching for new recruits in an expensive and competitive market. Unless efforts are refocused on retention, managers will be unable to drive performance and affect change. Leaders need to take action to enable their managers to keep their talent while still being able to deliver on results. Managers need help with three things. First, they need help shifting the focus of career conversations from promotion to progression and developing in different directions. Second, they need help creating a culture and structure that supports career experiments. Finally, managers need to be rewarded not for retaining people on their teams but retaining people (and their potential) across the entire organization.

This is a challenging time for managers. Alongside their day-to-day roles, many are facing a never-ending cycle of reskilling and recruiting on their teams. The need to reskill isn’t new, with the OECD estimating that 1.1 billion jobs are liable to be radically transformed by technology in the next decade. However, managers are now being asked to close the skills gap at the same time as they’re responding to pandemic-prompted resignations.

• Helen Tupper is the co-founder and CEO of Amazing If , a company with an ambition to make careers better for everyone. Together with her business partner Sarah Ellis, she is the author of two Sunday Times bestsellers, The Squiggly Career  and Y ou Coach You . Sarah and Helen are also hosts of the podcast Squiggly Careers, which has had 4m downloads, and their TED talk, The best career isn’t always a straight line , has been watched by almost 2m people.
• Sarah Ellis is the co-founder of Amazing If , a company with a mission to make careers better for everyone. Together with her business partner Helen, she is the author of two Sunday Times bestselling books, The Squiggly Career and You Coach You. Sarah and Helen are also hosts of the podcast Squiggly Careers, which has had 4m downloads, and their TED talk, The best career isn’t always a straight line , has been watched by almost 2m people.

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Retaining Healthcare Workers: A Systematic Review of Strategies for Sustaining Power in the Workplace

Neeltje de vries.

1 Department of Internal Medicine, Spaarne Gasthuis, P.O. Box 417, 2000 AK Haarlem and Hoofddorp, The Netherlands

2 Spaarne Gasthuis Academy, P.O. Box 417, 2000 AK Haarlem and Hoofdorp, The Netherlands

Olivia Lavreysen

3 Centre for Environment and Health, University of Leuven (KU Leuven), P.O. Box 952, 3000 Leuven, Belgium

José Bouman

Szymon szemik.

4 Department of Epidemiology, School of Medicine in Katowice, Medical University of Silesia, 40-055 Katowice, Poland

Kamil Baranski

Lode godderis.

5 IDEWE, External Service for Prevention and Protection at Work, 3000 Leuven, Belgium

Peter De Winter

6 Department of Paediatrics, Spaarne Gasthuis, P.O. Box 417, 2000 AK Haarlem and Hoofddorp, The Netherlands

7 Leuven Child and Health Institute, University of Leuven (KU Leuven), P.O. Box 3717, 3000 Leuven, Belgium

8 Department of Development and Regeneration, University of Leuven (KU Leuven), P.O. Box 611, 3000 Leuven, Belgium

Associated Data

The authors confirm that the data supporting the findings of this study are available within the article and/or its Supplementary Materials .

The shortage of healthcare workers is a growing concern. The COVID-19 pandemic and retirement wave have accelerated turnover rates. This systematic review aimed to identify and analyse the existing interventions for job retention of healthcare workers, in terms of nurses and physicians, in a hospital setting. A comprehensive search was conducted within three electronic databases, guided by the preferred reporting items for systematic review and meta-analyses (PRISMA) and synthesis without meta-analysis (SWiM) guidelines, this resulted in 55 records that met the inclusion criteria. The intervention outcomes are categorized into substantial themes: onboarding, transition program to a different unit, stress coping, social support, extra staffing, coping with the demands of patient care, work relationships, development opportunities and department resources, job environment, work organization, recruitment approach, and technological innovations. Considering the literature, onboarding programs and mentoring for nurses and physicians are recommended. Additionally, other interventions described in this review could positively affect the retention of nurses and physicians. When selecting an intervention for implementation, managers and human resources should consider the intervention that matches the determinant of intention to leave of their healthcare workers and the hospital’s mission, vision, and values. Sharing the success stories of implemented interventions may benefit healthcare organizations.

1. Introduction

Worldwide, there is a growing concern about the number of healthcare workers, which currently suffers from a shortage of 5.9 million nurses [ 1 ] and 4.3 million doctors [ 2 ]. Turnover rates were accelerated by the COVID-19 pandemic. For example, a study in the United States revealed that 18% of healthcare workers left their jobs as a result of the pandemic [ 3 ]. Furthermore, the outflow of healthcare workers leaving the hospital will also increase in the future with the retirement of healthcare workers. Globally, about 17% of all nurses are expected to retire within the next ten years. In particular, the ageing workforce in the United States and Europe means that retirement rates will remain high over the next ten years [ 1 ].

Furthermore, the healthcare system is struggling to recruit the younger generation of healthcare workers who deem the nursing profession unattractive due to salary or low job status [ 4 ] and physicians deem the medical profession due to a lack of training positions and the lack of salary comparing to their working conditions [ 5 , 6 ]. These arguments for why younger generations of nurses and physicians are less willing to start a healthcare career also explain the push and pull factors resulting in the international migration of healthcare personnel. Lots of physicians are mentioning working in high-income countries and strained healthcare systems such as Australia, New Zealand, and Central Asia, instead of low- or middle-income countries or less-strained countries (e.g., Ireland, the United Kingdom, or sub-Saharan Africa) [ 7 , 8 , 9 ]. This migration process results in an enlarging shortage of physicians in these countries with a tremendous shortage of doctors [ 7 , 8 ].

Altogether, this looming crisis demands a coordinated response with the government, health organizations, and other stakeholders working together to ensure that healthcare workers have the support they need to remain in the field.

The turnover rate of nurses and physicians poses substantial financial and non-financial burdens for healthcare organizations [ 10 ]. Multiple studies have found an association between nurse staff turnover and patient outcomes such as patient health [ 11 ], length of stay of hospitalized patients [ 12 ], and quality of care [ 13 ]. Physician turnover has also been shown to affect patient care costs by disrupting the continuity of care and causing dissatisfaction in patients who have lost their current provider or the need to establish a new relationship with another provider [ 14 ]. Moreover, high turnover rates reduce staff productivity because there is limited personnel to complete the tasks [ 15 ]. This can lower the morale of the remaining staff [ 16 , 17 ] and may lead to additional turnover among the remaining employees [ 14 ]. As a result, healthcare organizations incur enormous costs associated with recruiting, hiring, and instructing new personnel [ 18 , 19 ]. In the United States, the recruitment cost per nurse vacancy has been estimated between USD 10,000 to USD 88,000 [ 18 ], while costs for physician recruitment are even higher, ranging from USD 88,000 to USD 1,000,000 per physician [ 14 , 19 , 20 ].

Aside from the financial problems caused by turnover, frequent staff turnover can decrease the job satisfaction of healthcare workers and trigger them to leave the profession. In addition, this process results in a loss of knowledge and experience in the healthcare profession [ 14 , 21 ].

In view of the many problems associated with turnover, it is crucial to minimize the impact of the shortage of nurses and physicians by retaining them in their hospital. Furthermore, retaining nurses and physicians will improve patient health, length of stay, and quality of care. However, an overview of interventions which are effective for retaining nurses and physicians in hospitals is lacking. To address this issue, this systematic review aims to identify and analyse the current interventions that minimize nurse and physician job retention in a hospital setting.

This systematic review constitutes the starting point of an EU-funded project named METEOR (MEnTal hEalth: fOcus on Retention of healthcare workers) [ 22 ].

2.1. Design and Population

The systematic review was carried out in accordance with the Preferred Reporting Items for systematic review and meta-analysis (PRISMA) statement [ 23 ] and the synthesis without meta-analysis (SWiM) reporting guidelines [ 24 ]. PRISMA checklist and SWiM items can be found in Supplemental S1 . At the international prospective register of systematic reviews (PROSPERO), the systematic review has been recorded, CRD42022364748.

To create homogeneity in the results, the population studied in this review included healthcare professionals in terms of nurses and physicians in a hospital setting.

2.2. Data Sources and Searches

The conducted literature search string in this systematic review was identical to the earlier published systematic review of De Vries et al. [ 25 ]. De Vries et al. [ 25 ] used the outcomes including determinants impacting retention, whereas this current study included studies on how to improve retention. The design of the search string was set up using the domain, determinant and outcome framework. The domain contained the following synonyms: ‘health personnel’, ‘healthcare workers’, ‘healthcare providers’, ‘healthcare professionals’, ‘health workforce’ and ‘health workers’, ‘nurses’, ‘nurse’, ‘nursing personnel’, ‘physicians’, ‘physician’ or ‘doctor’. Synonyms for the domain were ‘determinants’, ‘factors’, ‘predictors’, and ‘interventions’. As outcomes, the following terms were used: ‘personnel turnover [Mesh]’, ‘personnel turnover’, ‘retaining personnel’, ‘job retention’, ‘retention rates’, ‘turnover intention’, ’intention to leave’, ‘intention to quit’, ‘intention to stay’. The synonyms in selecting domain, determinant, and outcome were combined with OR. The overall domain-, determinant-, and outcome sections were combined with AND [ 25 ]. The entire search string is consultable in Supplemental S2 .

The search string was developed in Cinahl, Embase, and PubMed in the week of 18 July 2022 [ 25 ].

2.3. Screening and Data Extraction

Articles were included if they were conducted between 2012 and July 2022 and if the intervention was applied to healthcare workers, namely nurses and physicians. The included manuscript must be written in English, and the research must be conducted in a hospital setting. Study designs such as systematic reviews, thesis, guidelines, and study protocols were excluded. Furthermore, the study was excluded if the full text was unavailable. There were no restrictions in sampling choice. After screening the title and abstract the full texts were studied. Three pairs of two independent reviewers (AB, KK, OL, SS, NdV, and PdW) conducted the screenings.

Furthermore, quality assessment was conducted using the Mixed Methods Appraisal Tool (MMAT) version 2018. The MMAT was selected because of the heterogeneity of study designs included in this systematic review. The same pair of reviewers conducted the quality assessment independently to decrease the change of bias. Disagreement about study eligibility was resolved through consensus discussion or by an extra author, not a duo member. To show an overview of the quality of included articles, a quality rating was calculated showing an overall score. Answering ‘Yes’ in the MMAT tool counted for one point, whereas answering ‘No’ counted for zero points in the overall score. If a quality criterion was answered with ‘Cannot tell’, more information was needed to give a legit answer in terms of ‘Yes’ or ‘No’ [ 26 ] and the criterion was not included in the overall score. The final overall score is an overview. An overall score of zero points is labelled as a bad-quality study. All other scores are labelled as non-bad quality studies. The overall score of the quality assessment does not reveal what aspect of the assessment is questionable [ 27 ]. Therefore, it is desirable to scale the overall score with the complete quality assessment screening, which will be shown in Supplemental S3 .

Data were extracted into multiple characteristics: type of study, country, type of healthcare worker (physicians or nurses), sample size, the department where the intervention took place, description of the intervention, and results on the micro-level, meso-level and macro-level. Micro-level: refers to the individual level of analysis, such as a person’s behaviour. Meso-level: refers to the study of groups of people and their interactions, such as organizations and communities. Macro-level: refers to the study of large-scale phenomena and the broader forces that shape society, such as political, economic, and cultural systems. Furthermore, the factors that influence the effectiveness of the intervention were described, and an additional check was done on whether a price analysis was conducted.

Due to the heterogeneity between studies regarding the study designs and outcome measures, a meta-analysis was not conducted.

The literature search resulted in 5177 articles. Before screening 1126 duplicates were removed and 178 duplicates were detected automatically by an application. The detected duplicates were checked by the author and removed by hand. The remaining papers were checked by hand for any missed duplicates by the application. This resulted in 948 extra duplicate papers which were removed. Moreover, 152 records were removed due to foreign language. In total, 3899 records were screened on inclusion and exclusion criteria, and 219 documents were assessed for eligibility. After reading full texts, 162 records were excluded for not fitting the inclusion or exclusion criteria. Two records were excluded due to bad quality [ 28 , 29 ]. For full quality assessment, Supplemental S3 can be consulted. Finally, 55 records were included in this systematic review ( Figure 1 ).

PRISMA flow diagram.

3.1. Methodological Characteristics of the Studies

Of the included records, 85.5% ( n = 47) were quantitative research, 9% ( n = 5) were qualitative research, and 9% ( n = 5) were mixed-method studies. Of the included studies, 83.6% ( n = 46) focused on nurses, 7.2% ( n = 4) on physicians, 3.6% ( n = 2) on both, and 7.2% ( n = 4) on others (including nurses and physicians). Most studies were completed in the US (43.6%) or Asian (27.3%) countries. The quality of records differed, as shown in Table 1 .

Data-extraction table and quality assessment summary of included records.

a The quality assessment was conducted using the Mixed Methods Appraisal Tool (MMAT) (version 2018). ‘Yes’ counted for one point and ‘No’ for zero points. In case a quality criterion was answered with ‘cannot tell’, more information was needed to give a legit answer in terms of ‘yes’ or ‘no’ [ 26 ]. Therefore, this criterion is not included in the overall score.

3.2. Intervention Outcomes

An overview of the data extraction of the records in terms of micro-level, meso-level, and macro-level results and factors influencing the effectiveness of the intervention are shown in Table 2 . The included interventions are subdivided into twelve themes described in the following paragraphs.

Data-extraction table micro, meso, macro results and factors influencing the effectiveness of the intervention.

3.2.1. Onboarding

Multiple records have described that new nurses feel overwhelmed in the transition from student towards their new role as nurse [ 57 , 62 , 75 , 77 ], which suggests supporting those healthcare workers during this transition period can be beneficial. In addition, onboarding, the terminology used to describe new employees joining and integrating into the organization [ 85 ], is an important item.

Four of the included studies mainly focused on the onboarding program on the transition from nursing school towards the first job as a nurse and started at the last stage of nursing school [ 34 , 57 , 62 , 77 ]. First, Tseng et al. [ 77 ] studied an extensive externship program (EP), the Corporate-Academic Cooperation Program (CACP), to bridge the gap from nursing school to a clinical setting. During the CACP there was more focus on practicum arrangement, courses (e.g., career education and seminars), and establishing a collaborative partnership between the school and hospital. The control group received the standard EP. Students who participated in the CACP achieved a statistically significant improvement in retention rates relative to those who participated in the EP ( p < 0.05) [ 77 ].

Furthermore, Kaihlanen et al. [ 62 ] studied the effect of the final clinical practicum (FCP) in Finland. The FCP focuses on student preparation for the upcoming transition to working life. FCP uses elements such as gaining learning experience mirroring the real work as graduated, being a professional team member, and receiving adequate support and supervisory relationships. They found a significant association between turnover intention and FCP (β = 0.21, p < 0.001).

To continue, Hernandez et al. [ 57 ] implemented the University of New Mexico College of Nursing (UNM CON)/University of New Mexico Hospital (UNMH) internship program in Mexico for new graduates. The focus of this internship program contained six items: focusing on organizing work and setting priorities, communicating effectively, developing clinical leadership skills, developing technical skills which are needed to provide safe care, practising quality care with actually sick patients, and learning to work in an emergency or end-of-life setting. A total of 43.3% of the participants who could have been employed for five years remained employed at the hospital after the internship program. In addition, 63.6% of the participants who remained employed at the hospital for five years or more continued to work in the exact location they had at the first year of their employment. There is no statistical test adjusted to study the retention rates.

Finally, The Academic Partnership Program (APU) of Aull et al. [ 34 ] included an evidence-based clinical education program designed to train, recruit, and retain Bachelor of Science students towards Bachelor of Science in Nursing (BSN) prepared nurses without the need for an academic faculty. The APU is a practice of students in a home-based department with a nursing preceptor serving as a clinical instructor. The students work with their instructor on multiple units as long as the program continues, which helps to integrate the student into the culture of their assigned unit. As a result, the turnover rate reduced from 23.9% nationally to 7% after the APU.

Six of the included studies focused on their onboarding program for new graduates [ 37 , 40 , 42 , 63 , 67 , 73 ]. Blegen et al. [ 37 ] studied the effect of a structured transition-to-practice (TTP) program for new graduates containing multiple online modules. The preceptor of the hospital needed to complete an online model for introduction to the TTP program, described the difference in high and low preceptor support, and the effect of this support program for new graduates. They found a difference in outcomes of new graduates getting high preceptor support (HPS) versus low preceptor support (LPS). The retention rates of HSP hospitals were higher (86%) at the end of the first-year program, whereas only 80% of the hired students at LPS hospitals were retained ( p > 0.01) [ 37 ]. This shows that the intensity of preceptor support is an important factor in a mentorship program for onboarding new graduates [ 37 ].

In addition, Kang et al. [ 63 ] developed a situational initiation-training program (SITP). SITP focuses on the preceptor aiming to reduce stress levels and intention to leave of new graduates who have support from the preceptor. SITP contained four courses: “Covered preceptor roles, functions, and responsibilities; communication skills; stress management skills and relationship maintenance skills.” [ 63 ]. During the first preceptorship year, the new graduates showed low to shallow intentions to leave their current job at month three (mean = 4.18), six (mean = 3.8), nine (mean = 4.87), and twelve (mean = 2.6) [ 63 ].

Furthermore, Rudin et al. [ 73 ] studied the effect of the mentorship programme in Malaysia. The results showed a positive impact of the mentorship program on remaining in the nursing profession (r = 312, p = 0.001), though it is unclear how this mentorship program was set up in detail [ 73 ].

Koneri et al. [ 67 ] studied the one-year residency program with six touchpoints to focus on during the program. Touchpoints are defined by Koneri et al. [ 67 ] as: “distinct points in the company-customer experience.”. Whereas, employees are customer types of a company, Koneri et al. [ 67 ] designed a six-touchpoint program including: recognizing intrinsic worth (by sending personalized cards), developing loyalty (success stories featured in the newsletter), respect and dignity (monthly coffee-and-chat opportunities), valuing (organization of development day, educational events and sharing positive experiences) and trusting (inter-professionals teams focusing on communication, leadership, situation monitoring, and newly nurses’ support). The touchpoint program had a positive effect on retention rates compared to the non-intervention cohort ( p < 0.00). The program had a cost-effective impact on retention (USD 180 versus USD 47,000) [ 67 ].

Additionally, Chen et al. [ 42 ] studied a three-month adaptive education program on learning, mental health, and work intentions. The education program led to an increase in the turnover rate of 12.6%, after three months of implementation, towards an 87.9% one-year retention rate. Unfortunately, no comparison is available for these turnover rates before implementation [ 42 ].

Lastly, Çamveren et al. [ 40 ] tested an organizational socialization model-based preceptorship program for nurses focusing on new graduates in transition. The preceptor must support the new graduate. The program contained preceptor training and support meetings for newcomer nurses. Both components contained feedback moments, which were used to improve the preceptorship program. At the end of the one-year program, there was no significant difference compared to the baseline in nurses’ intention to leave the unit or profession. Moreover, after the program, the results showed a significant increase in the nurses’ intention to leave their organization (t = −4.153, p < 0.001) compared to the year before. This study showed that not all preceptorship programs positively impact retention rates [ 40 ].

Three studies focused on a mentorship program regarding the onboarding [ 51 , 80 , 83 ]. Fleig et al. [ 51 ] described the effect of interpersonal mentoring as support for healthcare workers. Healthcare workers who received more interpersonal mentoring were more affectively committed to the organization (r 2 = 0.35, F (3, 144) = 25.83, p < 0.01). This affective commitment moderated the effect of knowledge transfer and turnover intentions. Respondents who reported higher levels of knowledge transfer considered leaving the organization when their affective commitment was low. Though, knowledge transfer showed no significant direct relation with turnover intention (r 2 = 0.09, F (3, 141) = 4.57, p < 0.01). The direct impact of the mentoring program on turnover intention was lacking [ 51 ].

Secondly, Williams et al. [ 80 ] focused on one-to-one mentorship, which was defined as “where a single mentor is assigned to a mentee”. The participants who received one-to-one mentoring rated the experience in helping transition to practice, professional development, and stress management higher than their colleagues. There was no significant relationship found between turnover intention and the two types of mentoring [ 80 ].

Last, Zhang et al. [ 83 ] investigated the one-to-one mentorship program for one year, where the mentee and mentor mainly focused on individual career development and the relationship, social support, and role modelling between both. They compared this mentorship program with a basic preceptorship program. For the one-to-one mentorship program, the mentor received an orientation program of four hours that focused on developing mentoring skills. The one-to-one mentorship program resulted in a significantly lower turnover rate (3.77%) in the first year than the control group (14.07%). The rates in the second and third years were not different [ 83 ].

Most of the above articles have affirmed the positive impact of onboarding programs on retention rates [ 37 , 42 , 51 , 57 , 62 , 67 , 73 , 77 , 80 , 83 ].

3.2.2. Transition Program to a Different Unit

Three studies focused on the transition to a different unit [ 54 , 71 , 75 ]. Morphet et al. [ 71 ] studied the Transition to Specialty Practice Program (TSPP) for novice nurses entering a nursing specialty. TSPP offers a formal education and clinical support program combining “extended orientation, theoretical preparation, supernumerary time, preceptorship, and clinical support” [ 71 ]. Qualitative interviews indicated that the TSSP positively affected nursing recruitment in a studied emergency department. The organization and emergency ward became more attractive for the new nurses by focusing on education and support [ 71 ].

