Effective strategies to strengthen employee retention

What is employee retention?

Employee retention is an organisation’s ability to keep its employees over time. It is often measured as the share of employees who stay during a period, or the inverse as staff turnover. High retention lowers the cost of recruitment and onboarding and preserves knowledge and culture.

The most important drivers are leadership, development opportunities, competitive pay and benefits, flexibility, good onboarding and a culture where people feel seen.

Employee retention is a strategic investment that strengthens the whole organisation. By investing in retention, meaning measures that encourage employees to stay, you can prevent high staff turnover, strengthen your culture, improve productivity and reduce recruitment costs.

What is employee retention and why does it matter?

If employer branding is about attracting, recruiting and retaining people, employee retention is what you do to keep and engage employees over time. In practice, it means creating a workplace where people thrive, develop and see a long-term future. The goal is to reduce staff turnover, which is costly in time, money and productivity.

How to retain staff in today’s job market

By understanding what truly engages today’s employees and adapting your strategies, you can keep your best talent and position your company as an attractive employer, today and in the future.

Here are 7 effective strategies based on current trends and insights, drawing on Oddwork’s industry knowledge and client work as well as the Young Professional Attraction Index and Randstad Employer Brand Research.

1. Review your flexibility offer

Data from Randstad Employer Brand Research 2024 shows that work-life balance is one of the main reasons employees stay with an employer. Hybrid work has also become more common: 34% of Swedes now work in hybrid models, up from 27% the year before.

Strategy:

Flexibility is not only remote or hybrid work. Identify what your company can offer to create better balance, such as more flexible schedules, an exercise hour during working time or more freedom to plan your own work.

2. Communicate values and purpose

Working for a company whose values match your own is crucial for many, especially younger generations. Research shows it can even affect their willingness to work in the office.

Strategy:

Communicate your values clearly and make sure they are integrated into everything from onboarding to ongoing communication and workplace culture.

3. Invest in career development

59% of employees in Sweden say personal career development is important, slightly more for women (62%) than for men (57%). Limited development opportunities are also a common reason people leave.

Strategy:

Clarify individual development plans and career paths within the company. Offer internal and external training and encourage knowledge sharing in the team.

4. Reward and recognise performance

Attractive pay and benefits remain the most important factor for attracting and retaining talent in an uncertain market, and insufficient compensation is the main reason people leave.

Strategy:

Raising salaries in line with recent high inflation has been hard for many employers, but there are other ways to make people feel valued and supported financially, such as wellness allowances, breakfast at work or more remote work to cut travel costs. Highlighting non-financial rewards and internal career opportunities also boosts engagement.

5. Promote inclusion and fairness

Inclusion is a hygiene factor, and candidates expect equal opportunities regardless of gender, age or ethnicity. Fairness, previously called diversity and inclusion in Randstad’s survey, now ranks among the top priorities in the job market for the first time.

Strategy:

Train and work systematically on inclusion and implement policies so that every employee feels welcome, valued and included. Work actively with your employer brand so your communication is transparent and appeals to all the talent you want to attract.

6. Communicate stability in uncertain times

A job market marked by the pandemic, war and recession means candidates increasingly look for employers that offer security and stability.

Strategy:

Look at how you can meet the demand for stability and job security, for example by highlighting your long-term vision in internal and external channels, or offering incentives linked to savings and pensions.

7. Strengthen leadership

Leadership is central to wellbeing and motivation. Poor leadership ranks as one of the main reasons employees move on.

Strategy:

Invest in leadership development so managers have the tools to support their teams. Train managers in coaching leadership and create clear structures for regular feedback and dialogue.

Read more: Onboarding that prevents staff turnover. Want help strengthening retention through your employer brand? Get in touch.

Read also: What is eNPS? How to calculate, interpret and raise your score

FAQ

Frequently asked questions about employee retention

How do you calculate employee retention?

Employees at the end of the period, minus new hires during the period, divided by employees at the start of the period, times 100.

What is the difference between retention and turnover?

Retention measures how many stay. Turnover measures how many leave and are replaced.

How does retention relate to employer branding?

An EVP that matches reality attracts the right people from the start, and they stay longer.