In addition, The Bridging Program of Gilroy et al. [ 54 ] focused on experienced paediatric nurses who wanted to develop and specialize in paediatric critical care. Gilroy et al. [ 54 ] did not execute the statistical analysis. However, they noticed that the external turnover rate of the participants of the program was 9%, which was lower than the overall unit turnover at that moment (12%) [ 54 ]. This outcome supports the positive outcomes of the other transition programs.

Finally, Schroyer et al. [ 75 ] focused on their Academy of Medical-Surgical Nurses (AMSN) Mentoring Program for nurses newly entering a specialty unit within critical care service, another transition during the career and stage of onboarding at another department and team. During the AMSN Mentoring Program, every newly entering nurse is paired with a mentor (experienced nurse) who provides guidance and nurturing. In the not-mentored group, 66% of nurses were retained, whereas 91% of the mentored nurses were retained ( p = 0.001, chi 2 = 6.873, 95% CI). Apart from that, nurses and trainees explained it was sometimes difficult to catch up with their mentors due to different shifts [ 75 ].

3.2.3. Stress Coping

Healthcare workers are dealing with high-stress levels. Seven of the included studies revealed interventions focusing on coping skills to reduce the intention to leave [ 43 , 50 , 58 , 60 , 72 , 74 , 78 ]. Im et al. [ 60 ] set up a Huddling Programme in Korea for new nurses. The Huddling Programme contains four sessions within nine weeks of peer group activities focusing on empowerment. The programme focused on the mechanism of the group dynamic of nurses, which could help them cope with job stress and related problems [ 60 ]. Analyses revealed that turnover rates during the study period were lower for the intervention group (4.2%) than the control group (20.0%); however, they were not statistically tested [ 60 ].

El Khamali et al. [ 50 ] designed a five-day course for nurses. This course is intended to reduce job strain by improving the ability of ICU nurses to cope with stress by complementing medical knowledge and facilitating role-plays. The course led to significantly better numbers of retention than the control group ( p = 0.04). The intervention costs the employer approximately EUR 2000 per nurse [ 50 ].

In the US, Hines et al. [ 58 ] implemented the American Nurses Association’s (ANAs) self-care guidelines in a small sample at the women’s and new-born service department. The ANAs guideline services tools to assist the nurses by selecting the appropriate self-care activities based on the particular stress in their workplace. The guideline resulted in a non-significant stress reduction (z = 0.58, p = 0.564) and a non-significant reduction in intent to leave (z = 1.13, p = 0.257) [ 58 ].

Additionally, Vardaman et al. [ 78 ] supported nurses with two computerized training sessions for Change-related Self-Efficacy (CSE). Self-efficacy is one’s belief in their ability to perform capably during any change [ 78 ]. Results showed that for every unit CSE increases, the turnover intention decrease by 0.46 ( p < 0.01) [ 78 ].

Rushton et al. [ 74 ] set up the Mindful Ethical Practice and Resilience Academy (MEPRA), which enhanced a culture of mindfulness, ethical competence, and resilience. This was cultivated by six experimental workshops of four hours with six different elements, daily technology-enabled mindfulness and reflective practice, and reflective questions. MEPRA resulted in decreasing turnover intention (F = (3, 83), p = 0.05) [ 74 ].

Furthermore, Chu et al. [ 43 ] studied the use of nurses’ strength, which is defined as: “the characteristics of a person that allow them to perform well or at their personal best” [ 86 ]. Using nurses’ strengths was fulfilled by the included nurses using positive psychology and positive organizational behaviour [ 43 ]. They found out that nurses’ strengths use had a significant positive relationship with job crafting. Job crafting is defined as: “Nurses spontaneously changing the boundaries of cognition, tasks, and relationships of their work resulting in improving the job fit.” [ 43 ]. It seemed that strength use was significant positive related to job crafting (β = 0.68, p < 0.001). Job constructing was negatively correlated with turnover intention (β = −0.27, p < 0.01). This suggests that nurses’ strength use would decrease turnover intention, though this relationship was not significant (β = −0.01) [ 43 ].

In terms of self-care, a study conducted in the US studied the effect of four creative arts therapy programs [ 72 ]. The study aimed to allow healthcare workers to gain control over their psychological stress using visual art, musical practice, creative writing, or physical dance or movement. The intervention program showed improvements in turnover intentions ( p = 0.001) [ 72 ].

3.2.4. Social Support

Four of the included studies have examined social support, which may help with managing stress and possibly impact job retention [ 44 , 53 , 55 ]. Forde et al. [ 53 ] gave the nurses a moment to speak up by implementing and testing a ‘listening to staff’ event (L2S). After implementation, the turnover numbers decreased from 18.9% in October 2017 to 10.2% in October 2020.

Concilio et al. [ 44 ] exchanged a six-week digital intervention using text messaging. The text messages of the control group only contained medical facts in the experimental group. The text messages in the interventional group contained emotional, esteem, and networking support. The digital intervention derived an increasing sense of social support in the control group. Though, the intention to leave (BF = 2.459) did not change in the control or the experimental group [ 44 ].

Additionally, Guo et al. [ 55 ] had a valuable result with the WeChat Three Good Things That Happened (3GT). During this six-month intervention, the nurses were asked to record three good things that happened. Afterwards, they had to discuss why these good things happened and their role in making them happen. Using the WeChat 3GT intervention resulted in a significantly decreased turnover intention (F = 11.0323, p = 0.001) [ 55 ]. It should be noted that the WeChat 3GT intervention was tested on burnout nurses exclusively.

Lastly, Jensen et al. [ 61 ] set up a study to research the effect of facility dogs on healthcare workers. For this study, the participants had to work for at least six months with the facility dogs. The presence of facility dog had a significant association with turnover intention Healthcare workers who work with a facility dog reported reduced intentions to quit their jobs than the control group (β = −0.27, p = 0.002, d = −0.50) [ 61 ].

3.2.5. Extra Staffing

With the shortage of healthcare workers, two studies revealed interventions contracting other personnel with a healthcare background (e.g., unlicensed assistive personnel) to support the nurse staffing and prevent them from leaving [ 49 , 81 ]. Winslow et al. [ 81 ] constructed a partnership Care Delivery Model (CDM) in a Magnet hospital in the US. The project was designed using a dyad or triad comprised of two nurses, one nurse and one unlicensed assistive personnel, two nurses, and one unlicensed assistive personnel taking care of a team of patients. The partnership CDM did not result in significant differences in the nurse turnover [ 81 ].

Furthermore, at an Acute Care department in Australia, Duffield et al. [ 49 ] added unregulated nurses support workers (unlicensed) to existing nurse staffing. Wards where nurse support was added, had non-significant higher numbers of nurse intent to leave [ 49 ].

3.2.6. Coping with the Demands of Patient Care

The primary responsibility of healthcare workers is patient care. Two included studies revealed tools which may support novice nurses in coping with the demands of patient care [ 76 , 84 ].

Zhong et al. [ 84 ] tested the humanistic care teaching model. Paediatric nurses practised this patient-care model by writing various clinical cases and practising with organized role-plays. It showed that the turnover intention in the intervention group was significantly lower than in the control group ( p < 0.001) [ 84 ].

Tang et al. [ 76 ] suggested that novice nurses have a hard time prioritizing and managing the health problems of their patients. The Humanoid Diagram Teaching Strategy (HDTS) was implemented to help novice nurses reintegrate their knowledge and skills to make decisions. The training started after the first month of pre-service training and was conducted three times a week for four weeks consecutively. During this training, the patient’s appearance was drawn in three parts: the head and neck, trunk, and limbs. The clinical preceptor encourages the novice nurse to employ association thinking and use guidance and discussion. The goal of the HDTS was to identify the primary patient problems and solutions, which resulted in learning how to manage specific cases. This HDTS resulted in a significant difference in the retention rate of the intervention group (β = −0.33, p < 0.005) [ 76 ].

3.2.7. Work Relationships

Work relationships have an impact on the retention rates of healthcare workers, which was shown in five of the included studies [ 31 , 35 , 56 , 64 , 65 ]. In 2017, Kang et al. [ 65 ] published the effect of the cognitive rehearsal program for nurses on interpersonal relationships with ten topics: nonviolent communication, withholding information, backbiting, sabotage, disgracing, undermining activities, failure to respect privacy, physical aggression, verbal affront, and self-empathy. After the intervention, the intervention and comparison groups showed significant differences in intention (F = 5.55, p = 0.024), which continued up to four weeks after the intervention program [ 65 ].

Secondly, Harris et al. [ 56 ] studied the effect of communication strategies. Specifically, the communication strategy contained clinician training using situation, background, assessment, and recommendation (SBAR) twice daily shift huddles with the BAR method and a monthly clinician meeting over three months. The communication strategies led to a decrement in unit turnover from 7.84% to 2.33% at the end of the three-month project. The increased cost for this project occurred with staff meetings being held once a month. Half of these individuals were paid an extra hour for attending this meeting, and the other half were already present for their shifts [ 56 ].

Then, Baik et al. [ 35 ] set up five four-hour interprofessional team training: a team intervention including team strategies and tools to enhance performance and patient safety (TeamSTEPPS) and communication training. Furthermore, the team followed quarterly leadership workshops. Lastly, a structured bedside rounding was implemented. The six months turnover rate before the interventions was 5.74%. Post-intervention, this turnover rate decreased to 5.3%. The retention rates were not statistically tested [ 35 ].

Kang et al. [ 64 ] developed a smartphone application to cognitively train nurses to cope with bullying situations in the workplace. The application consists of an introduction to nonviolent communication as the standard, six digital comic drawings of workplace bullying situations and nonviolent communication strategies, and a board for questions and answers. The intervention effectively decreased nurses’ person-related bullying and the experiences of work-related bullying. Pre-measurement the mean (SD) was 3.26 (0.81). The smartphone application decreased retention rates at four-week implementation by 3.13 eight-week measurement 3.36 (0.77). Whereas, the mean (SD) score of the control group was 3.59 (0.84), 3.66 (0.84), and 3.67 (0.71), respectively [ 64 ].

Lastly, Al Sabei et al. [ 31 ]) researched the impact of interprofessional teamwork. This practice is characterized by shared team identity, clarity, shared responsibility, integration, and independence, on the intention to leave of nurses. Interprofessional teamwork was directly associated with nurses’ intention to leave and indirectly mediated by job satisfaction and burnout [ 31 ]. The study did not reveal how the interprofessional teamwork intervention was precisely examined in practice [ 31 ].

3.2.8. Development Opportunities and Department Resources

Opportunities in the development of the workforce and resources may help through the retention of nurses and physicians. Three included studies discussed certain interventions [ 46 , 47 , 69 ]. In Australia, Dawson et al. [ 47 ] studied supportive strategies. The strategies contained providing employment options, rewarding performance, enhancing professional development and training, and improving management practice [ 47 ]. However, Dawson et al. [ 47 ] did not describe concrete results of these strategies.

Furthermore, Dawood et al. [ 46 ] set up a qualitative study to discuss the effect of dual roles: working as a nurse and an emergency nurse practitioner (ENP), as an intervention to improve retention. If the dual role was not available, most part-time ENPs did not consider leaving nursing altogether. However, full-time participants without dual roles considered leaving nursing, confirming that dual roles could force retention [ 46 ].

Moreover, Melnyk et al. [ 69 ] focused on the idea that implementing evidence-based practice (EBP) will result in renewing the nurses’ professional spirit and giving them a voice [ 87 , 88 ] which may have a positive impact on job satisfaction [ 87 ]. Melnyk et al. [ 69 ] used the Advancing Research and Clinical Practice through Close Collaboration (ARCC) model to implement EBP. EBP culture and EBP mentorship resulted in being key variables that significantly positively impact the intention to stay among nurses ( p = 0.02) [ 69 ].

Brabson et al. [ 38 ] focused on the three EBP training models for physicians: “Cascading model, learning collaborative, and distance education.” [ 38 ]. Results showed no differences in turnover rates at the 12-month measurement point (χ 2 (2, n = 96) = 2.10, p = 0.35, Cramer’s V = 0.15) or at the end of the study (χ 2 (2, n = 95) = 0.51, p = 0.77, Cramer’s V = 0.07) [ 38 ].

3.2.9. Job Environment

Six studies demonstrated interventions by influencing the job-/work environment to impact the retention rates [ 30 , 32 , 39 , 48 , 70 , 79 ]. Brewer et al. [ 39 ] studied the effect of a Magnet hospital. The Magnet Recognition Program ® acknowledges healthcare institutions that offer exceptional nursing care and working environments through an inventive program. It seemed that working in a Magnet hospital did not significantly impact turnover intentions (coefficient (CI) = 0.039 (−0.150 to 0.227), p = 0.687) [ 39 ].

Mohamadzadeh et al. [ 70 ] compared the outcomes of excellence-awarded hospitals to the outcomes of hospitals that do not have an excellence plan. The European Foundation for Quality Management (EFQM) is an excellent plan which has three levels. At the first level, eight criteria have been considered to evaluate the performing hospitals. These eight criteria were: leadership, policy and strategy, employees (human resources), participations and resources, customers’ results, employees’ results, and societies and performance key results. At the second level, the criteria were described in detail using subsets. At the third level, a list of specific guidelines regarding more explanation of each subset was available. The score means of intention to leave the organization in performing and non-performing organizations of the excellence plan showed a significant difference ( p = 0.004). Performing the organizational excellence plan reduced the intention to leave [ 70 ].

In terms of environment, Alvaro et al. [ 32 ] tested the impact of the architectural design of the hospital on patient and staff outcomes using a pretest-posttest quasi-experimental study. The new design mainly focused on creating an architecture of wellness containing communal dining spaces on each floor, public spaces, multiple outdoor terraces, and a rooftop terrace with views of the skyline, lake, and green environment. Workplace satisfaction of healthcare workers did improve ( p = 0.000). There was no significant difference in intention to quit staff. Though, staff with favourable impressions of the new architectural design and a greater sense of belonging to the neighbourhood showed a decreased intention to quit ( p < 0.01) [ 32 ].

Furthermore, Walker et al. [ 79 ] studied the effect of the integration of an electronic health record on retention rates. Quality of care did improve significantly in terms of infections, pressure ulcers, and falls ( p < 0.01). Though, the analysis of data revealed no significant model effect (F (2, 42) = 2.09, p > 0.05, r 2 = 0.07), nor did the model explain the variance in the nurse turnover [ 79 ].

Adams et al. [ 30 ] explored the impact of the Cultural Change Toolkit on the nursing work environment. The toolkit provides information and tools that encourage positive practice changes. It mainly focuses on meaningful recognition, shared decision-making, and increasing leadership support and involvement. The implementation of the toolkit led to a reduction in the anticipated turnover scale (mean rate pre-implementation = 3.133, post-implementation 2.989), though this reduction was not significant [ 30 ].

Finally, Deng et al. [ 48 ] studied the comprehensive reform in a hospital in China. The government implemented new policies on personnel, compensation, management, and diagnosis and treatment. Details can be found on the website of the Beijing Municipal Health Commission Information Centre [ 89 ]. Four years after implementation, the average annual growth rate was 9.1% for nurses and physicians in Beijing public hospitals. The turnover intention thought of 61.4% had decreased [ 48 ].

3.2.10. Work Organization

Four included records studied the impact of the work organization on retention rates [ 36 , 45 , 68 ].

Daniels et al. [ 45 ] studied the effect of the ‘70% Full-Time Commitment’. A provincial government in Ontario, Canada, developed this strategy where at least 70% of the nurses work full-time, and the other 30% work part-time or casually. It aimed to stimulate working full-time. Results showed that the ‘70% Full-Time Commitment’ seemed to be no effective intervention in retaining part-time and casual nurses [ 45 ].

In a qualitative study in the UK by Baillie et al. [ 36 ] nurses changed from twelve-hour to eight-hour day shifts. It appeared that the eight-hour day shifts negatively affected recruitment and retention, mainly because an increased amount of staff members were needed to cover the eight-hour day shift pattern [ 36 ].

Two selected studies checked the effect of the self-scheduling [ 68 , 82 ]. It was suggested that self-scheduling created a better work-life balance [ 68 ] and ensured more flexibility [ 82 ], possibly resulting in decreased turnover rates. Kullberg et al. [ 68 ] compared fixed scheduling with self-scheduling. Self-scheduling was significantly associated with more requests from management for short notice shift changes, whereas fixed scheduling was associated with less overtime. Self-scheduling showed overall relatively low to moderate levels of staff turnover compared to the fixed scheduling [ 68 ]. No significant calculations were executed.

In the US, a study with a larger group of nurses ( n = 1497) in four hospitals was conducted by Wright et al. [ 82 ] to study the effect of self-scheduling. Two hospitals showed an absolute increase in turnover rates (1.5% and 1.4%), and two other hospitals reported an absolute decrease in turnover rates (−5.3% and −5.4%) [ 82 ]. The isolated effect of self-scheduling on retention rates was not described by Wright et al. [ 82 ] because no other variables were not studied.

3.2.11. Recruitment Approach

Three studies concentrated on the recruitment approach as an intervention to retain nurses and physicians [ 33 , 52 , 66 ]. Two included studies focused specifically on the recruitment of physicians [ 33 , 52 ]. Firstly, Fleming et al. [ 52 ] studied the effect of provisional licensing to attract international medical graduated physicians who are without the licensing unable to work in Canada. The study showed international medical graduates started practice as a result of the provisional licensing but did not result in long-term retention [ 52 ].

Secondly, Arora et al. [ 33 ] set up a special rural recruitment track for physicians in the rural area of Thailand. In Thailand, the Collaborative Project to Increase Production of Rural Doctors (CPIRD) and the One District One Doctor (ODOD) project, were set up to increase the number of doctors in rural areas. Arora et al. [ 33 ] studied the long-term effect of these two recruitment projects. It seemed that doctor retention was higher in areas where the initiatives were implemented than in the regular tracks ( p < 0.05) and medical were 2.4-fold more likely to remain working for the area for a minimum period of three years (OR (95% CI) = 2.44 (2.19–2.72)) [ 33 ].

Finally, the Prospective Staffing Model researched by Kester et al. [ 66 ] focused on the implementation of a model to predict preventable and potential turnover at a thoracic surgery department. Restructure of the recruitment strategy was included in the implementation of the prediction model. It involved engaging current workers in the interview process and prioritizing the candidates regarding desirable characteristics. Furthermore, an internal nurse recruiter organized interviews and had weekly meetings with the nurse manager to improve the partnership. The hospital empowered local academic partners such as colleges and universities to improve the knowledge about the new graduates. Additionally, the length of the orientation of the newly hired nurses was enlarged towards eight weeks for experienced nurses and towards 12 weeks for new graduates. The implementation of the prediction model led to a 17.6% decrease in turnover in a four-year period. The cost of the 12-week orientation was $11,066.40 in 2018, which is still less than the average cost for the replacement of a new employer (about $52,100) [ 66 ].

3.2.12. Technological Innovations

There are technological healthcare interventions innovated to increase retention, two of the included records focused on the use of robots in healthcare [ 41 , 59 ]. Chang et al. [ 41 ] set up robots to help nurses focus on professional task engagement. They found that robot-enabled focus (“nurses’ perception that robots enable nurses to concentrate on conducting major nursing jobs” [ 41 ]) on professional task engagement positively impacted overall job satisfaction (r = 0.31, p < 0.05) and perceived health improvement (r = 0.34, p < 0.05). Robot-reduced nonprofessional task engagement (“nurses’ perception that robots help share the workload of auxiliary jobs” [ 41 ]) was positively related to only perceived health improvement (r = 0.26, p < 0.05). Furthermore, Chang et al. [ 41 ] noticed that job satisfaction and perceived health improvement were negatively related to turnover intention (r = −0.41, p < 0.05 and r = −0.18, p < 0.05) [ 41 ]. These findings suggest that, by using robots, the increased focus of nurses on professional task engagement and reduced focus on nonprofessional task engagement could help to improve job satisfaction and job retention of nurses [ 41 ].

Huang et al. [ 59 ] tested the effect of effort ensuring smooth operation (EERSO), “the time and energy needed to keep robots operating as designed”. EERSO was positively associated with time pressure (β = 0.16, p = 0.007) and missed care (β = 0.13, p = 0.003). Using robots may help reduce nurses’ workload by focusing on nurses’ saved time and, therefore, turnover intention. However, it also requires nurses’ efforts to maintain EERSO, which may adversely impact nursing professional workplaces [ 59 ].

4. Discussion

This systematic review resulted in an overview of the existing interventions for job retention of nurses and physicians in a hospital setting. The included records resulted in twelve themes on which management could focus on in terms of job retention: onboarding, transition program to a different unit, stress coping, social support, extra staffing, coping with the demands of patient care, work relationships, development opportunities and department resources, job environment, work organization, recruitment approach, and technological innovations.

The positive impact of the onboarding program [ 34 , 37 , 42 , 57 , 62 , 63 , 67 , 77 ] and mentorship [ 51 , 73 , 80 , 90 ] is in line with earlier published systematic reviews [ 91 , 92 ]. Kakyo et al. [ 93 ] explored the benefits of the informal mentoring program for nurses and confirmed that built on the reciprocal relationship between mentee and mentor; there is a substantial benefit of the mentoring program.

Furthermore, the onboarding program shows the importance of supporting the new graduates within the first two years of their working life [ 37 , 42 , 63 , 67 ]. More than 50% of newly graduated nurses leave their job within the first year due to culture shock [ 94 ]. To prevent them from leaving early in their working life and negatively impacting the staff long-term, it seems important to focus on and maintain this specific group. Stevanin et al. [ 95 ] described the difference in stress reporting between generations (e.g., baby boomers, generation x, and generation y). It showed that generation y reports more psychological stress than previous generations and requires support in their workplace [ 95 ]. It is suggestible that new generations (generation y and subsequent) have substantial needs to support them in the overwhelming transition toward their new role [ 57 , 62 , 75 , 77 ], than their previous colleagues. It makes the importance of onboarding programs, focusing on new graduates and new generations starting their careers and dealing with stress due to the transformation from students towards registered nurses, even more clear.

In this systematic review, none of the included records studied onboarding programs for physicians. It illustrates this content is missing in research and makes it questionable if physicians could profit from an onboarding program. A systematic review published in 2021 affirmed the relevance of early clinical contact during medical school and the early postgraduate period for the retention of physicians in a rural setting [ 96 ]. Additionally, Kumar et al. [ 96 ] also underscored the impact of professional and personal support on the retention rates for this group. Hence, onboarding programs, that focus on early clinical contact and support, could be beneficial for physicians, same as for nurses.

In addition, this systematic review highlighted the importance of tools for stress coping [ 43 , 50 , 72 , 74 ], though all of them focused specifically on nurses. It seems reasonable that physicians are dealing with stressful situations, likely as nurses. Unfortunately, interventions focusing on physicians coping with these stressful situations are lacking in this review. A review by Darbyshire et al. [ 97 ] confirmed that physicians in an acute care setting have a need for stress management techniques. These techniques could positively impact retention rates [ 97 ]. These findings make it highly likely that, for example, copings tools for stress management or mentorship programs could also be effective for physicians.

Interestingly, the interventions included in this systematic review do not mention salary as a solution for upgrading the retention rates for nurses and physicians. Earlier research showed that the migration of healthcare workers is, among other things, caused by the lower salaries in low- or middle-income countries [ 5 , 6 ]. A literature review by Okafor et al. [ 98 ] explained that the migration of nurses in Nigeria is affected by the worse payment and pushed nurses towards countries with better working conditions and better pay. Due to the withdrawal effects of healthcare workers’ migration to low- or middle-income countries, higher salaries may help reduce the intention to leave and migration [ 5 , 6 , 98 ], though it may not be the most cost-effective intervention [ 99 ]. An earlier systematic review revealed that salary is not the most common reason nurses and physicians leave their jobs in high-income countries; job satisfaction, work-life balance and social support are frequently named determinants that impact the intention to leave [ 25 ]. This suggests that salary impact may vary per low-, middle-, or high-income country. It is suggestible that salary is not a primary reason for leaving healthcare in high-income countries. Nevertheless, it is an important basis from wherefore leaving and thus a vital basis managers can build to rice retention. Managers must implement specific retention interventions that match the determinants that apply to the concerning culture or country.

However, implementing cost-effective retention interventions must likely overcome some barriers before success. For example, structural barriers such as staff workload and lack of time are commonly described as barriers to the implementation of hospital-based interventions [ 100 ] To overcome these barriers, it seems essential to enhance commitment and motivation of the staff by convincing them of the advantages for the staff themselves and sharing success stories [ 100 ].

Although a great effort was made to create a funded systematic review, there were some limitations. Firstly, a meta-analysis is not conducted due to the heterogeneity of the included records. Secondly, the authors may have missed some studies as a result of the exclusion of grey literature. The grey literature was excluded because the extensive search led to a large number of results and a comprehensive results paragraph. Lastly, it is feasible that the chosen themes of interventions overlap, which can create bias. This overlap demonstrates that the interventions affect multiple determinants that could positively impact retention rates. To maintain the retention intervention impacts all possible determinants, it is crucial to implement it on various organizational levels.

This systematic review studied extant literature on both physicians and nurses, which constitutes a key strength of this study. Though, it stands out that limited interventions that were included in this systematic review contained interventions for physicians. Other systematic reviews of this topic focused on early careers or only experienced nurses [ 91 , 92 ]. To the best of our knowledge, there is no systematic review available exploring interventions for improving retention in a hospital setting for both nurses and physicians, which makes this systematic review unique. Nevertheless, a higher number of the included records included nurses instead of physicians. Applying the results of this study to physicians in a hospital setting can create bias due to a lack of research concerning physicians. Accordingly, the outcomes should be handled with care implemented for physicians. Nonetheless, numbers showed that the shortage of physicians leaving healthcare is just as alarming as the nursing rates [ 1 , 2 ]. The literature describes high numbers of physicians dissatisfied with their jobs and burnout symptoms related to higher turnover rates [ 7 ]. A possible explanation could be that researching the intention to leave is taboo in medical culture among physicians. This might result in a minimal to not accessible target for research in retention interventions or implementation of retention strategies. Hence, the authors of this review suggest focusing on enlarging the importance of researching physicians’ intentions to leave.

Moreover, this review has thus far focused on one-factor interventions that impact the intention to leave or stay. However, job retention showed inter-correlation with other determinants (such as job satisfaction, burnout symptoms, job demands and job resources) that could also be impacted using interventions [ 28 ]. This effect is minimally studied. Hence, research on this topic could help to adjust the impact on a broader level.

Lastly, the transition from school to work seemed a vital deal breaker for nurses [ 57 , 62 , 75 , 77 ]. This raised the question about the extent to which nursing school actually prepares students for the skills they need to start work as a nurse. More research is undoubtedly desirable to prevent new graduates from leaving their workforce.

5. Conclusions

The outflow of nurses and physicians leaving hospitals is enormous. The impact of COVID-19 increases the urgency in preventing nurses and physicians from leaving. This systematic review resulted in multiple interventions that can be used to upgrade retention rates. Additionally, the implementation of organizational change and the establishment of mentorship programs are important interventions.

When selecting an intervention for implementation, managers and human resources should focus on the characteristic intervention that matches their healthcare workers and the hospital’s mission, vision, and values statements. Sharing the success stories of implanted interventions may be advantageous for all healthcare organizations.

In summary, this review can contribute to implementing retention interventions in hospitals, which can aid in maximizing retention, especially for nurses. Furthermore, this review can contribute to planning future studies containing more physician-specific interventions.

Acknowledgments

We want to thank the partners and project staff of the METEOR project for their assistance.

Abbreviations

Supplementary Materials

The following supporting information can be downloaded at: https://www.mdpi.com/article/10.3390/healthcare11131887/s1 , S1: PRISMA Checklist and SWiM items; S2: Literature search; S3: Quality assessment MMAT.

Funding Statement

This research was funded by European Union, Chafea—3rd Health Programme, Multi-beneficiary Project Grant (HP-PJ, HP-JA), Topic: PJ-01-2020-1, Type of action: HP-PJ, SEP-210693712: Project called METEOR (MenTal hEalth: fOcus on Retention of healthcare workers). The source of funding did not influence the design of the study, the data collection, data-analysis, the manuscript writing, and the decision to submit the manuscript for publication. The views expressed and any errors or omissions are the sole responsibility of the author.

Author Contributions

Conceptualization, N.D.V., L.G. and P.D.W.; data curation, N.D.V. and J.B.; formal analysis, N.D.V., O.L., A.B., S.S., K.B. and P.D.W.; funding acquisition, L.G. and P.D.W.; investigation, N.D.V., J.B. and P.D.W.; methodology, N.D.V. and P.D.W.; project administration, N.D.V. and P.D.W.; resources, J.B.; supervision, N.D.V. and P.D.W.; validation, N.D.V., O.L., A.B., S.S., K.B. and P.D.W.; visualization, N.D.V. and P.D.W.; writing—original draft preparation, N.D.V.; writing—review and editing, N.D.V., O.L., A.B., S.S., K.B., L.G. and P.D.W. All authors have read and agreed to the published version of the manuscript.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Data availability statement, conflicts of interest.

The authors declare no conflict of interest.

Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.

Strategic human resource management and public employee retention

Review of Economics and Political Science

ISSN : 2631-3561

Article publication date: 11 September 2018

Issue publication date: 1 October 2018

The purpose of this research is to explore the dynamics of using strategic human resource management (SHRM) practices in the public sector. More specifically, this paper tries to point out some main aspects of SHRM, which strongly influence the decision of employees to stay. The empirical study here tends to reveal greater insights into the SHRM-retention relationship and its validation at the National Bank of Egypt (NBE).

Design/methodology/approach

This research is co-relational in nature with cause and effect approach. The design of the study is both descriptive in the theoretical part and quantitative in the applied one. Theoretically, this paper adopted the analytical approach to define the main concepts, aside from an empirical study to investigate correlations in practice.

This paper concludes that the employment of best HRM practices is deemed a remarkable strategic tool in the retention of core public employees. Also, the results of analysis provide evidence that SHRM contributes to employee retention at NBE.

Practical implications

The findings and recommendations of this research can practically guide management to devise effective policies to improve employee retention using appropriate SHRM activities, particularly in the Egyptian public organizations.

Originality/value

This research has valuable implications for both theory and practice, as it offers several contributions to literature in the field of study, as well as the practical contribution.

Strategic human resource management

• Human resource management practices

Employee retention

• Public sector
• National Bank of Egypt

Fahim, M.G.A. (2019), "Strategic human resource management and public employee retention", Review of Economics and Political Science , Vol. 3 No. 2, pp. 20-39. https://doi.org/10.1108/REPS-07-2018-002

Emerald Publishing Limited

Copyright © 2018, Marwa Gaber Ahmed Fahim.

Published in Review of Economics and Political Science . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Introduction

There is no doubt that the way in which the human resource (HR) function was managed in organizations has altered dramatically over the past few decades ( Lawler, 2005 , p. 1). A significant trend today is for HR managers to adopt a strategic approach of their jobs and to recognize critical links between the organizational and HR management strategies. Basically, strategic human resource management (SHRM) highlights the growing change in the HRM function from being prescriptive, reactive and administrative to being descriptive, proactive and executive. Sahoo et al. (2011) noted that the concept of SHRM is related to the appropriate integration of HRM activities with the business strategy of the company ( Allui and Sahni, 2016 , p. 363).

On the other hand, from a managerial point of view, the attraction of qualified employees is more urgent today than ever before. An array of evolutions, such as globalization, increasing knowledge work, accelerating technological advancement and rising competition, makes it vital that institutions acquire distinctive human capital for competitive advantage and organizational success ( Holtom et al. , 2008 , p. 232). Also, the retention of those valuable employees becomes a paramount strategy for HR managers in this environment. There is a wealth of evidence that the retention of talented employees has been of serious concern to managers in face of the ever-increasing high rates and costs of employee turnover ( Samuel and Chipunza, 2009 ). In response, managers worldwide have enforced HR policies to actively lessen employee turnover and promote retention ( Hom et al. , 2008 ).

Indeed, although retention and turnover research has experienced considerable theoretical expansion in the past few years ( Holtom et al. , 2008 , p. 243), an overview of previous studies has indicated a lack of adequate research about the relationship between SHRM practices and employee retention, particularly in the public sector, as much of this discourse in literature is associated with business. Boxall and Purcell (2003) stated that the big question here maybe which HRM practices are more likely to contribute to sustainable competitive advantage, and specifically staff retention ( Mbugua et al. , 2015 , pp. 54-55). At the same time, the reviewed literature has revealed mixed results regarding the effect of SHRM indicators on employee retention in organizations, which makes it hard to reach to a definite conclusion about this impact. Second, the studies have been conducted mostly in the developed countries where the setup may not be the same as in the developing ones ( Mbugua, 2015 , p. 41), and mainly the Arab world, emphasizing the sensitivity toward cultural norms and the restricted participation in decision-making. So, the researcher here believes that this is a meaningful area that needs more study with specific reference to Egypt. Essentially, there is a need to study whether the move toward managerialism that has taken place within public sectors all over the world during the past few decades has brought with it some features/attributes of the relationship between HRM and employee engagement and retention experienced within the private sector. For that reason, this study was undertaken, as it adopted an analytical approach in its theoretical part and used an empirical study in the applied one.

Thereby, the main objective of this research is to add to the limited scientific body of literature related to SHRM in the public sector, especially in developing countries, and its actual role in the retention of skilled workforce. The most important SHRM activities here that have been identified with the help of literature are recruitment and selection, training and career development, performance appraisal, compensation and benefits. Eventually, the empirical study analyzes the SHRM–retention relationship at the National Bank of Egypt (NBE), and then it proposes some administrative and managerial reforms to boost the influence of HRM strategies and programs on employee retention. Hopefully, this paper can provide a stepping stone for further contribution in the domain; it may serve as a basis or an attempt in the direction of conducting comprehensive research to judge the managerial and organizational renovations adopted by the Egyptian public sector in this arena, putting into consideration the sustainable development strategy (Egypt’s Vision 2030) concerning the efficiency of governmental organizations in maximizing the usage of their resources, and in particular human resources.

Problem statement

To what extent does SHRM contribute to the retention of employees in public sector organizations and what is the impact of SHRM practices on employee retention at NBE?

What is the meaning of SHRM? What are its key activities and practices?

How do researchers define the concepts of retention versus turnover? What are the intrinsic and extrinsic motivational factors influencing employee retention?

How does SHRM affect the retention of employees in public sector organizations/state-owned enterprises?

How do SHRM practices applied at NBE affect employee satisfaction and retention there, considering the demographic and professional characteristics of respondents?

Subsequently, the research examines its principal variables, as illustrated in Figure 1 .

Literature review: concepts and relationships

HRM is identified as a strategic and coherent approach to the management of the organization’s most valuable asset; the people working there who contribute to the achievement of its objectives ( Armstrong, 2006 , p. 3). Lately, organizations have become increasingly fascinated by the concept of “strategic management.” Both scholars and practitioners in all business-related disciplines have tried to tie the methods and tools of their fields to the strategy of the firm ( Embuhira, 2011 , p. 25). In this respect, Boxall and Purcell (2003) argued that SHRM is the interface between HRM and strategic management. It involves taking a wide and long-term view of where the business is going and ensuring that strategic direction is maintained. A prominent author described SHRM as “the means of aligning HRM with the strategic content of the business and the HR strategy, so that the latter supports the accomplishment of the former and indeed helps to determine it”. Other researchers defined SHRM as “a cumulative set of functions or behaviors associated with the management of human capital, where the HR professional serves as a strategic business partner with the other executive bodies of the organization”. Thus, SHRM includes “designing and implementing a comprehensive set of proactive HR policies/practices that assure the organization’s human assets contribute to the achievement of its corporate objectives” ( Allui and Sahni, 2016 , p. 363).

Therefore, SHRM is considered a new paradigm in managing the human factor at modern organizations ( Waiganjo et al. , 2012 , p. 67). According to Armstrong (2006) , SHRM is based on three assumptions: first that human capital is a major source of competitive advantage, second that it is people who execute the strategic plan and third that a systematic method must be adopted to define where the organization wants to go and how it should reach there. In general, SHRM aims to attain strategic fit. Hence, SHRM is a process that involves the use of overarching approaches to the development of HR strategies, which are integrated vertically with the business strategy and horizontally with each other. These strategies identify the intentions and plans related to overall organizational considerations such as organizational effectiveness, and to more specific aspects of people management such as learning and development ( Armstrong, 2006 , pp. 29-30).

Recruitment and selection . The overall purpose of recruitment is to obtain at minimum cost the quality of employees required to satisfy the strategic needs of the organization, whereas selection implies judging applicants on a variety of criteria, ranging from the objective and measurable ones (e.g. years of experience) to the subjective and personal ones (e.g. leadership potential).

Training and career development . They are the formal activities undertaken by the company to assist employees acquire the knowledge, skills, abilities and experience needed to perform current or future jobs.

Performance appraisal . It is the process of judging how well employees perform their tasks compared to a set of placed standards.

Compensation and benefits . They are the cumulative monetary and non-monetary rewards paid to employees in return for their efforts.

Given the lack of integration across the various HRM activities, early attempts concentrated on linking each functional area to the organization’s strategy independently from other activities. This resulted in the development of things like “strategic selection,” “strategic development” “strategic appraisal” and “strategic rewards.” Although those endeavors broadened the perspective of HRM by recognizing the need for each individual function to be aligned with the organizational goals, there was still a relative neglect of the interaction between all of these functions ( Embuhira, 2011 , p. 25).

In conclusion, SHRM is an area that continues to evoke a lot of controversy as to what it actually embraces; there is no clear agreement concerning the design of this field, particularly with regard to its definition. Similarly, it is quite difficult to distinguish between HRM and SHRM. Until recently, there has been little in the way of formulating strong theoretical paradigms to aid in understanding both the role of HRM in organizations and the determinants of various HR practices. Without this strong theoretical model, it is way hard to differentiate between HRM and SHRM ( Embuhira, 2011 , pp. 24-25). However, it is confirmed that external and internal environment scanning is a crucial element of SHRM particularly, in which the organization can realize the environmental opportunities and threats in light of its strengths and weaknesses ( Fottler, 2011 , p. 11).

Employee retention – a strategic tool

Scholars have considered employee retention management as a strategic and cohesive process that begins with examining the reasons why employees join an organization ( Brown, 2009 ). Worldwide, retention of skilled employees has been of serious concern to managers in face of high rates of employee attrition ( Samuel and Chipunza, 2009 , p. 410). Attrition is a critical problem highlighted in all organizations these days; it is “the gradual reduction in the number of employees through retirement, resignation, or death.” It can also be known as “Employee Defection” or “Employee Turnover” ( Latha, 2017 , p. 1). As turnover is a symptom of a vital systemic problem like an ineffective retention management, companies ought to comprehend what makes people commit themselves to being loyal and productive ( Embuhira, 2011 , p. 5). Thereby, retention is viewed as a logical inverse of turnover, as it indicates the behavior to continue/stay rather than to quit/leave the organization ( Muir and Li, 2014 , p. 3).

In this context, retention is defined as “a voluntary move by the firm to create an environment which engages employees for the long term” ( Chaminade, 2006 , p. 1). It is the other side of the recruitment coin, as they are both hot issues. However, experts suggest that it is quite easy to recruit people, whereas it is much more difficult to retain them. Retention implies “the desire of organizations to keep and hold on to their competent employees and the measures of this.” It involves three basic elements: economics, supply chain and workforce ( Hemalatha and Savarimuthu, 2013 , p. 45). So, employee retention means “the various policies and practices that let employees stick to an organization for a longer period of time” ( Francis, 2014 , p. 1742).

Actually, when a well-trained employee leaves the firm, he/she creates a vacuum, so that it loses indispensable skills, knowledge and business relationships ( Latha, 2017 , p. 1), in addition to the financial cost that is buried in line items like temporary recruitment, selection and training ( Holtom et al. , 2008 , p. 236). Especially, that good employees have more external employment offers compared to average ones, and hence they are more likely to quit. High rates of voluntary turnover of such employees are often harmful or disruptive to the organization’s performance. The problem is further compounded by the fact that most companies, particularly large entities, seem to reward and satisfy new hires more than their current loyal employees ( Hemalatha and Savarimuthu, 2013 , p. 45). Therefore, the easiest way to retain employees is to increase their satisfaction levels, but this will only be effective if performed correctly. The challenge here lies in tackling different employee needs, as they are varied ( Alnaqbi, 2011 , p. 47).

More specifically, when looking at the earliest models of turnover, the basic tenet was that job dissatisfaction often gives rise to turnover. Over time, researchers have looked at more predictors (e.g. job alternatives and organizational commitment). They have investigated the reasons of those predictors (moving horizontally to the left) and the consequences of turnover (moving horizontally to the right). They also have inserted predictors and criteria (vertical expansion), and have considered different levels (horizontal expansion), such as group and organizational variables (e.g. turnover climate and HRM practices) ( Holtom et al. , 2008 , p. 234). Existing literature highlights the causes of employee turnover, such as hiring practices, managerial style, lack of competitive compensation, lack of recognition and venomous workplace. Others include lack of job security, lack of interesting work, lack of promotion and inadequate training and advancement opportunities. When handled, these are regarded as intrinsic and extrinsic motivational factors, which may influence employee turnover and retention. The problem is that managers have failed in identifying and appropriately using those variables as retention strategies commensurate with the distinctive cultures and systems of their organizations ( Samuel and Chipunza, 2009 , p. 411).

In sum, successful employee retention should not rely on a single strategy. According to Hemalatha and Savarimuthu (2013 , p. 45), retention strategies can generally fall into one of the following four categories: working conditions, salary, job enrichment and education. Whilst Embuhira (2011) asserted that retention tools are of only two classifications: HR factors that include person–organization fit, challenging job opportunities, training and career development, reward and recognition, and organizational factors that involve leadership behavior, teamwork relationship, communication, company’s policies and pleasant work environment ( Mbugua, 2015 , p. 4). On the other hand, Samuel and Chipunza (2009) concluded that challenging work, training and development, freedom of innovative thinking, affiliation and job security are found to have significant influence on employee retention in both public and private sector organizations. Whereas another study by Latha argued that salary, superior–subordinate relationship, co-workers’ relationship, growth opportunities, appreciation, suggestions, facilities and procedures are all substantial motivational variables that affect employee turnover and retention.

Finally, it is apparent that securing quality performs simply adds to increased productivity and morale, and reduces the associated costs of turnover. But why then do employees continue to leave? What is missing from today’s retention strategies? Despite the remarkable literature on SHRM best practices, there is little consensus concerning which HR activities should be included as the ideal HRM system that is universally effective to catalyze retention. Given these different approaches to SHRM, it is evident that a more consolidated field of investigation would be beneficial to the development of knowledge in this area ( Embuhira, 2011 , p. 8). Essentially, the need to address that situation is what has led to the purpose of the present study, and thereby this will be discussed and thoroughly clarified in the next part.

The relationship between strategic human resource management practices and employee retention in public organizations

Traditionally, within the employment relationship, employees exchanged their loyalty and hard work for the promise of job security, like what was existed in the public sector. In the contemporary environment, the trend toward more flexible organizational structures and the decline in job security have altered the psychological contract between the employer and the employee. The new form of psychological contract is expressed in placement practices, which see organizations focusing on part-time employees to gain flexibility at lower costs. Because of these organization-wide changes, the essence of attachment between employers and employees has differed ( Embuhira, 2011 , p. 1). Samuel and Chipunza (2009) highlighted that not only the private sector but also governments are facing problems in retaining their skilled employees ( Haider et al. , 2015 , p. 64).

In fact, the main issue in HRM research is whether there is a cumulative set of policies that represent a unique approach to managing people, and which are associated with staff retention. There are many studies on employee retention in several industries and its causal relation with HRM practices. Researchers have established that SHRM results in human capital with greater commitment and lower turnover, so that HRM practices can generally predict the voluntary turnover rates of employees ( Allui and Sahni, 2016 , pp. 362-365). According to Abeysekera (2007) , employee turnover is a crucial challenge for organizations, but companies performing efficient HR activities can minimize its percentage and increase competitiveness ( Mbugua, 2015 , p. 26). Also, Branham (2005) argued that all the reasons of why employees quit are closely related to HR practices, and therefore an inclusive understanding of the relationship between HRM and employee retention will assist firms take correct decisions in achieving business results while guaranteeing an optimum level of resources ( Francis, 2014 , p. 1742). This recognition and extraordinary efforts some institutions make to attract and retain top talents represent fundamental shifts/transformation in the employer–employee relationships. Essentially, more organizations are now realizing that retention is a strategic theme that provides sustainable competitive advantage. By adopting a total retention strategy with the support of relevant HRM programs, businesses may successfully keep skilled employees ( Embuhira, 2011 , p. 2).

In this regard, there are numerous SHRM practices that can be used by the organization to maximize the retention level. Luthans and Sommer (2005) noted that SHRM practices for competitive advantage, and thereby staff retention are; job design activities, job analysis methods, participation programs, information sharing, grievance, staffing, training, performance appraisal, and incentive-based compensation ( Mbugua, 2015 , pp. 3-4). Porter (2008) highlighted that a set of intense HR activities, such as recruitment, training, job design, participation, teamwork, work-life balance and rewards, is thought as important aspect in the attainment of job fit, and this in the long term implies that people may experience better fit also with the organization ( Mbugua et al. , 2015 , p. 54). In addition, Francis (2014) investigated the impact of four dimensions of HRM on employees’ intention to stay, which are training and development, career advancement, compensation and benefits and performance appraisal. Whereas Mbugua (2015) explained the effect of three SHRM practices on retention: strategic recruitment, strategic training and strategic performance management. Thus, organizations should develop SHRM policies and strategies that maintain acceptable relationship between the organization and its employees.

In a nutshell, the review of existing literature detects that HRM practices are positively linked to employee retention. Yet, it is worth to note that there are few experts who argued that perhaps there is no evident relationship between SHRM practices (or some of them) and retention. Hence, this view contradicts the historic debate in literature concerning the importance and the influence of aligning HRM activities with company strategy ( Embuhira, 2011 , p. 40). For example ( Haider et al. , 2015 ; Francis, 2014 ), researches provided empirical implications on the relationship between HRM practices and employee retention, though they failed to substantiate the empirical link between some HR aspects and the intention to stay among employees.

Since past research has shown that SHRM practices are not standardized, as stated by Guest (2001) , and as such researchers have focused on bundles of practices depending on the theoretical perspective. So, and as mentioned before, the group of SHRM practices and activities adopted in this study which may promote retention includes recruitment and selection, training and career development, performance appraisal and compensation and benefits. Furthermore, the current research uses Hertzberg’s “ two-factor theory” as a theoretical background while clarifying the impact of SHRM on employee retention dimensions. This theory implies that a satisfied employee is motivated from within to work hard and to remain in the organization. It looks at two classes of factors associated with employee motivation: satisfiers which stimulate satisfaction and dissatisfiers which prevent dissatisfaction ( Samuel and Chipunza , 2009 , p. 412) . Armstrong (2006) gave the satisfiers/motivators as the work itself, achievement, recognition, responsibility, advancement and growth. Conversely, the dissatisfiers/hygiene factors are like company policy and administration, supervision, interpersonal relations, work conditions, salary, status and security ( Mbugua , 2015 , p. 14; Moldavanova , 2016 , p. 7). These intrinsic variables (job related) and extrinsic variables (non-job related) have major contributions to employee retention in organizations ( Mbugua et al., 2015 , p. 55). Moreover, this study believes that the decision of employees to stay is also affected by a number of demographic and professional characteristics, such as age, family situation, job title and work duration ( Yusoff et al. , 2013 ; Sinnott et al. , 2002 ).

Otherwise, in many countries, public organizations tend to be the biggest employer. Public sector employment is characterized as being labor-intensive. To a very large extent, the quality of the welfare state and the well-being of the nation depend on the performance of public employees. However, public sector organizations in different countries experience cut-backs in resources and increasing demands to demonstrate accountability and foster service quality. Indeed, public organizations are now under growing pressure for greater efficiency. The adoption of New Public Management (NPM) has resulted in a dramatic change in HRM within public sector organizations. The transforming structures and operations of governments, paralleled with the adoption of NPM, have replaced the classical Weberian model of centralized and bureaucratic practices with private sector HRM systems ( Colley et al. , 2012 ), which means that “HRM” has displaced this traditional model of “personnel administration” within public organizations, shifting the culture from “rule-bound” to “performance-based” ( El-Ghalayini, 2017 , pp. 66-67). Nevertheless, the previous period of public reforms has demonstrated that public sector performance cannot be improved by simply imitating the private sector ( Pollitt and Bouckaert, 2004 ). For instance, because of its accountability to public purposes, HRM in public organizations is faced with several contradictions that must be resolved in providing democratic opportunity while obtaining competence, which is completely different from the case of private institutions.

Actually, the introduction of NPM has resulted in a strategic approach to HRM within the public sector. The fundamental idea of SHRM is that managing appropriate HR is strategic to the ability and success of the organization in achieving its mission. This abstract idea has been elaborated by a considerable number of studies in private organizations, which is gradually used in public organization studies as well ( Groeneveld and Leisink, 2017 ). Though, most discussions that tied SHRM to strategic planning failed to define what the term “strategy” means in a public context. Because public agencies are embedded in authority networks rather than economic markets, what is meant by selecting a business strategy is much less clear. Strategies here are produced in response to a variety of competing signs that emanate not from markets but from complex economic, political, legal and organizational structures, processes and relationships ( Manning, 2010 , p. 157). Moreover, strategic planning is more difficult in the public sector because of the short-term considerations of politicians.

In this respect, empirical evidence shows that not all HRM practices are suitable for application in the public sector, given the nature of provided services, attributes of public employees, and the fact that public organizations are accountable for the ways in which they spend public funds. Here, empirical research suggests that many public sector organizations have adopted bundles of skill and opportunity-enhancing HRM activities, but far fewer motivation-enhancing ones ( Kalleberg et al. , 2006 ); HR practices that are compatible with the humanistic goals of state-owned enterprises, aimed at strengthening employees’ skills and opportunities to participate in decision-making, are more common, whereas financial incentives are used to a lesser extent in public sectors if compared to private sectors.

Therefore, it is possible that management broadly among public and private institutions is not similar, and that studies of business enterprises may have different results. So far, the highly committed HRM practices have been tested in private sector organizations, whereas little attention has been given to evaluate their effects on performance and engagement in public sector organizations ( Alnaqbi, 2011 , p. 32). Yet, initial findings based on public sector research propose that SHRM has positive impact on employee motivation and performance ( Messersmith et al. , 2011 ). For that reason, the present research intends to continually examine whether the positive effects of SHRM activities reported in the private sector are replicated in public organizations in Egypt, and in particular at NBE.

On the other hand, public sector cannot completely rely on the same boosts of motivation like private sector companies do. Review of literature reveals that work motivation among public sector employees is different from that of their private sector counterparts ( Wright, 2001 ), although variations in hierarchical level and job nature are more important determinants of work motivation than sectoral divergences. For example, Rashid and Rashid (2012 , p. 24) indicated that public sector employees are more motivated by work content and they experience greater balance between work and family life, whereas private sector employees are more motivated by financial rewards, career development opportunities and supportive environment. These findings strongly confirm previous research ensuring that public sector workers are less extrinsically motivated ( Buelens and Broeck, 2007 , p. 65). Research generally supports the view that public officials usually value the ethic of serving community more than financial compensation ( Houston, 2000 ). Despite that, policies in public organizations still should incorporate many aspects of the private sector practices which spur retention and enhance productivity. Such practices include the introduction of a performance-based promotion system rather than promotion by seniority, because this can lead young and hard-working employees to leave for the private sector. Opportunity for public sector employees to earn performance bonuses should also be considered. This will reinforce productivity and increase retention rates in general ( Samuel and Chipunza, 2009 , p. 414).

In conclusion, public organizations need to develop a coherent set of employment policies to attract and retain qualified staff. However, the particularity of the public sector with a focus on public interest outcomes (ill-defined objectives), and the more open accountability (with politicians and taxpayers), all of that may add a level of complexity that does not easily fit with HRM as a strategic partner in achieving competitiveness and success.

Application: empirical study

Research methodology, research design..

This research is co-relational in nature with cause and effect approach. The design of the study is both descriptive in the theoretical part and quantitative in the applied one. Theoretically, the research adopted the analytical approach to define the main concepts and an empirical study to investigate the correlations in practice. Therefore, in addition to providing a brief overview of relevant literature, a field/sample survey was conducted to determine the extent to which SHRM practices are implemented at the NBE, and then to identify the attitudes of employees and the level of satisfaction that may indicate the current retention status there, and how it is influenced by SHRM. This entity was chosen to be the case study here because it is considered one of the crucial public service organizations and almost the most important governmental financial institution in Egypt generally. In addition, this bank has launched many sounding reforms – that need to be assessed – during the past several years with the sake of retaining employees and satisfying customers as well ( NBE official website, 2017 ).

Population, sample and selection of the sample.

The field survey was conducted during December 2017. As NBE has an extensive network of nearly 400 units nationwide with a huge workforce (unavailable data), and because of time and other resource constraints, the researcher chose a random sample of 12 various branches located in Cairo. The whole population comprised around (300) people who work for the bank in those 12 branches (administrative staff only). A convenient and manageable sample size of (150) people was examined ([57] managers and [93] employees). This sample also was randomly selected. Knowing that 200 people (66.7 per cent of the population) were sampled and 150 people only responded, the response rate was 75 per cent.

Data collection.

For the purpose of collecting the required primary data, an adopted Arabic language structured questionnaire was applied, as Arabic is the official language in Egypt (it was initially formulated in English and then translated). This questionnaire was developed on the basis of literature review ( El-Ghalayini, 2017 ; Allui and Sahni, 2016 ; Mbugua, 2015 ; Francis, 2014 ; Alnaqbi, 2011 ). It encompasses 25 items representing the various aspects of the subject. Thus, the questionnaire was designed and organized into the following sections: demographic profile and professional characteristics of respondents (moderating variable) (five questions not included in the 25 main items), then SHRM practices (independent variable) that consist of recruitment and selection (three items), training and career development (three items), performance appraisal (three items), compensation and benefits (three items) and the strategic alignment with all (one item), whereas retention factors (dependent variable) contain the assessment of the satisfiers/intrinsic factors (four items), dissatisfiers/extrinsic factors (four items) and the general satisfaction with both (four items) (see Appendix 2 ).

It is worth mentioning here that the study used the questionnaire to gather data using a five-point Likert scale as the measurement tool, ranging from 1 = strongly disagree to 5 = strongly agree. Moreover, Cronbach’s alpha test was used to assess the stability of the questionnaire and reliability of the measures, and it was found that all coefficients are above 0.50, so there is evidence that the research variables seem to be consistent, stable, reliable and valid.

Methods of statistical analysis.

Statistical Package for Social Survey (SPSS-V.18) and Analysis of MOment Structures (AMOS) were the tools for compiling and processing data in this research. Several statistical tools were also used for data analysis, which are descriptive analysis, Pearson correlation coefficient, simple linear regression and structural equation modeling.

Demographic and professional characteristics of respondents

Empirical results indicate that the sample consists of 84.7 per cent men and 15.3 per cent women, and 67.3 per cent of respondents their ages are 35 or above and 32.7 per cent are less than 35 years. According to the educational level, 77.3 per cent have a BSc degree or less and 22.7 per cent are post-graduates. The majority of 62 per cent of the sample are employees, whereas the minority of 38 per cent are managers, and finally 66.7 per cent of respondents have spent less than 10 years working for NBE in its different branches, whereas 33.3 per cent have spent 10 or more, which may give some indication about the relatively noticeable turnover rates putting into consideration the sample’s age categories.

Building indicators of the research variables

It is important to mention that nine indicators were already created: recruitment and selection, training and career development, performance appraisal, compensation and benefits, SHRM practices, satisfiers (intrinsic factors), dissatisfiers (extrinsic factors), general satisfaction and employee retention. The indicators were composed by using equal weights method, via adding the scores of the questions which are related to each indicator and then dividing the sum by the number of these questions. Note that each of the four sub-indicators of SHRM was calculated according to its relevant questions, in addition to the question related to strategic alignment. The descriptive statistics here show that the values of the mean for all indicators are around 4 and 5 (in Likert scale); that is, dissatisfiers = 3.665 (the least) and performance appraisal = 4.538 (the highest), which clarify that respondents tended to agree and strongly agree to the existence of those indicators at NBE in general.

Using Pearson correlation coefficient, Table AI indicates the relation between the whole indicator of SHRM practices and its sub-variables (see Appendix 1 ), whereas Table AII illustrates the correlation between the employee retention sub-variables and the whole indicator, as well as the correlation between its two main sub-variables (satisfiers and dissatisfiers) and general satisfaction (see Appendix 1 ).

As shown in Table AI , there is a significant ( p -value is less than 0.05) positive and strong (R is almost around 0.6 or above) relationship at significance level α = 0.05 (with confidence level 95 per cent) between the SHRM whole indicator and each sub-variable. Knowing that the highly correlated indicator is performance appraisal and the least is recruitment and selection, which reflects their influence on SHRM practices at NBE, this contradicts the empirical research ensuring that skill-enhancing HRM activities (e.g. recruitment and selection) are more prevalent in the public sector, whereas motivation-enhancing activities (e.g. performance appraisal) are used to a lesser extent.

From Table AII , it is emphatic that there is a significant positive and very strong (R is nearly around 0.8 or above) relationship with confidence level 95 per cent between the employee retention whole indicator and each sub-variable at NBE. Knowing that the highly correlated indicator is dissatisfiers and the least is satisfiers. In addition, it is clear that the general satisfaction indicator is positively correlated with both satisfiers and dissatisfiers. However, the extrinsic factors (dissatisfiers) again are highly correlated with general satisfaction than the intrinsic ones (satisfiers) at the bank, which contradicts with previous literature recognizing that public sector employees are usually less extrinsically motivated.

Testing the research hypotheses

To accomplish the objectives of the empirical study, the research set out the following two hypotheses.

There is no significant impact at significance level α = 0.05 of SHRM practices on employee retention at National Bank of Egypt.

There is no significant impact at significance level α = 0.05 of recruitment and selection on employee retention at National Bank of Egypt.

There is no significant impact at significance level α = 0.05 of training and career development on employee retention at National Bank of Egypt.

There is no significant impact at significance level α = 0.05 of performance appraisal on employee retention at National Bank of Egypt.

There is no significant impact at significance level α = 0.05 of compensation and benefits on employee retention at National Bank of Egypt.

To show whether the previous hypotheses are acceptable, simple linear regression was used to test the impact of SHRM practices, along with the influence of each one of these activities separately on employee retention, as presented in Table AIII (see Appendix 1 ). The hypothesis will be rejected if the significance of the model is less than 0.05, and vice versa.

For the first model, when recruitment and selection indicator is the independent variable: It is obvious that recruitment and selection has a significant positive effect on employee retention at confidence level 95 per cent, and this appears from the value of beta. From adjusted R-squared, it is noticed that recruitment and selection has the ability to explain about 5.7 per cent only from the variation in employee retention at NBE.

For the second model, when training and career development is the independent variable: It is clear that training and career development has a significant positive effect on employee retention at confidence level 95 per cent. From adjusted R-squared, it is noticed that training and career development has the ability to explain about 15.2 per cent from the variation in employee retention at NBE.

For the third model, when performance appraisal is the independent variable: It is obvious that performance appraisal has a significant positive effect on employee retention at confidence level 95 per cent. From adjusted R-squared, it is noticed that performance appraisal has the ability to explain about 15.8 per cent from the variation in employee retention at NBE.

For the fourth model, when compensation and benefits is the independent variable: It is clear that compensation and benefits has a significant positive effect on employee retention at confidence level 95 per cent. From adjusted R-squared, it is noticed that compensation and benefits has the ability to explain about 17.6 per cent from the variation in employee retention at NBE.

For the fifth model, when the independent variable is the overall SHRM practices: It is evident that SHRM practices have a significant positive effect on employee retention at confidence level 95 per cent. From adjusted R-squared, it is noticed that SHRM practices have the ability to explain about 31.8 per cent from the variation in employee retention at NBE.

From the previous results, the study can conclude that there are significant impacts at significance level α = 0.05 of the various SHRM practices (recruitment and selection, training and career development, performance appraisal and compensation and benefits), collectively and individually, on employee retention at NBE, which means that the first hypothesis as a whole and its different sub-hypotheses as well are all rejected.

There is no significant impact at significance level α = 0.05 of SHRM practices on employee retention at National Bank of Egypt, putting into consideration the different demographic and professional characteristics of respondents.

To prove whether the previous hypothesis is acceptable, a structural equations model, illustrated in Table AIV , was used to test whether the moderating variable has significant impact on the relationship between SHRM practices and employee retention or not (see Appendix 1 ). Note that any of these moderating variables will have significant influence on this relation if there is a significant effect of SHRM practices on this variable, as well as a significant effect of this variable on employee retention.

Direct effect of SHRM practices on employee retention at NBE=0.573 at confidence level 95 per cent, which refers to a positive impact.

When entering the demographic and professional characteristics as moderating variables, it is noticed that age, employment status and work duration have significant effects on the relationship between SHRM practices and employee retention at NBE at confidence level 95 per cent, as their p -values are less than 0.05 in both ways, whereas gender and educational level do not have the same effect.

Indirect effect of SHRM practices on employee retention through age = 0.331 * −0.141 = −0.047, which means that when taking into consideration age of respondents, the effect of SHRM practices on employee retention at NBE will be negative; that is those who are above 35 years of age stated that this relationship is generally reverse.

Indirect effect of SHRM practices on employee retention through employment status = −0.775 * −0.189 = 0.146, which means that when taking into consideration employment status, the effect of SHRM practices on employee retention at NBE will be less (lower than 0.573); that is employees argued that this relationship is weaker if compared to managers.

Indirect effect of SHRM practices on employee retention through work duration = 0.781 * 0.385 = 0.301, which means that when taking into consideration work duration, the effect of SHRM practices on employee retention at NBE will be less (than 0.573); that is those who spent 10 years or more working for NBE stated that this relationship is weaker.

From the previous results, the research may conclude that there is a significant impact at significance level α = 0.05 of SHRM practices on employee retention at NBE, putting into consideration the age, employment status and work duration, so H02 is also rejected.

Conclusion: concluding remarks

This study has gone a substantial way towards meeting its prime goal, which is examining the relationship between SHRM and employee retention in public organizations, especially in developing countries. The paper has concluded that the employment of best SHRM practices contributes to the retention of core public employees, as it was relatively found at the NBE, despite the need for further improvement efforts. The research has implications for both theory and practice; first it offers several contributions to literature by means of formulating a conceptual framework which identifies SHRM activities that may help in bolstering employee retention and eliminating turnover, and second, the paper provides a practical guide to executives and policy makers, particularly in the Egyptian public sector, to enable them recognize and initiate employment measures that will make the workplace experience a more pleasant one for workers, and hence weakening the employees’ intents to leave. However, the field study here has some limitations. All findings are based on information taken from respondents. This is in addition to time limitations; that is findings reflect the labor market within a period of great challenges and transformations in Egypt.

Through both the theoretical and applied parts of this research, it has reached the following results and recommendations.

Results and findings

The research claims that SHRM has three basic tenets: employees are viewed as major stakeholders, a focus on organizational mission and key objectives and an effective response to environmental pressures.

The study establishes that by implementing SHRM practices organizations are able to retain their core talents and remain competitive; that is retention is regarded as one of the most important aspects in the success of any company. Nowadays, firms often find that they spend considerable time, effort and money to orient and train new staff, so that retaining current staff will save all of these costs.

The research indicates that public sector HR professionals usually confront a variety of barriers to attract and keep qualified workforce, including increased competition with the private sector and inadequate funding. Also, they are faced with the lack of management support and the old information technology systems.

Practical implications clarify that NBE suffers generally from some kind of problem concerning satisfaction levels and turnover rates, despite the good presence of most of the indicators of SHRM practices and employee retention overall, which means that there is still an urgent need to support and strengthen these concepts in the work context of the bank, specifically the set of skill-enhancing HRM activities like recruitment and selection, which are almost associated with turnover and were less correlated with SHRM at NBE. Those HR practices are compatible with the humanistic goals of public organizations and aim at strengthening public employees’ skills and opportunities to participate in decision-making.

The results of this analysis provide evidence that SHRM has contributed to the retention of employees at NBE (by 31.8 per cent), as demonstrated by the positive linkage between the independent and dependent variables; that is it was proven that the extent of adopting various SHRM practices is positively related to employee retention, although the impact rates are way low. This indicates the poor compatibility between SHRM strategies and employee retention policies at the bank, along with the existence of other influence factors. In addition, it was emphatic that the relationship between SHRM and employee retention is moderated by some demographic and professional traits, but this influence is contradictory, as noticed through the negative and lower effects in this regard.

Recommendations and future research

Management in public sectors should use SHRM policies and activities by embracing strategic recruitment, strategic training, strategic performance management and strategic compensation practices with the sake of promoting employee retention and ensuring that employees will remain in their organizations.

To retain key employees in public organizations, the latter must draw attention to establish a mutual understanding of the employer (government) and employee (civil servant) expectations, and then to set out workplace motivational policies and conditions for employees to satisfy their needs and to appreciate their efforts (intrinsic and extrinsic rewards). This means employee retention strategies set by HRM in the public sector need to be aimed at assuring some leading points, such as establishing clear-cut expectations and policies, providing employees with meaningful work putting into consideration not to overburden them, helping employees feel respected and valued and making sure they are treated fairly, investing in employees’ career growth and professional development, offering them a benefits package that truly serves their needs and eventually creating a culture of transparent and open communication.

The empirical results suggest that there should be more genuine efforts to strengthen, integrate and achieve consistency between SHRM strategies on one hand, and between these practices and the motivational policies of NBE on the other hand, which for sure would reflect positively on the decision of employees to stay. In this respect, and to enhance particularly the impact of the intrinsic factors of motivation that were less correlated with general satisfaction of the bank staff, the researcher emphasizes the importance of encouraging autonomy and empowerment in different areas of work because this will offer challenging job opportunities, which may spur employees and bring them closer to the bank.

Concerning future research, it should replicate the framework of this study with larger samples, and in other settings as manufacturing industries and within both public and private institutions. In addition, further studies must also consider broader aspects and other moderating variables, such as organizational culture, organizational climate, labor market and the regulatory and legal environment. Also, further work examining international comparisons is clearly requested. One could argue that many of the relationships linking turnover to its antecedents and consequences might be moderated by the national and cultural contexts. Also, an obvious complement to this study is to conduct longitudinal research to observe over time if the turnover intentions recorded at one point are associated with negative outcomes at a later point.

Research conceptual model

Pearson coefficient of SHRM practices sub-variables

Pearson coefficient of employee retention sub-variables

Table AIII.

Simple linear regression models of the dependent variable on the different independent variables

Results of structural equations model

Appendix 1. Research tables

The bank uses professional recruitment agencies, associations, universities and the internet to search for new talents.

The bank sets fixed and explicit requirements and specifications for different positions.

The bank conducts impartial tests and personal interviews to assess the potential of candidates and their qualifications to choose the best, with preference to internal hiring.

The bank offers systematic training to develop the attitudes, skills and performance of employees and to enhance the quality and standards of the services provided.

The bank allocates sufficient budget to properly analyze the training needs and to evaluate its results.

The bank encourages staff career development through job enrichment and periodical job rotation, in addition to the commitment to promote capable employees into higher positions.

The bank practices regular assessments to ensure effective performance.

The bank sets accurate and realistic measures to evaluate the employees’ job performance.

The bank uses the performance appraisal reviews to take timely and corrective actions.

The bank offers attractive/competitive compensation packages and relatively high incentives to the staff for motivation.

The reward system of the bank is fair and basically based on performance.

The responsibilities and performance expectations of the management are clear to all employees at the bank.

In general, HRM activities are aligned with the business strategy of the bank to respond to environmental pressures (translating business strategies into a set of expectations about what HRM system must perform, so that the bank’s strategic vision, mission and goals could be achieved through people).

You like your work at the bank and enjoy the sense of challenging and achievement you get from doing your job.

You feel valued and your job efforts are appreciated at work.

You are allowed to enlarge your job responsibilities and to perform independently in your work.

You are given the opportunity to be involved in activities that promote your professional advancement and growth.

The bank has fair and flexible policies and procedures that ensure employment security and customer satisfaction as well.

The bank has supportive and participative leadership, besides an effective two-way communication system.

The staff gains satisfactory rewards (financial and non-financial) by working at the bank.

The bank has healthy working environment and the employees have good relations with each other.

Generally, your work at the bank gives you satisfaction and you are proud of being part of it.

If it were up to you, you will definitely continue working for the bank for the next years.

The rate of employee turnover at the bank is minimal.

The bank has retained experienced staff as a result of good motivational policy.

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Managing for Employee Retention

Managing for employee retention involves strategic actions to keep employees motivated and focused so they elect to remain employed and fully productive for the benefit of the organization. A comprehensive employee retention program can play a vital role in both attracting and retaining key employees, as well as in reducing turnover and its related costs. All of these contribute to an organization's productivity and overall business performance. It is more efficient to retain a quality employee than to recruit, train and orient a replacement employee of the same quality.  

Overview Business Case Drivers of Employee Retention and Turnover Key Retention Strategies and Best Practices Implementation

Fairness and transparency are fundamental yet powerful concepts that can make a lasting impression on employees. According to SHRM research, employees identified these five factors as the leading contributors to job satisfaction:

• Respectful treatment of all employees at all levels.
• Compensation/pay.
• Trust between employees and senior management.
• Job security.
• Opportunities to use their skills and abilities at work.

Employee job satisfaction and engagement factors are key ingredients of employee retention programs. The importance of addressing these factors is obvious, but actually doing so takes time and these tasks are often left for another day. However, the payoff of focusing on employee retention—in terms of increased performance, productivity, employee morale and quality of work, plus a reduction in both turnover and employee-related problems—is well worth the time and financial investment. The bottom line is that by managing for employee retention, organizations will retain talented and motivated employees who truly want to be a part of the company and who are focused on contributing to the organization's overall success. 

Business Case

A critical issue that organizations face is how to retain the employees they want to keep. Companies must anticipate impending shortages of overall talent as well as a shortfall of employees with the specialized competencies needed to stay ahead of the competition. Employers that systematically manage employee retention—both in good times and in bad—will stand a greater chance of weathering such shortages.

A study by Executive Networks found that three quarters of chief human resource officers now say talent retention and attraction are their top priorities. 1

Key reasons a focus on reducing turnover makes sense:

• Turnover is costly.
• Unwanted turnover affects the performance of an organization.
• As the availability of skilled employees continues to decrease, it may become increasingly difficult to retain sought after employees.

Turnover costs can have a significant negative impact on a company's performance; however, not all turnover is harmful. For example, a new replacement hire may turn out to be more productive or more skilled than his or her predecessor.

Drivers of Employee Retention and Turnover

Devising effective employee retention strategies requires organizations to understand both why employees leave organizations and why they stay.

Why employees leave

Employees leave organizations for all sorts of reasons —Some find a different job, some go back to school, some follow a spouse who has been transferred to a different location, some retire, some get angry about a work-related or personal issue and quit on impulse, and some  simply decide they no longer need a job (these categories of departure are referred to as "voluntary turnover"). Still others get fired or laid off by the organization (referred to as "involuntary turnover"). See The Real Reason People Quit Their Jobs and 13 Signs That Someone Is About to Quit, According to Research .

Generally, an individual will stay with an organization if the pay, working conditions, developmental opportunities, etc., are equal to or greater than the contributions (e.g., time and effort) required of the employee. These judgments are affected by both the individual's desire to leave the organization and the ease with which he or she could depart.

Studies have shown that employees typically follow four primary paths to turnover, each of which has different implications for an organization:

• Employee dissatisfaction. Attack this issue with traditional retention strategies such as monitoring workplace attitudes and addressing the drivers of turnover.
• Better alternatives . Retain employees by ensuring that the organization is competitive in terms of rewards, developmental opportunities and the quality of the work environment. Be prepared to deal with external offers for valued employees.
• A planned change . Some employees may have a predetermined plan to quit (e.g., if their spouse becomes pregnant, if they get a job advancement opportunity, if they are accepted into a degree program). However, increasing rewards tied to tenure or in response to employee needs may alter the plans of some employees. For example, if a company is seeing exits based on family-related plans, more generous parental leave and family-friendly policies may help reduce the impact.
• A negative experience. Employees sometimes leave on impulse, without any plan for the future. Generally, this is the result of a negative response to a specific action (e.g., being passed over for a promotion or experiencing difficulties with a supervisor). Analyze the types and frequencies of work-related issues that are driving employees to leave. Provide training to minimize prevalent negative interactions (e.g., harassment, bullying, or unfair and inconsistent treatment) and provide support mechanisms to deal with those problems (e.g., conflict resolution procedures , alternative work schedules or employee assistance programs).

Additional predictors of turnover that merit careful attention include:

• Organizational commitment and job satisfaction.
• Quality of the employee-supervisor relationship.
• Role clarity.
• Job design.
• Workgroup cohesion.

See : Are Your Workers Bored? Uninspired? They May Be Suffering a Midcareer Crisis

Just Because Your Workers Feel Loyal Doesn't Mean They'll Stay

5 Ways to Stop a Valued Employee from Quitting

Viewpoint: 8 Things Managers Do That Make Employees Quit

Why employees stay

As important as it is to understand the reasons that drive employees to leave an organization, it is just as important to understand why valuable employees stay. Studies have suggested that employees become embedded in their jobs and their communities and as they participate in their professional and community life, they develop a web of connections and relationships, both on and off the job. Leaving a job would require severing or rearranging these social and value networks. Thus, the more embedded employees are in an organization, the more likely they are to stay. Companies can increase employee engagement by providing mentors, designing team-based projects, fostering team cohesiveness, encouraging employee referrals, and providing clear socialization and communication about the company's values and culture, as well as offering financial incentives based on tenure or unique incentives that may not be common elsewhere.

Employers must be responsive to the wants of employees. Prior to the COVID-19 pandemic, research found that nearly a third of workers sought out a new job because their current workplace didn't offer flexible work opportunities. After 2020, many workplaces have remote work and flexible scheduling options that have been put to the test. Employers can use this new flexibility to their advantage. See  Flexible Work Critical to Retention, Survey Finds .

Employees who regularly receive meaningful recognition for their good work are less likely to seek greener pastures and stay longer with organizations. A joint study by Gallup and recognition platform provider Workhuman found that when recognition practices hit the mark with employees, 55 percent are less likely to look for external job opportunities and 68 percent are less likely to feel burned out on the job.  See Empowering Workplace Culture Through Recognition .

Employees who have the opportunity to move around within a company, whether to new jobs in different departments or by promotions, are more likely to stay with that company. See  Study: Internal Mobility Boosts Retention .

Employee benefits also play a role in retention. Offering a competitive benefits package, in addition to competitive pay, reduces the likelihood an employee will find the grass greener elsewhere. See  Employees Are More Likely to Stay If They Like Their Health Plan .

Key Retention Strategies and Best Practices

Practices that contribute to retention arise in all areas of HR, and all roles within an organization will need to work together to develop and implement multifaceted retention strategies. Broad-based and targeted strategies, or a combination of both, may be appropriate depending on the circumstances.  See How to Retain Employees During the Great Resignation .

Effective practices

Effective practices in a number of areas can be especially powerful in enabling an organization to achieve its retention goals. These areas include:

• Recruitment. Recruitment practices can strongly influence turnover, and considerable research shows that presenting applicants with a realistic job preview during the recruitment process has a positive effect on retention of those new hires . 
• Socialization. Turnover is often high among new employees. Socialization practices—delivered via a strategic onboarding and assimilation program—can help new hires become embedded in the company and thus more likely to stay. These practices include shared and individualized learning experiences, formal and informal activities that help people get to know one another, and the assignment of more-seasoned employees as role models for new hires.
• Training and development. If employees are not given opportunities to continually update their skills, they are more inclined to leave.
• Lead the market with respect to compensation and rewards. 
• Tailor rewards to individual needs in a person-based pay structure.
• Explicitly link rewards to retention (e.g., tie vacation hours to seniority, offer retention bonuses or stock options to longer-term employees, or link defined benefit plan payouts to years of service).
• Supervision. Several studies have suggested that fair treatment by a supervisor is the most important determinant of retention. This would lead a company to focus on supervisory and management development and communication skill-building.
• Employee engagement. Engaged employees are satisfied with their jobs, enjoy their work and the organization, believe that their job is important, take pride in their company, and believe that their employer values their contributions. One study found that highly engaged employees were five times less likely to quit than employees who were not engaged. See  Developing and Sustaining Employee Engagement.  

SHRM's Better Workplaces on a Budget report includes findings on the leading causes of employee turnover with suggestions for low-cost solutions. 

Broad-based strategies

Broad-based strategies are directed at the entire organization or at large subsystems and are intended to address overall retention rates. Examples include providing across-the-board market-based salary increases, changing the hiring process to incorporate retention-related criteria and improving the work environment.  

The data needed to help a company determine which broad-based strategies to implement typically come from three places:

• Retention research can shed valuable light on the primary drivers of turnover. Attendance at conferences and membership in professional associations such as SHRM can provide access to the latest research on turnover and retention.
• Effective practices encompass the strategies that other organizations are using and are finding effective or ineffective.
• Benchmarking surveys can provide information about how a company compares to competitors on issues such as pay, benefits, bonus plans and the like.

What benefits can employers offer to improve employee retention?

More-Authentic Workplaces Lead to Better Retention, Productivity

10 Ways Technology Can Improve Employee Retention

Targeted strategies

Targeted strategies are based on data from several key sources, including organizational exit interviews, post-exit interviews, stay interviews , employee focus groups, predictive turnover studies and other qualitative studies. This information can lead an organization to determine more specifically where a problem exists and to develop highly relevant and linked strategies to address the issue. For example, if female professionals are departing the organization in significant numbers, a company could review common reasons that women give for leaving a company and develop strategies to specifically deal with this group of employees. See  Treat 'Vent Letters' Like Exit Interviews and  The Power of Stay Interviews for Engagement and Retention .

Implementation

People managers are key in the effective and efficient administration of an employee retention strategy. Having a management team that is educated about employee motivation, retention strategies, benchmarking and best-practices is critical to the success of the program.

Laying the groundwork

The following steps taken together can yield the information that an organization needs to determine the extent of its problem and to help shape the retention strategies that are implemented in response.

• Determine whether turnover is a problem. This step can be accomplished through turnover analysis, benchmarking and a needs assessment (both external and internal).
• Establish a plan of action. After reviewing the turnover analysis, benchmarking data and needs assessment, create a plan to improve retention. Identify broad-based or targeted strategies (or a combination) for implementation.
• Implement a retention plan. Execute the strategies that have been identified as appropriate for the specific problem.
• Evaluate the results. After implementing the plan, evaluate the results to assess the impact relative to the cost.  

Benchmarking

Establishing appropriate benchmarks—both external and internal—is a key first step in preparing to implement an employee retention strategy.

• External benchmarking. Is a 15 percent annual turnover rate too high? This question is impossible to answer in isolation. Benchmarking and a needs assessment can provide valuable information for determining whether turnover is a problem for an organization. Through external benchmarking, a company compares its turnover rates against industry and competitor rates. These data represent annual and monthly quit rates as a percentage of total employment for all non-farm employment across the United States, broken down by industry, geographic location, sector, etc. See  Department of Labor, Bureau of Labor Statistics—Job Openings and Labor Turnover Survey .
• Internal benchmarking. With this form of benchmarking, an organization tracks its turnover rate across time. If the rate increases, overall or among particular groups, this can be a red flag that a problem may exist. See  Turnover Cost Calculation Spreadsheet .

Dealing with common problems

As with all strategic initiatives, there are some common problems associated with employee retention programs. These include:

• Lack of top management support. If senior management does not send a message to managers and supervisors emphasizing that employees are critical to the company's long-term success, supervisory employees are unlikely to focus on people-related issues. Unless senior management actively participates in the retention process and takes primary responsibility for it, managers and employees will remain unsure of the true value of employees, both to senior management and to the organization.
• Perception of the program as time-consuming "busywork." Similarly, without an organizational commitment to the initiative and a clear understanding of how it is strategically contributing to the organization's successful long-term performance, managers may view a focus on people as, at best, "nice" or "just busywork" and, at worst, a huge waste of time that takes them away from the more important demands of their "real job."

Costs and return on investment

Because there are so many different actions a company can take to improve its employee retention rate, it is not feasible to quantify the "typical" costs—hard and soft—of designing and implementing a program. However, an organization should still try to budget its own initiative carefully.

The payback in financial terms can be estimated by reviewing a number of metrics, including turnover data, promotions/transfers from within versus outside recruiting, number of grievances filed, absenteeism, discrimination complaints, etc. See  To Have and to Hold .

Auditing and evaluating

Any initiative or program—especially one designed to retain an organization's key talent—needs to be continuously evaluated to determine if it is effective and to identify opportunities for improving it. An effective way to determine whether the employee retention program is working is to conduct an independent audit of the way the program is affecting various groups of employees. For example, are certain types of employees (e.g., low-skilled, highly skilled, technical, professional, managerial, executive or those with varying degrees of tenure) leaving the organization at more significant levels than others? If so, that group can be targeted for specific interventions.

One way to audit retention initiatives in addition to continuing to review turnover rates and exit interview results is to conduct stay interviews of current employees. Stay interviews help employers ascertain why good employees stay and what might make them leave. It is highly recommended that managers themselves conduct these meetings, after proper training, as they have the most direct relationships with employees.

Global approaches and perspectives

In an increasingly globalized economy, retention of quality employees is a global issue.

Increases in cultural differences within the workforce raise critical issues for employers. Employee retention efforts have proved very difficult to implement in some parts of the world due to differing expectations for pay, work assignments, benefits and the like. If a company is global in scope or simply has a highly diverse employee population, both cultural and national differences must be taken into account at the outset of the development of any new HR-related program, including employee retention strategies. See  English Classes Help Retain Immigrant Workers .

Employees on foreign assignments face a number of issues that domestic employees do not, and the retention of international assignees poses a significant challenge to employers. Poor repatriation planning by employers is often cited as a cause of high turnover of employees returning from foreign assignments. Employers must make efforts to keep in touch with expatriates to minimize employees' feelings of isolation and disconnectedness from the home organization. In addition, reverse culture shock can be an unexpected aspect of repatriation. Often, returning expats need a crash course on how to live in their homeland again, and employer support is critical for their retention. See  HR Best Practices Can Lead to a Better Expat Experience .

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14 Effective Employee Retention Strategies

As we move deeper into 2023, research from Robert Half suggests that many workers remain confident about their prospects in the current hiring market. For employers, this means maintaining vigilance about the risk of top performers walking out the door by keeping a focus on employee retention strategies.

Robert Half’s Job Optimism Survey of more than 2,500 professionals, which tracks worker sentiment on current and future career prospects, finds that 46% of respondents are currently looking or plan to look for a new role in the first half of 2023.

View this infographic to see additional results from our survey.

How to retain employees depends in large part on understanding what drives employee job satisfaction. So now is the time to confirm that your business is doing the right things to support the retention of highly valued talent. First, you need to understand why your employees might be looking for a new opportunity — and consider why some team members may have already tendered their resignations.

Why are workers leaving?

Exit interviews can provide invaluable insight into the employee perspective of your company and help determine whether your employee retention strategies need improvement.

More than likely, you’ll hear the departing employee cite one or more of the following reasons for leaving their job:

• Inadequate salary (Note: In Robert Half’s Job Optimism Survey, 61% of workers said a salary boost is the main reason they are seeking a new job.)
• A  perks and benefits package  that isn’t competitive
• Feeling overworked and/or unsupported
• Limited career advancement
• A need for better work-life balance
• Lack of recognition
• Unhappiness with management
• Concerns about the company’s direction or financial health
• Dissatisfaction with the company culture
• The desire to make a change
• More compelling job opportunities at other companies

Employee retention strategies for job satisfaction

While the job market in some industries and regions favors employers, candidates with in-demand skills likely won’t have to wait long to find a new opportunity. Many companies never stopped recruiting talent during the pandemic, and many others have picked up the pace of hiring in recent months.

If you sense your business is at risk of losing top talent, you need to move fast to shore up your employee retention strategies. Here are 14 areas where deliberate action can help boost employees’ job satisfaction and increase your ability to hold onto valued workers:

     1. Onboarding and orientation

Every new hire should be set up for success from the start. Your onboarding process should teach new employees not only about the job but also about the company culture and how they can contribute to and thrive in it. Don’t skimp on this critical first step. The training and support you provide from day one, whether in person or virtually, can set the tone for the employee’s entire tenure at your firm.

Need to onboard employees remotely? Make sure you have this onboarding checklist , compiled by Trisha Plovie , senior vice president, Future of Work, at Robert Half.

     2. Mentorship programs

Pairing a new employee with a mentor is a great component to add to your extended onboarding process, especially in a remote work environment. Mentors can welcome newcomers into the company, offer guidance and be a sounding board. And it’s a win-win: New team members learn the ropes from experienced employees, and, in return, they offer a fresh viewpoint to their mentors .

But don’t limit mentorship opportunities to new employees. Your existing staff — and your overall employee retention outlook and team’s job satisfaction — can significantly benefit from mentor-mentee relationships.

     3. Employee compensation

It’s essential for companies to pay their employees competitive compensation, which means employers need to evaluate and adjust salaries regularly. Even if your business can’t increase pay right now, consider whether you could provide other forms of compensation, such as bonuses. Don’t forget about improving health care benefits and retirement plans, which can help raise employees’ job satisfaction, too.

View our free Salary Guide to confirm you’re paying your employees competitive wages.

     4. Perks

Perks can make your workplace stand out to potential new hires and re-engage current staff while boosting employee morale. According to research for our Salary Guide, flexible schedules and remote work options are the perks many professionals value most. In addition, just over 40 percent of the professionals we surveyed said stipends for home offices are among the perks workers want most.

     5. Wellness offerings

Keeping employees fit — mentally, physically and financially — is just good business. Many leading employers expanded and improved their wellness offerings during 2021 and 2022, amid the pandemic, to help support employees and prioritize their well-being. Stress management programs, retirement planning services and reimbursement for fitness classes are just some examples of what your business might consider providing to employees in 2023 and beyond.

     6. Communication

The shift to hybrid and remote work has underscored the importance of good workplace communication. Your direct reports, whether they work on-site or remotely, should feel they can come to you with ideas, questions and concerns at any time. And as a leader, you need to make sure you’re doing your part to help promote timely, constructive and positive communication across the entire team. Make sure you proactively connect with each team member on a regular basis, too, to get a sense of their workload and job satisfaction.

     7. Continuous feedback on performance

Many employers are abandoning the annual performance review in favor of more frequent meetings with team members. In these one-on-one meetings, talk with your employees about their short- and long-term professional goals, deliver constructive feedback , and help them visualize their future with the company. While you should never make promises you can’t keep, talk through potential career advancement scenarios together and lay out a realistic plan for reaching those goals.

     8. Training and development

As part of providing continuous feedback on performance, you can help employees identify areas for professional growth, such as the need to learn new skills. Upskilling your employees is especially important today as technology continues to change how we work. When people upskill, they gain new abilities and competencies as business requirements evolve.

Make it a priority to invest in your workers’ professional development. Give them time to attend virtual conferences, provide tuition reimbursement or pay for continuing education. Also, don’t forget about succession planning , which can be a highly effective method for advancing professional development and building leadership skills.

     9. Recognition and rewards systems

Every person wants to feel appreciated for the work they do. And in today’s “anywhere workforce,” an employer’s gratitude can make an especially big impact. So be sure to thank your direct reports who go the extra mile and explain how their hard work helps the organization. Some companies set up formal rewards systems to incentivize great ideas and innovation, but you can institute compelling recognition programs even if you have a small team or limited budget.

     10. Work-life balance

What message is your time management sending to employees? Do you expect staff to be available around the clock? A healthy work-life balance is essential to job satisfaction. People need to know their managers understand they have lives outside of work — and recognize that maintaining balance can be even more challenging when working from home. Encourage employees to set boundaries and take their vacation time. And if late nights are necessary to wrap up a project, consider giving them extra time off to compensate.

     11. Flexible work arrangements

Many companies understand that even though they have reopened their offices, some of their employees still prefer to work remotely, at least part-time. Not having that option might even spur employees to resign. A recent Robert Half survey found that 56 percent of employees said remote work improved morale and overall work-life balance.

So think sooner than later about what you can offer employees if remote work on a permanent basis isn’t an option. A compressed workweek? Flextime? Or maybe a partial telecommuting option? All of the above can help relieve stress for your team — and boost employee retention.

     12. Effective change management

As we learned during the pandemic, every workplace has to deal with change, good and bad. And employees look to leadership for insight and reassurance during these times. If your organization is going through a big shift, keeping your team as informed as possible helps ease anxieties and manage the rumor mill. Make big announcements either individually or in a group call or meeting, and allow time for questions.

Need more insight into how to guide your team through change ?

     13. An emphasis on teamwork

You should encourage all your employees, not just star players, to contribute ideas and solutions. Promote teamwork by creating opportunities for collaboration, accommodating individuals’ work styles and giving everyone the latitude to make decisions and course corrections if needed.

     14. Acknowledgement of milestones, big and small

A final tip for promoting employee retention is to shine a light on notable achievements. Whether your team finishes ahead of the deadline on a major project or a worker reaches a five-year work anniversary, seize the opportunity to mark the milestone together. Even if you need to celebrate virtually, it can be a meaningful and memorable moment for everyone.

The 14 employee retention strategies outlined above are just some ways to help increase your team members’ job satisfaction. Be sure to re-evaluate your efforts regularly. That includes staying current on market standards for salary and benefits and best practices for developing an attractive workplace culture and strong manager-employee relations.

Some team members will inevitably leave your organization sooner than you’d like. But you can at least make their decision a little tougher. And if those employees leave your firm knowing they were valued and supported, they’ll likely say good things about your business and, perhaps, even come back to work for you one day.

What are the objectives and goals of employee retention ?

While hiring employees is a relatively easy task, it is not a painless task to retain them – and to retain them happily. Employee retention is simply defined as the ability of an organisation to retain its employees, thereby reducing the employee turnover, whilst also promoting an active and trustworthy working environment.

The employee retention objectives and goals include a wide variety of targets, designed specifically to make the working experience beneficial and smooth sailing for both employers and employees. It instils a sense of loyalty in the employees, which in turn, adds to growth of the company. Successful companies often have a laid-out framework to achieve maximum employee retention, which not only saves them resources and turnover costs, but also helps in building a network of self-driven and talented employees. Such employees thus have the motivation to take on specialised and expansive projects, and work in line with the company culture. 

Retention strategies for Employees also help in better customer engagement. Clients feel more secure and cared for if their business is handled through a continuous association with one single employee or the same team of employees. A host of changing employees grant the company a not-too-reliable image, and customers might feel alienated if the key figures keep changing too often. It makes a substantial dent in company morale as well. New employees not only mean a loss for the company in terms of turnover, but also include innumerable working hours spent in recruitment, selection, and training. Altogether, it poses a major hurdle in achieving the business requirements of a company.

A latest survey on turnover rates has revealed that the cost of employee turnover in 2018 exceeded $600 billion. While the turnover costs vary across countries and sectors, on an average, losing an entry-level employee can cause up to 50% of their salary,  a recent study on retention rates shows. It has also been revealed that the average US employee turnover rate has increased from 3.5 years in 1983, to 5.1 years in 2019. Thus, it is evident that there has been a steady inclination towards employee retention in the last decade. This is not only owing to the huge costs associated with employee turnovers, but also due to explicit loss of productivity and expertise that comes with it.

In employee retention, the role of Human Resources (HR), becomes extremely crucial. It is the responsibility of Human Resources to design, manage, and update various policies and processes through which staff retention can take place effectively. It is also instrumental in the creation of a working environment that facilitates professional development for different types of employees and helps them carve out their own career path. By creating mechanisms to ensure work-life balance, while also striving forward to achieve company’s business goals, HR makes sure that both parties are benefited and satisfied.

To do this, it sets up objectives and goals of employee retention in the following ways:

• designing and updating an effective employee retention program
• looking after employee nomination and approval plans
• adapting schemes according to changing conditions, etc.

This just goes to show the importance of employee retention in any company to achieve an easy flowing experience. It needs a systematic approach to it, that has various positive outcomes.

Table of Contents

Objectives and Goals of Employee Retention

1. to reduce turnover hassles.

Employee turnover costs a company not only in terms of money, but also time and productivity. Replacing people means hours spent in hiring and training, which also becomes cumbersome for existing employees. It becomes even more difficult when it comes to replacing senior-level executives, sometimes the cost of turnover reaching 213% of a CEO’s salary to replace such employees! Thus, to replace highly educated or skilled employees, is a risky and costly task, and it often takes a substantial amount of time to make up for these huge losses.

2. To Reduce Acquisition and Training Time

It is no secret that hiring the right employees can go a long way in bringing all-round profits for any company. While dedicated workers can take the company to new heights meeting collective objectives, wrong fits can cause the company a ton in terms of both monetary and human resources. Training an employee to meet the job description is not an easy task, and usually takes a lot of effort back and forth between the trainer and the trainee. It is a much easier and safer option to keep existing employees satisfied, than to spend precious company time in acquiring new ones.

3. To Improve Employee Morale

Employee satisfaction rates are directly connected to the success of a company, however small or large. An office is not just a cubicle with no communication with the outside world but is rather a breeding ground for young friendships and good life experience. Seeing one’s colleagues get regularly replaced not only comes off as a personal loss to employees but makes them question their own security in the distant future. Team dynamics also change, and it usually takes months for team members to build a rapport that would bring them up to speed with productivity again. Disruption in communication between employees thus renders a huge hit to both productivity and employee morale.

4. To achieve Increased Employee Productivity

By now, it is clear that employee retention can be one of the best ways to ensure that a company continues to grow. A successful retention scheme can also be a fundamental way of ensuring effective employee engagement. A long-drawn association with a company ensures that employees know its nooks and crannies, and can contribute to it wholeheartedly, often going the extra mile for achieving the business objective.

On the other hand, employee retention challenges occur when experienced employees leave, they also take away essential expertise and mechanisms that they learned from the company. This could pose a threat from another company offering competitive salary, and could also lead to a loss of loyal customers in the long run.

5. To achieve Improved Customer Experiences

Keeping in mind the bigger picture, employee retention becomes essential in order to ensure customer satisfaction. One study has found that improved customer relations can boost a company’s sales by almost 20%. Apart from this, experienced employees have better knowledge and skills to deal with customers they have a long association with, thus decreasing time spent in problem solving. In customer-oriented businesses, the replacement of employees could incur huge losses to the company. The easiest way for this to take place is through the direct communication between a customer and a disgruntled employee. Unhappy employees could partake in cutting corners, or rude behaviour, causing harm not only to sale numbers, but also to the company name at large.

Employee retention strategies should ideally focus on not only keeping the employees satisfied with their present position in the company, but also help them in setting targets for their career development. A study on why employees leave their jobs revealed that the lack of a healthy work life balance and job satisfaction factor as major reasons for the same. Unmitigated cold behaviour by superiors severely affects competent employees, and subsequently, makes them question company values. Therefore, employee attitude goes a long way in deciding organisational performance and achieving business objectives. to grow. A successful retention scheme can also be a fundamental way of ensuring effective employee engagement. A long-drawn association with a company ensures that employees know its nooks and crannies, and can contribute to it wholeheartedly, often going the extra mile for achieving the business objective.

On the other hand, when experienced employees leave, they also take away essential expertise and mechanisms that they learned from the company. This could pose a threat from another company offering competitive salary, and could also lead to a loss of loyal customers in the long run.

To summarize, Employee retention is a multi-purpose strategy that serves the company in fulfilling both short-term, and long-term goals. It saves the company thousands of dollars in turnover payments, whilst also saving precious working hours spent in recruiting and training new employees. It is a relatively easy way to ensure that the company is heading in the right direction, since the employees are motivated and dedicated to give their best.

With employees that see eye-to-eye with the company vision and strive to create a healthy space for themselves within the company, productivity soars to new heights within the shortest time period. When management and employees can rely on each other, daily hassles are easily managed. Moreover, when employees feel secure about their positions, they can utilise their time to work on their skills, eventually contributing to the company in newer ways.

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• DOI: 10.60079/ahrmr.v2i1.246
• Corpus ID: 270052432

Exploring Comprehensive Approaches to Employee Health and Happiness

• Oki Hartanto
• Published in Advances in Human Resource… 31 January 2024
• Business, Psychology
• Advances in Human Resource Management Research

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10 Employee Retention Strategies That Reduce Turnover

Content Director and Employee Engagement Researcher

On this page

• Take It With You:
• Why Is Employee Retention So Important?
• Why Do Employees Leave?
• How to Get Employees to Stay
• Boost Employee Retention with Mentoring

If this decade has taught us anything, it’s that labor markets are only getting tighter. Technological advances like AI may (questionably, the ethics are a bit suspect here) provide some relief, but fewer high-quality employees means employee retention will continue to be a major thorn in the side of HR leaders everywhere.

Companies will always be people-driven, but if the right people are getting harder to find, it means the employee-employer dynamic will sit more squarely with workers. That means you can expect more turnover, especially among high performers. It also means companies must get more creative with their employee retention strategies, or risk losing their best employees to competitors whose offering is more aligned with workers’ needs.

Rather than letting these valuable workers drive up your employee turnover rates , your company may need to focus on strategies that retain employees longer. A good employee retention strategy isn’t just about offering something of value to your employees in the hopes that they feel welcomed and wanted. It is about choosing actions that lead to lasting change and a better working environment for all.

Download our ebook on Why Employees Leave and how mentoring programs increase retention and save companies millions of dollars in turnover costs

The average tenure of employees has been dropping year-over-year. While the global pandemic had an impact, this was a trend that pre-dated the pandemic. In fact, according to a Lending Tree study that analyzed data from the Bureau of Labor Statistics, the median tenure across all working ages has dropped 10%.

There's an even bigger story here, though, as the median tenure at work for women has dropped over 17% during that time period.

Employee retention is the strategy that keeps your top talent at your side for as long as possible. While the average years of tenure have dropped, you also don't want to see them bouncing on to their next role in under a year. Every industry has voluntary turnover, but you don't want to see new hires barely getting settled before they are out the door again.

Likewise, you want to make sure that your most valuable and experienced employees have the motivation to stay with you. Replacing their expertise could prove to be difficult and expensive, and their loss can negatively impact the team as a whole if good succession planning is not in place.

No manager wants to sit down and realize that their team is a sea of different faces compared to the same time last year. Employee retention strategies are needed to convince people that the best place for them is right here in your company and that the company overall is a great place to work.

Employees leave because either your company isn't supporting them in the ways they need or simply because they have a better offer elsewhere. Remember The Great Resignation ? Of course you do. Bad news: Some industry observers are expecting a Great Resignation 2.0 in the coming future. That's based on surveys showing an overwhelming majority of people want to quit their current jobs.

The reasons why people are quitting are compounded by many different factors:

• Stagnant wages and compensation
• Little to no work-life balance
• Poor company culture
• Strict return-to-office mandates

That last one, in particular, is something that's driving high-potential and high-value employees right into the arms of competitors who still offer remote work. A recent study by researchers from the University of Michigan, Ipsos Public Affairs, and the University of Chicago found that RTO policies drive away not just talented employees but primarily senior-level employees . As the authors stated:

"Our results suggest that return-to-office policies can lead to an outflow of senior employees, posing a potential threat to the productivity, innovation, and competitiveness of the wider firm."

Another business might offer more competitive pay or better working hours. They might want to gain certain skills, work under or with a particular person, or even just want to support a specific cause. Sometimes, it is even due to no fault of your company; the employee is grateful for their time with you, but they are ready to move on.

Though retaining talent should be your goal, you also need to recognize when it is better to say goodbye . Nurturing relationships with those who do leave you can be helpful in case they decide to come back one day, but your focus, for now, should be on those employees you actively want to retain.

Encouraging employees to stay can require you to take a long, hard look at your current working environment to see where things might not exactly be optimal. You may have to adapt existing policies or potentially even create some new ones.

Any initiative needs to include dialogue with your employees. You cannot expect to make changes that benefit them without knowing where they are struggling. Many employees feel like they can't comfortably speak up about changes they would like to see unless they are first invited to do so. Giving them the opportunity to voice these changes fairly and openly can provoke the confidence that they need to do so.

10 effective employee retention strategies

No one line of action will fix any employee retention issues your organization may be dealing with. However, the 10 following strategies could help you make the changes needed to retain your employees more effectively.

1. Offer competitive salaries and compensation

We all need to start somewhere, and more often than not, this is with our pay. You need to have a good foundation of pay and a clear structure for how it increases over the length of service. Employees will feel motivated simply by knowing that they are paid fairly for their work.

Note this as well: Pay transparency is trending. Influencers such as Hannah Williams of Salary Transparent Street are on a mission to not only make pay transparency legally required in job postings, but are encouraging employees to ask for better salaries when they're underpaid based on the market.

@salarytransparentstreet #FinancialAnalyst in Atlanta, GA📍 #salarytransparentstreet #salarytransparency #paytransparency #howmuchdoyoumake ♬ original sound - Salary Transparent Street

Will this be the only employee retention strategy you need? Most likely not, but you need to start somewhere.

Fair rates of pay should be a standard regardless of the industry you are in. When even your most junior and inexperienced members of staff are fairly compensated, everyone feels less likely to look elsewhere. Though you may take the federal minimum wage into consideration for low-ranking employees, you should also consider the living wage based on the state your employees are working from.

You should also take into consideration what your business's competition pays their employees. Competitive pay can be a key factor that could sway an employee into ditching your company for your business rivals. Offering top rates of pay can help you to attract and retain the best talent, meaning you won't have to waste thousands on potentially unfruitful recruitment processes or training up under-qualified second-choice hires.

2. Hire the right people

A lot of the groundwork for good employee retention strategies can be laid during the recruitment process. You obviously want to find candidates who match the skills and experience you need to see for success in your vacancy. However, you also need to find someone who will fit in well with the company culture.

Team chemistry can be difficult to get right, yet so much of a workforce's success can balance on it. You don't want to spend resources recruiting someone who meets your requirements on paper only for them to fail to mesh well with the rest of the team.

Creating and hiring based on certain core values can help here. At MentorcliQ, employees are hired not just on the skills they bring to the table but their alignment with our core values: Fun, Helpful, Ambitious, and Thoughtful (FunHAT, for short).

You need to have an employee value proposition handy, e.g., something that makes people want to work for you. That way, you'll attract the right people to your open positions.

3. Start on the right foot

It is never too early to start thinking about key retention strategies and how to minimize employee turnover. Recruitment is one thing, and onboarding is very much another. To truly retain employees, you need to make sure that you have a good onboarding process. We've mentioned it before, but research shows that new hires are also the most likely to jump ship. Though they should be keen to dive in and get to work, this crucial period can be where they don't feel like they fit in, and they may decide to move on (or even head back to their old role!).

Onboarding is a great point to introduce mentoring . It can be as formal as you like; some new hires can benefit from something formal and structured while others might just flourish with the help of a buddy system . Either way, it is a great way to engage new employees and help them feel welcome in the company as soon as possible.

4. Build a culture employees want to engage with

People will only want to stay with a company as long as there is room for them to feel welcome and belong . Building a collaborative and fun company culture is key. Though every business has difficult times, ultimately a good culture in the company means most employees feel like they are motivated and can come to work with a positive outlook on the day ahead. If work only causes stress and upset, employees will begin to look for roles in other companies.

A strong culture can look like many things. It might involve job security alongside satisfaction, or it might involve the development of in-demand skills across the full workforce. Mentorship programs and a commitment to a positive work environment all feed into effective employee retention strategies. Creating a culture that cares does not have to be industry jargon or a false corporate promise, it can be something that you all actively strive for as a company.

5. Boost employee engagement

Employee engagement is a key part of retention strategies. When employees are adequately engaged, they are more likely to be focused on their work, and less likely to start looking at more compelling job opportunities elsewhere.

In 2023, 50% of employees were thought to be not engaged with their work, and the rise of the quiet quitting trend — where employees refuse to go above and beyond, doing nothing except for their assigned work — shows that people are not as devoted to their jobs as they once were.

Choosing to build employee engagement can help increase job satisfaction and allow employees to fully understand their role and how it helps the company. When you see nothing but four cubicle walls and a computer screen all day, it can be difficult to know how the things you do aid the company.

Measuring employee job satisfaction isn't always the easiest of tasks, but there are a few ways you can facilitate it. Most importantly, employees need to be able to give honest and open feedback. Sometimes this is best done anonymously, other times an employee might feel safe enough to offer such feedback to a trusted manager or mentor.

Feedback can help to make adjustments to workflows or responsibilities, or it might be crucial in launching a key initiative that boosts employee satisfaction and retention overall. However, feedback should never be forced. Encourage employees to share their thoughts and feelings, but be aware that mandatory demands for feedback can bring negative effects and pushback, potentially disengaging employees further.

6. Reduce burnout through support and wellness offerings

It isn't just about the paycheck nowadays. A company's benefits package needs to be well-rounded and well-thought-out. A healthy work-life balance is the priority for many nowadays, with 72% of workers believing this to be a crucial part of choosing a job.

Even something as simple as allowing remote work or a few days working from home rather than in the office can make a huge difference in employee retention. Younger generations like millennials and Gen Z value being able to fit their working hours around their personal lives and commitments; the opposite of some of their older colleagues. If a job cannot adequately meet what an employee might require, such as flexible schedules to match up with childcare needs, it is understandable that a worker might look for a new job.

Employee benefits like snacks or coffee in the office and free gym memberships can sometimes seem a little basic, but they are popular for a reason. Other incentives like flexible PTO or mental health leave prove to be popular and again allow employees more control over their lives.

7. Offer tailored learning and development plans

Professional development is a must for all employees nowadays. Even the newest of hires fresh from college may have an idea of what they want their career trajectory to look like. All hires, no matter how established they are in their career should be offered the opportunity to sit down and talk about the skills and experiences they wish to gain in the future. Career mapping conversations can be ideal for employee retention. They allow managers and mentors to create tangible and achievable goals for their mentees to work towards, while also showing employees that their ambitions are respected by the company.

This is especially important for younger employees. One survey shows that 44% of workers aged 18-34 will consider leaving their jobs due to insufficient learning and development opportunities. In order to see increased employee retention for these key workers, many of whom are already moving into management positions, companies should look to develop employees as they best see fit.

8. Offer rewards and recognition programs

Everyone wants to be recognized for the job that they do. When we put the hard work into completing our task, we want to be rewarded. Though flexible hours and a better work-life balance are expected by employees as they should, the occasional reward and recognition can take things to the next level.

Providing employees with regular feedback lets them know about their accomplishments lie and where they could benefit from some improvement. Company-wide recognition can also help boost their self-esteem and confidence, and can range from afternoons off to seasonal bonuses or maybe even the dreaded corporate pizza party .

9. Improve management

You can plan as many employee retention strategies as you like — you can improve the working experience for all teams and ensure that even a new employee on their first day on the job will hit the ground running. However, nothing makes a job unbearable quite like a bad manager.

Employees quit when they work under someone who doesn't respect them or their abilities. If you don't want your top talent walking out the door, you need to ensure that those at the top of your organizational culture have the leadership and management skills needed to lead their teams correctly.

Creating a strong culture and uplifting the skills of managers are two retention strategies that need to go hand in hand. Analysis has shown that many people blame managers and quit when they should be blaming the system or company that they are all under. Nurturing both will help create a welcoming environment in which employees want to thrive.

10. Build collaboration and communication

A workforce needs to be able to collaborate and communicate with each other smoothly. This can be incredibly important with organizations that support flexible work arrangements as you might not be in the same office as a colleague, or even the same country! No matter what, lines of communication need to remain clear and open.

To perform at their best, employees need to maintain lines of communication. Though most should not have access to all messages passed within the business, no one should feel like they are deliberately being kept in the dark or caught off guard by changes.

Employee retention issues frequently pop up when workers feel disengaged and detached from the company. One proven employee engagement method that helps them see the value in their career and efforts will always be mentoring.

MentorcliQ makes employee retention easy by helping you quickly launch, match, engage, and measure participants into mentoring programs and employee resource groups (ERGs). Our top-rated employee mentoring and ERG software removes the administrative burden many mentoring programs require. Mentoring should form a key part of your company's health and wellness program and can really help employees define their own space and role within the company.

Get in touch with us and find out how MentorcliQ can engage and retain your employees today!

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27 Best Employee Retention Strategies for 2024

Hiring the right talents can be difficult, but retaining them is an entirely new challenge. One of the first signs of employees on the verge of leaving a job is disengagement. Therefore, creating a highly engaged workforce where employees feel valued is highly necessary. The initial step to ensuring this is implementing competent employee retention strategies.

Let us understand employee retention properly and explore its strategies to help you retain your top performers.

Key Takeaways

• What is Employee Retention
• What are the 30 Effective Employee Retention Strategies in 2024
• Why is employee retention important
• How to retain employees

What is Employee Retention?

In simple words, employee retention is the effort taken by an organization to hold on to its most prized asset - the employees! Moreover, a low or high employee retention rate directly impacts the company's overall business.

Knowing and managing your company's employee turnover rate is essential if you want to stay in business for the long haul.

Consequently, to manage and avoid high turnover, retaining key employees becomes a crucial element.

Implementing a data-driven staff retention strategy rather than firing point-blank is also an excellent practice. It is advisable to monitor the employee retention rate periodically- half-yearly or quarterly.

27 Effective Employee Retention Strategies in 2024

1. hiring for cultural fit.

Culture is what motivates and retains talented employees. – Betty Thompson

People can develop skills and expertise. However, hiring someone keeping your cultural values in mind will result in more loyal and engaged employees. New hires can blend in with the team quickly. They feel comfortable and can contribute faster.

Ask questions that are related to your company values. Explain how the role correlates with the values. It will help them get an idea of what is expected of them.

2. Diversity and Inclusion

Research shows that organizations that promote and support DEI are 2.6 times more likely to increase employee engagement and improve retention.

Consequently, you must strive to create a workplace that identifies and respects people from all backgrounds and sexual orientations. There are some ways through which you can promote diversity and inclusion in the workplace. They are as follows:

• Provide diversity and inclusion training
• Implement fair and inclusive hiring practices
• Encourage dialogue about diversity.
• Strive for diverse leadership representation.
• Celebrate diversity through events and recognition.

3. Clean and Hygienic Workplace

Hygiene is the most important factor in any work environment. It may seem obvious, but a clean and tidy work environment facilitates employee well-being and safety. Irrespective of your work line, you must make your workspace clean and comfortable if you want your employees to be productive.

Employees who feel safe and secure in their work environment will be more productive and efficient.

4. Hybrid Workplaces

Flexible work arrangements have become one of the top things people look for in a new job. They have become an expectation rather than a benefit. The hybrid workplace has been in high demand for the convenience it offers to employees. It allows employees to choose between working remotely or on-site.

• This is why hybrid working can be a win-win situation for both employees and employers.
• It can help employees save time and money while commuting.
• It improves work-life balance, increases productivity and job satisfaction levels
• On the other hand, employers can save on overhead costs, avoid office politics, and reduce absenteeism.
• It gives them access to a diverse talent pool.

5. Reduced Workdays

Typically, people who work long hours or leave the office last are seen to be more dedicated and productive. Let's look at two scenarios.

Employee 1 does not take any breaks (except for lunch). They finish their tasks and decide to leave after 6 hours of work.

Employee 2 occasionally takes 10 minutes of cigarette breaks and engages in "coffee machine" chats. Then they finish their tasks and decide to leave after 8 hours.

Both the employees have fulfilled their daily obligations but at different times.

Alex Soojung-Kim Pang vouches for the same in his book Rest: Why You Get More Done When You Work Less. He mentions that the state of being “busy” does not necessarily mean effectiveness. It is instead an obstacle to success.

The instances highlighted above shed insight into the importance of quality over quantity. You can efficiently complete your task within a limited time rather than working long hours and fetching no proper results.

Hence, prioritize efficient task completion and embrace rest over long hours of whiling away. This will lead to increased productivity and a sense of satisfaction among employees.

6. Rewarding Efforts and Not Just Results

It is easier to measure results than the efforts taken to get that result.

We have all been in situations where we worked really hard to get that sales deal or reach those numbers. In contrast, a colleague gets it at the snap of a finger. Not because we are less competent but because things don't always go according to our plans.

Companies must empathize with the reality of the ground and recognize their efforts. A great example of this is how a US-based company, Next Jump. They have decided to reward employees based on how much they have helped their coworkers.

So, it's time to recognize and reward hard work rather than just appreciating results!

7. Workation

A workation, also known as a workcation, is an employee-friendly trend that makes your company stand out in talent acquisition. It happens when you combine "work" and "vacation."

Workation helps you define your culture and gain a competitive edge. If you want your business to be attractive to employees, communicate that you care for them and, in return, will make them love their jobs. A unique working environment can be a unique differentiator when improving your staff retention strategy.

8. Rewarding & Recognizing Employees

Sometimes, your employees expect more than a thank you or a pat on the back. Rewarding and congratulating them for their efforts is important when they fulfill their goals. Some ways to reward and recognize your employees are through appreciation, corporate gifts, point-based reward systems, performance awards, etc.

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9. Creating a Culture of Peer-to-Peer Recognition

You know your staff retention strategies work when your employees trust and believe in each other. They will help and work as a team when they value each other. This will lessen internal conflicts and create a culture of peer-to-peer recognition.

10. Celebrate Employee Tenure with Service Yearbook

A service yearbook is an excellent way to recognize and reward your long-term employees for their years of service. It is a great addition to your company culture, helping to create meaningful employee experiences. Employee experience results in more employee engagement, which ultimately affects talent retention.

Employees feel valued and appreciated for recognizing the time and hard work they put into your organization.

11. Employee Health Insurance

You can give your employees more than just sick leaves and free health checkups.

LinkedIn gave its employees a mental week off to cope with burnout.

Apart from that, make sure there are strict safety protocols for a hygienic workplace. You can have a comprehensive health plan for your employees' overall wellness. Your health plan can include meal tracking, fitness tracking activities, etc.

Providing health insurance is another excellent way to take care of their wellness.

12. Providing Financial Wellness Programs

A financial wellness program is subjective in nature. It should be tailor-made to suit your employees' finances and goals. Some employee financial wellness benefits to include are:

• Retirement plans
• Student loan repayments
• Flexible paydays
• Personalized financial advice programs

Recommended Read: Financial Wellness Benefits: Why you should care?

13. Providing Monetary Benefits

One of the major reasons that make employees quit is the lack of compensation. To avoid this, you can give fair and just appraisals to every deserving candidate. A salary hike is another way to retain top performers. Your workforce would be demotivated if they did not receive the proper benefits.

Thus, leaders should build a competitive benefit package such as:

• Salary hikes
• Health benefits

14. Creative Ways of Compensation

Of course, a family lunch coupon, a care package, etc, sounds nice. But you must think beyond these short-lived delights. It shows that you are as invested in your employees’ growth as your company’s.

You can explore a creative range of compensation ideas. They are as follows:

• Wellness stipends for gym memberships, fitness classes, or mental health resources.
• Offering reimbursement for continuing education, certifications, or professional development courses.
• Subscriptions for OTT content platforms
• Paid time off for volunteer work.

15. ESOPs (Employee Stock Ownership Program)

ESOPs (Employee Stock Ownership Program) is an excellent way to compensate your employees as a bonus or incentive. Making the employees become your company's stakeholders helps them stay invested in its performance.

While ESOPs provide liquidity benefits for employers, they may not be ideal during the time when the company undergoes a struggle. In such situations, employees might perceive ownership as a burden rather than a motivation.

Some other versions of employee stock ownership include the Phantom Stock Plan, stock appreciation rights, and direct purchase plans. These plans offer alternative approaches to aligning employee incentives with company success.

While ESOPs can be a powerful tool for incentivizing employees and promoting company loyalty. However, carefully considering the company's financial health and employee sentiment is essential in determining the most suitable compensation strategy.

16. Sabbatical Programs

Sabbatical programs are a great way to retain top talents. It shows that you appreciate your long-term employees' hard work and service. The company's leave policy states that sabbatical leaves can last six weeks or more.

Employees can benefit a lot from sabbatical leave. They get a chance to develop new skills and work on their passion project. Some are just happy to spend quality time with their loved ones.

You can also organize a mental week off for your remote employees, if not for a month.

It is found that employees come back much more motivated and refreshed after a good long break.

17. Profit-sharing Plan

A profit-sharing plan is used by employers to distribute a portion of a business's profits to employees.

When employees are given a piece of the pie, they're more motivated to go the extra mile.

A profit-sharing plan is a great way for organizations to share profits with employees meaningfully. It can help retain valuable talent, incentivizing people to work harder and better over the long term.

18. Encouraging Open Communication

You can foster an environment where employees are unafraid to voice their opinions. In other words, they need a workplace where they can freely express their ideas and concerns.

An “open-door policy” is one of the most effective communication strategies to establish a culture of transparency and trust. It shows that you're always available to listen to their views.

19. Practicing a Feedback Culture

There’s feedback on the work. There’s feedback on the individual’s performance. And there’s feedback on how the individual’s doing in their career. – Shell M Phelps

Regular feedback and suggestions can help you stay connected with your employees. During these difficult times, you must empathize with your workers and keep a check on them. This helps you to get the pulse of your workforce.

Communicate as often as possible. Ask them what virtual work challenges they are facing. Let them know what’s on your mind so they feel they are not alone in this.

This will increase their loyalty and trust in your leadership style and company.

20. Developing Orientation Programs

Good managers always keep their employees informed. They clearly explain the policies and expectations of the employee from the beginning. Furthermore, orientation programs help employees to understand how to contribute and excel.

Remember to include a cultural induction as well. This will help the new hires understand your core values and culture.

21. Conducting Exit interviews

Sometimes, letting go of an employee is inevitable. Hence, conducting exit interviews just before an employee is about to leave is very crucial.

An exit interview asks departing employees about their experience at the company. This process can help illuminate toxic management practices, departmental conflicts, etc.

It is, however, equally important to back up such an interview with a list of effective exit interview questions.

22. Shaping their Growth and Development

One of the most crucial employee retention strategies is helping employees achieve their short-term and long-term goals. It shows that you are invested in their future just as they are. Most millennials and Gen-Z workers will choose a lower-paying job if they see development opportunities.

Therefore, designing in-house corporate training programs can advance employees' professional development. Other methods include encouraging them to attend conferences, industry events, etc., which can increase employee retention strategies.

23. Altering Work Responsibilities

Doing the same work becomes tedious. In that case, don't make employees stick to their laid-down responsibilities. Involve them in various tasks and allow them to work with other departments. This will help generate better ideas and improve coworker relationships. It will also make them more skilled and advanced in their professional development.

You can also try to encourage creativity and give them personal growth opportunities.

24. Engaging in CSR Programs

Reports show that millennials and Gen-Z workers are more inclined towards social responsibility. They believe in giving back to the community. Especially in times like this, people value empathy.

Contributing to society and helping those in need are feel-good factors. It inspires loyalty and engagement in your people. A CSR initiative where the workers can contribute their participation is an excellent employee retention idea. It will go a long way in creating effective employee engagement.

Since physical team activities are impossible, virtual CSR activities are a much more workable option. You can organize activities such as virtual charity bingo. There are also some activities that you can do individually or remotely, such as planting trees, cooking for a cause, donating to the suffering communities, etc.

It fosters a sense of fulfillment and team bonding.

25. Bonding with Employees

People don’t leave jobs, they leave bad bosses. – Marcus Buckingham

A good manager works continuously to nurture their relationship with the team members. Above all, bonding with employees outside work is as important as inside the office.

Team lunches, group treks, and excursions are ways to celebrate employees. Celebrating their achievements- a new house, marriage- will deepen your bond.

26. Initiating a Mentor/Buddy Culture

Most people don’t like to be micro-managed. Most people don’t like to be managed at all!

Clint Pulver is the founder and president of the Center for Employee Retention. He believes in leadership that helps, encourages, and supports their employees. In his book "I love it here," he tells us how mentorship over old-school management techniques is better. And how it can totally transform an average employee into a high performer.

Assigning a mentor or a buddy to a new employee is also a great onboarding idea. The newcomer can learn about their work and the existing techniques from his mentor. Moreover, a new employee can offer a fresh take on things. As a result, this will help generate creative and innovative ideas.

27. Virtual Team-Building Activities

Working in a virtual environment can be difficult for some employees. While you might think working from home or other remote locations would appeal to all workers. However, the ability to work virtually, like in an office setting, is not for everyone.

As a result, most remote employees feel isolated from their co-workers. They can't fully immerse themselves in the company's culture. Thus, virtual team building becomes necessary and often plays an important role in talent retention.

These activities are carried out by management to improve group processes and interactions and increase employee engagement and morale. It also develops better working relationships between employees.

Why is Employee Retention Important?

Employee Retention is crucial to an organization’s growth and success. The strategies of employee retention have their fair share of importance that adds weightage to the fruitful journey of an organization.

Let us take a glance at the importance in the section below.

• Employee retention is the surest way to ensure cost reduction. Retaining employees significantly costs less than constantly recruiting and training new ones.
• Losing out on experienced employees leads to a huge loss of institutional knowledge, skills, and relationships within the organization, customers, and partners. Hence, retaining senior and experienced employees will make your organization see significant returns as they undertake and master complex issues independently, benefiting the organization.
• Retention is a vital means to maintain and enhance customer service and satisfaction. Experienced employees develop a smooth rapport with customers over time. Losing out on them might weaken the rapport with customer service, as the new employees might take time and be less adept at problem-solving.
• Retention builds the morale of the employees. Witnessing limited turnover creates a sense of loyalty and teamwork among the employees. They feel their work is valued and get further motivated to work harder.

How to Retain Employees?

Explain ‘herzberg’s two-factor theory’ and how it helps to retain employees.

Herzberg’s Two-Factor Theory, also known as the Motivation-Hygiene Theory or Dual-Factor Theory, was proposed in the 1950s by psychologist Frederick Herzberg. The theory emphasizes that two sets of factors majorly influence employee satisfaction and motivation at work: hygiene factors and motivators. Let us delve into each factor individually.

Hygiene Factors

These are extrinsic factors that cover the job context or work environment. They do not necessarily lead to satisfaction, but their absence can stir some form of dissatisfaction among employees. Hygiene factors include:

• Company policies: These comprise organizational rules, procedures, and administrative practices.
• Interpersonal relationships: This covers the nature of relationships with supervisors, peers, and subordinates.
• Salary and benefits: This includes compensation, job security, and fringe benefits.
• Work Conditions: This includes the physical work environment and amenities.
• Supervision: This covers the quality of supervision and leadership provided by managers.

The theory suggests that addressing hygiene factors can prevent employees from becoming prone to job dissatisfaction. But at the same time, it will not increase motivation or satisfaction. To truly motivate employees, organizations must emphasize providing motivation.

These are intrinsic factors that lead to job satisfaction and motivation. They are directly related to work and include elements such as:

• Achievement: Attaining a sense of accomplishment and personal growth from work.
• Recognition: Getting acknowledged and appreciated for one’s accomplishments.
• Responsibility: Getting entrusted with interesting and significant responsibilities with autonomy.
• Advancement: Getting opportunities for growth, promotion, and career advancement.

According to Herzberg, these motivators are essential for creating a fulfilling environment that drives employees to perform their best. As a result, it leads to higher motivation, job satisfaction, and higher productivity.

Now, you might wonder how the theory helps retain employees. Well, it provides valuable insights in the following ways:

• Addresses hygiene factors: Organizations can prevent job dissatisfaction and reduce employee turnover by ensuring ways to meet hygiene factors.
• Provides motivators: Retaining talented employees and fostering long-term commitment will require organizations to focus on providing motivators.
• Tailors strategies: The theory also suggests that organizations should tailor their retention strategies by considering individual employee needs and preferences, as different factors may motivate different individuals.
• Continuous Improvement: The theory encourages organizations to consistently evaluate and improve hygiene factors and motivators that allow them to maintain a motivated and satisfied workforce.

Creative Ways to Retain Employees

While it is clear that retaining employees is crucial for organizations’ long-term success, it is to be noted that simply sticking to traditional ways of retention may not give you the desired result. The need of the hour is to develop creative ways to contribute to employee retention. The following are some creative ways that you may consider.

1. Learning expeditions

You can organize company-sponsored trips or expeditions that perfectly blend learning and adventure. This can include visiting innovative companies, exploring unique cultures, or participating in educational experiences.

2. Reverse Mentoring Program

This initiative could rather be a unique one to bring about a change from the traditional approach. In this program, you can give your younger employees a chance to mentor senior leaders on topics like social media, technology, or emerging trends.

4. Creativity challenges

You can step forward to host regular creativity challenges or hackathons, where employees are encouraged to collaborate and solve real business problems by developing innovative solutions.

5. Experiential Benefits

Offer unique experiential benefits, such as outdoor adventures, tickets to cultural events, or exclusive culinary experiences.

By now, you must be clear that retaining top talent requires a strategic focus on employee needs. Organizations can boost retention by fostering engaging workplace cultures, providing growth opportunities, recognizing contributions, embracing flexibility, and building trust. Making employees feel valued and invested strengthens organizational agility and success.

Therefore, it is your turn to make your call and implement these strategies for your desired outcome.

How to determine which employee retention strategies are best suited for my organization?

To determine the best retention strategies, you can do the following:

• Assess your organization's culture,
• Gather feedback from employees,
• Analyze turnover data and consider industry best practices,
• Tailor your approach to address specific challenges and priorities within your workforce.

How can I measure the effectiveness of employee retention strategies?

You can measure effectiveness by tracking metrics such as turnover rates, employee satisfaction scores, engagement levels, performance indicators, and feedback from exit interviews or surveys.

This article is written by Riha Jaishi , a Content Writer at Vantage Circle. Apart from being an active and keen writer, she is generally found reading books and articles, feasting her eyes on food videos, and binging on her favorite shows and discussing them. For any related queries, contact [email protected]

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Navigating the labor mismatch in US logistics and supply chains

As the US economy recovers postpandemic, demand for labor has outstripped supply. Companies are facing the “ Great Attrition ,” coupled with increased competition for labor. The transportation and logistics sector has been particularly hard hit, with the impact of worker-retention challenges and rising labor costs being felt across the entire value chain.

The labor mismatch has pushed private-sector wages to increase at more than double the long-term pre-COVID-19 growth rates, yet positions remain unfilled. There are several underlying factors for this imbalance. Some are directly related to the impact of the COVID-19 pandemic and are therefore likely to be temporary. There are indications, however, that deeper structural shifts are at play that could have a longer-lasting impact on labor supply and demand. On the supply side, evolving work preferences and accelerated retirement may continue for some time; likewise, demand shifts from services to goods also appear to have some staying power.

Addressing the challenges is not easy, and focusing on recruitment and pay may not be sufficient to resolve the issue. Successfully navigating the current labor mismatch requires a comprehensive set of coordinated actions that address labor issues and their effects across the value chain. Nevertheless, there are actions executives can take to respond.

The 2021 labor mismatch has had a profound impact on US businesses

The United States’ post-COVID-19 economic recovery has seen an unusual reduction in labor-force participation. Jobs are available—the job-openings rate is around 50 percent above prepandemic levels—but the workforce to fill them has contracted. About four million people have left the civilian workforce (Exhibit 1).

With demand for workers exceeding supply, the cost of labor has increased accordingly. Private-sector nominal-wage growth is more than double the long-term pre-COVID-19 pace—more than triple when adjusted for the consumer price index (CPI). Transport and warehousing labor has been most affected in terms of cost, with wages increasing four times faster than before the pandemic.

Despite wage increases, logistics operations are still having difficulty hiring and retaining frontline workers, while also seeing increased absenteeism, causing knock-on effects across the supply chain. Suppliers’ on-time delivery rates are falling, a situation exacerbated by supply shortages. “On orders” are being cut at greater rates and experiencing significant delays, driving even further volatility in order patterns. Companies that employ third-party logistics services are also experiencing considerable challenges, such as transport rates increasing by up to 30 percent.

The labor mismatch is unlikely to dissipate on its own

What’s striking about the current labor challenge is that, unlike in the past, higher wages alone have not led to positions being filled. There are several underlying factors for this imbalance—some may be temporary, while others are long lasting. There are also regional differences, and in some cases labor availability varies significantly at different zip-code and skill-level combinations.

Some factors related to the COVID-19 pandemic are beginning to dissipate. For example, the federally enhanced unemployment-benefits program wound down in September. Workers who left their jobs because of health concerns or to take care of family members or children at home due to school or childcare-facility closures may return to work. 1 A McKinsey survey found that among respondents who had left their jobs, 45 percent cited the need to take care of family as an influential factor in their decision. See “ ‘Great Attrition’ or ‘Great Attraction’? The choice is yours ,” McKinsey Quarterly , September 8, 2021. And training programs that were suspended due to the pandemic, such as those provided by driving schools, have largely resumed.

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Other factors, however, could lead to more permanent shifts in the labor supply. The relationship between job openings and unemployment has departed from past trends and appears to be driven by fundamental shifts in labor supply-and-demand curves (Exhibit 2). Further evidence that the drop in labor-force participation is underpinned by systemic causes is the fact that the decline in labor supply can be seen across all worker types and demographics, including gender, age, marital status, and whether the person works part time or full time.

Furthermore, since the start of the pandemic, more than 15.9 million people have relocated within the United States. In the same time period, there has been a noticeable increase in the number of people taking early retirement, as 1.7 million workers retired from the labor force earlier than expected. 2 Owen Davis et al., “The pandemic retirement surge increased retirement inequality,” The New School Schwartz Center for Economic Policy Analysis, June 1, 2021, economicpolicyresearch.org. Immigration rates also have a lasting impact on labor supply, and the net immigration rate in the United States fell by 1.3 percent between 2020 and 2021. 3 “U.S. net migration rate 1950–2021,” United Nations World Population Prospects, accessed on November 2, 2021, macrotrends.net.

Last, a change in mindset toward work may also be an underlying factor of long-term shifts in labor supply. McKinsey research indicates a disconnect  between why employers think their staff are leaving and why employees are actually leaving their jobs. Employers are looking at transactional factors, such as compensation or alternative job offers, but these are not the primary drivers of attraction or attrition. Employees place greater value on relational elements, such as a sense of belonging or having caring and trusting teammates at work.

How COVID-19 is reshaping supply chains

There is also uncertainty over how supply-chain labor demand will continue to evolve. The growth in e-commerce, for example, has driven new demand for supply-chain labor that is likely to remain postpandemic. Recently signed infrastructure legislation is projected to further increase labor demand: industries within the construction value chain are likely to require an additional one million workers if the projected 30 percent of Infrastructure Investment and Jobs Act (IIJA) funds are spent by 2025. 4 Infrastructure Investment and Jobs Act draft, August 2021; EMSI; US Bureau of Labor Statistics. Since the logistics and construction industries typically attract similar pools of labor supply, the impact of such legislation would extend multiple years into the future. Additionally, the shift in consumer spending from services toward goods during the COVID-19 pandemic, which added supply-chain pressure to refill fast-selling products, may also stick.

Several industries are also experiencing drastic changes in demand. The travel and food-services industries, for example, saw severe demand drops and responded by furloughing or laying off workers and accelerating early retirements. These measures may have contributed to structural shifts in the labor market for these industries. The trucking industry was facing falling numbers of drivers before the pandemic because of multiple factors, including generational demographics, age limits, time away from home, and drug tests. The pandemic compounded the problem: on one hand, more people ordered goods to their homes, which changed how the deliveries were made and further increased the demand for truck drivers—and on the other, the closure of truck-driving schools, combined with a pull of labor supply away from driving toward construction, reduced the supply of labor.

A meaningful intervention for the mismatch

Together, these factors mean that the labor mismatch in US supply chains is unlikely to dissipate quickly, with imbalances in supply and demand persisting. So what can companies do to address this imbalance now? In this unprecedented environment, companies may have to look beyond the traditional levers of recruitment and retention, and also implement a comprehensive set of coordinated actions to address the labor shortage. For interventions to be meaningful, they need to address the full value chain.

This seems challenging, but there are reasons to be optimistic. Companies are seeing meaningful shifts in their labor-supply profiles by taking the following steps.

Ensuring viability of the supplier base. Companies can engage suppliers with large labor forces—for example, temporary labor, food services, janitorial services, and third-party transportation—to ensure operational viability or identify alternative suppliers that can reduce first- and second-tier supplier risk.

Reimagining the job of a driver and warehouse worker

One logistics company used advanced analytics, including machine-learning techniques and web scraping more than 50,000 reviews, to identify causes of worker attrition among its drivers and distribution-center employees. It found that the physical nature of the job, lack of work–life balance, and scheduling issues were key drivers of attrition.

The company then designed a range of interventions to mitigate these issues, including a leadership training program for supervisors and managers to address frontline grievances. It also provided greater flexibility in scheduling and pay, and collaborated with customers to solve the root causes of employee-satisfaction problems—such as SKUs that were difficult to pick and deliveries that were scheduled for inconvenient times.

Finally, the company developed an implementation structure and stood up a project-management office to ensure that initiatives were successfully implemented. In distribution centers where changes had been implemented, worker retention improved by about 10 to 15 percent; the company sought to scale those gains across the organization.

Reimagine the employee value proposition—beyond wages. Companies that solved for competitive wages and built attractive value propositions for employees have found it easier to retain their workforces. In addition to proactively adjusting wages to stay ahead of competitors (especially in highly competitive markets), or embarking on aggressive recruitment campaigns, companies can deploy analytics to pinpoint drivers of attrition—and make bold changes where it matters most (see sidebar “Reimagining the job of a driver and warehouse worker”).

Create capability to identify the stressed nodes and adjust labor flows. Companies can take measures to shift network flow away from labor-stressed nodes, especially where labor supply varies across regions. For example, orders could be rerouted to other warehouses, or products could be manufactured in locations that are less stressed from a labor-supply standpoint. Reformulating or redesigning products can help as well by reducing the need for labor-constrained components and ingredients.

Increasing output by reducing complexity

A consumer-goods company was able to increase productivity by cutting 30 percent of its product portfolio with limited impact on sales. It achieved this by defining the labor cost and complexity of each product, deploying advanced analytics to estimate the substitutability of each product, and conducting an assortment and optimization simulation to identify which SKUs to delist (exhibit).

Reduce complexity and labor content of products and services. Companies can reassess their product and service portfolios by building a robust understanding of each offering’s operational and commercial trade-offs. One company was able to increase throughput at its factories and warehouses by optimizing its product portfolio (see sidebar “Increasing output by reducing complexity”).

Explore lean management and automation. Companies may reduce reliance on labor across the supply chain over the long term through product reengineering, lean-management transformation, and automation. Furthermore, automation could help companies improve employee engagement and satisfaction. More than 40 percent of employees spend at least a quarter of their time performing manual and repetitive tasks. In some cases, automation can help not just reduce labor demand, but also allow employees to spend more of their time on higher-value, meaningful work.

Engage customers and suppliers on cost and service. Companies can engage customers on value-based offerings. They can also engage suppliers through cleansheet—based negotiations that build in complete cost-to-serve estimates, such as cost differences for labor-intensive activities, and service factors such as lead times and delivery windows.

Unlock new sources of labor supply. Companies can explore new sources of labor supply—for example prison-, juvenile-, or veteran-transition programs—or adapt roles for non-English speakers and reskill workers from declining industries or roles.

Bolster HR processes. They can also streamline and strengthen interview and onboarding processes—for example, by setting up “talent war rooms” to focus on such interventions.

Leveraging people analytics to improve frontline retention

A trucking company successfully deployed people analytics to improve frontline retention. First, it identified the top quartile of drivers who were most likely to leave the company. Analysis of this high-risk population allowed the company to identify the key drivers of employee dissatisfaction and implement targeted interventions. These interventions led to an improvement of more than 20 percent in new-driver retention, a 15 percent increase in the number of driver applications, and a more than 30 percent increase in the number of new hires, which translated to a 10 percent-plus increase in revenue potential (exhibit).

Deploy advanced people analytics. Companies can leverage people analytics, such as cluster analytics and attribution models, on internal and external data to identify and prioritize interventions on segmented groups of the labor force (see sidebar “Leveraging people analytics to improve frontline retention”).

Develop agile management across functions. Companies can deploy digital performance-management tools, such as control towers, to manage labor flows. Daily cross-functional war rooms can increase visibility around labor availability and help the organization to plan and adjust accordingly.

The labor mismatch is a complex challenge, one that may be here to stay for a while—and it is clear there is no silver-bullet solution.

The labor mismatch is a complex challenge, one that may be here to stay for a while—and it is clear there is no silver-bullet solution. Companies looking to embark on a labor-resilience transformation can take the following three steps. First, employers need to understand how labor shortages impact their suppliers, internal labor, and customers—starting with the size and impact of labor risk across operations; the severity of the labor gap by location, roles, and suppliers; and a forecast of labor dynamics in each relevant market. Second, companies could design bold interventions that structurally change both the demand and supply of the organization’s labor. Third, companies may require strong executive-level support to ensure that cross-functional initiatives are implemented effectively.

Dilip Bhattacharjee and Andrew Curley are partners in McKinsey’s Chicago office; Felipe Bustamante is an associate partner in the Miami office, where Fernando Perez is a partner.

The authors wish to thank Aditi Brodie, Mike Doheny, Travis Fagan, Ezra Greenberg, Darren Rivas, and Daniel Swan for their contributions to this article.

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27 Essential Employee Recognition Statistics [2023]: Need To Know Facts For Managers And HR

• Time Management Statistics
• Employee Wellness Statistics
• Employment Discrimination Statistics
• Employee Recognition Statistics
• Employee Referral Statistics
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Research Summary. Almost everyone wants to be recognized for their work, whether they get paid to do it or not. Because of this, companies are realizing that recognizing employees is a vital part of keeping their workers happy, productive, and committed to the organization. Here are the key statistics on employee recognition:

29% of employees haven’t received recognition for good work in over a year, if at all.

80% of employees would work harder if they felt better appreciated.

Strong employee recognition programs reduce turnover rates by 31%.

Employees who are recognized are almost six times more likely to stay at their jobs than those who aren’t.

37% of employees report that the best way to improve their engagement is for their superiors to give them recognition.

92% of employees are likely to repeat a specific action if given recognition for it.

General Employee Recognition Statistics

37% of employees report that employee recognition is the most important thing their manager or company can do to motivate them to produce great work.

Recognition is by far the most popular motivator to do great work that employees listed, and it is followed by 13% of employees saying they are self-motivated, 12% saying they need inspiration to do great work, and 12% saying that autonomy is their biggest motivator.

80% of employees say they’re motivated to work harder when they’re recognized for their work by their superiors.

Employees who think they’ll be recognized are 2.7 times more likely to have a high engagement at work.

Employee Recognition Statistics By Retention

44% of surveyed employees who said they were planning to leave their jobs cited a lack of recognition as their main reason.

69% of employees planning to quit their jobs said that receiving recognition and rewards would cause them to choose to stay at their current positions.

A lack of recognition is the number three reason why employees leave their jobs.

Employees who don’t feel recognized are five times more likely to say they’re “extremely likely” to look for work elsewhere than employees who feel recognized.

Employee Recognition Statistics By Employee Opinions

Employees who feel recognized at work are 2.6 times more likely to say that they believe promotions at their workplace are fair.

39% of surveyed employees say they aren’t recognized enough at work.

29% of employees say they don’t receive recognition for their work.

Over a quarter of employees haven’t been recognized for their work, and 17% say they receive it annually, which isn’t much better.

20% say they’re recognized quarterly, 11% say they receive recognition weekly, and 2% say they do daily.

28% of employees say recognition from their manager is the most memorable.

This is followed by 24% who say the same about the recognition from a high-level company leader or CEO and 12% who say that from their manager ’s manager. Others say their most memorable recognition came from a customer (10%), their peers (12%), or another source altogether (17%).

Employee Recognition Statistics By Employer Benefits

The top 20% of companies that have strong cultures of employee recognition have 31% lower voluntary turnover rates than their competitors.

Just improving recognition by 15% in a company can increase its margins by 2%.

Organizations with employee recognition programs see employee performance, engagement, and productivity increase by 14% more than those that don’t have these programs.

Happy workers are 13% more productive than unhappy workers.

Companies with good employee recognition strategies are 48% more likely to have high employee engagement rates.

Employee Recognition Statistics By Methods

On average, companies budget 2% of payroll for employee recognition and reward programs.

Annually, businesses spend about $3.25 billion on merchandise for employees.

Tenure-based recognition makes up 87% of companies’ recognition programs.

65% of employees prefer non-cash incentives from their employers.

It should be noted that these employees answered this way when their incentives and awards were personally meaningful to them, so they aren’t just saying that they would rather have a $50 Bluetooth speaker than $50 in cash.

46% of employees say that an unexpected reward like a snack, lunch, or thank you note from their bosses would make them feel more appreciated.

Employee Recognition Statistics FAQs

What percentage of employees feel recognized at work?

60% of employees feel recognized at work. Of these, 15% say they’re recognized almost frequently enough, 42% say they’re recognized just the right amount, and 3% say they’re recognized too frequently.

Even though 60% is more than half of all employees, just 45% say they feel they’ve received enough or too much recognition from their workplaces . This is too low, especially since such a large percentage of employees don’t feel recognized.

For employers who are worried about going overboard with their recognition efforts, having just 3% of employees think that you do too much to recognize their work is a fair price to pay for having the remaining 97% feel appreciated and motivated to do more good work.

How do you measure employee recognition?

You measure employee recognition by asking employees if they feel recognized. While you can measure some amount of employee recognition by looking at how many programs the company has in place to show appreciation to its employees, those numbers don’t matter if the employees still feel unseen.

A company could spend millions on gifts, parties, and awards for its employees, and while that is a measure of how seriously the company takes employee recognition, it doesn’t do any good if employees don’t feel recognized and appreciated.

What percentage of companies have recognition programs?

80% of companies have recognition programs. The type of recognition these programs offer can vary greatly, as each company will recognize their employees for different actions and reward them in different ways.

For example, 87% of recognition programs involve rewarding employees for tenure. Others recognize employees for innovation, excellent work, or breaking records.

Why is employee recognition important?

Employee recognition is important because it helps employees feel valued, increasing engagement and productivity and decreasing voluntary turnover.

Companies in the top 20% of those with strong employee recognition programs have voluntary turnover rates that are 31% lower than their competitors’. In addition, companies that have these programs in any capacity often see employee performance , engagement, and productivity go up by 14%.

Even a little effort in this area goes a long way, as companies that improve their recognition efforts by 15% often see their margins increase by 2%.

Do employee recognition programs work?

Yes, employee recognition programs work. Companies that have these programs see employee performance, engagement, and productivity rates that are 14% higher than those in companies that don’t have recognition programs.

However, it’s important that these programs recognize employees in a way that is meaningful to them. Otherwise, they won’t have much of an impact.

For example, many employee recognition programs give out cash rewards to their workers, but in reality, 65% of employees would rather have a personalized, non-cash award instead.

Note that personalized doesn’t necessarily mean getting a Bluetooth speaker with their name on it instead of a plain one, but it does mean finding something that they’d personally enjoy and presenting it to them in a meaningful way.

How does employee recognition affect productivity?

Employee recognition affects productivity by increasing it. Companies that recognize their employees see productivity, performance, and engagement levels 14% higher than their competitors, who don’t have employee recognition programs.

Companies often forget to recognize their employees’ efforts, as 29% of employees say they haven’t received recognition for good work in over a year, if at all. By not making an effort to recognize their employees, companies are harming themselves more than they might think.

Those with employee recognition programs see employee productivity, engagement, and performance go up, and voluntary turnover rates go down.

Employees themselves admit that they do better work when they receive recognition, as 80% say they work harder and 37% say they produce better work when they know their superiors will recognize their efforts.

Haiilo. “ 8 Employee Engagement Statistics You Need To Know in 2022 [Infographic]. ” Accessed on March 15, 2022.

Great Place To Work. “ Creating a Culture of Recognition. ” Accessed on March 15, 2022.

HuffPost. “ Appreciation Motivates Employees To Work Harder, Study Says. ” Accessed on March 15, 2022.

Quantum Workplace. “ What are the Top Drivers of Employee Engagement? ” Accessed on March 15, 2022.

Achievers. “ Achievers Survey Finds Without Recognition, Expect Employee Attrition in 2018. ” Accessed on March 15, 2022.

15Five. “ Top 10 Reasons Why Employees Leave Their Jobs (Infographic). ” Accessed on March 15, 2022.

SurveyMonkey. “ Can Employee Recognition Help You Keep Them Longer? ” Accessed on March 15, 2022.

Authentic Recognition. “ How Frequently Should You Give Recognition? ” Accessed on March 15, 2022.

Gallup. “ Employee Recognition: Low Cost, High Impact. ” Accessed on March 15, 2022.

Forbes. “ New Research Unlocks the Secret of Employee Recognition. ” Accessed on March 15, 2022.

Deloitte. “ Recognition Programmes: Are They Important? ” Accessed on March 15, 2022.

University of Oxford. “ Happy Workers are 13% More Productive. ” Accessed on March 15, 2022.

Jostle. “ Improve Employee Engagement Using Recognition and Reward. ” Accessed on March 15, 2022.

Incentra. “ Budgeting for Employee Engagement and Recognition Programs. ” Accessed on March 15, 2022.

Statista. “ Annual Spend on Incentives by Businesses in the United States as of December 2015, by Business Sector and Type. ” Accessed on March 15, 2022.

Northstar Meetings Group. “ Cash Isn’t King: A Major Study Conducted by the IMA and IRF Refutes Myth That Cash is the Number One Motivator. ” Accessed on March 15, 2022.

Jobs in employee recognition statistics

Zippia ’s research team connects data from disparate sources to break down statistics at the job and industry levels. Below you can dig deeper into the data on people who work to promote employee recognition or browse through Community and Social Services jobs .

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Abby is a writer who is passionate about the power of story. Whether it’s communicating complicated topics in a clear way or helping readers connect with another person or place from the comfort of their couch. Abby attended Oral Roberts University in Tulsa, Oklahoma, where she earned a degree in writing with concentrations in journalism and business.

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