How to improve employee retention and motivation: 10 easy steps to follow

Beyond the basic metrics of success, every thriving organization desires the dedication and enthusiasm of its employees. 

Statistically, according to Gallup, companies with high employee engagement levels report 21% and 17%  higher profitability and productivity, respectively. This highlights the important role that employee retention and motivation play in the modern workplace. 

Due to the direct impact these factors have on a company's success, touching on aspects like productivity and employee satisfaction, it's clear that fostering a motivated and committed workforce is more than just a task for HR. Still, it's a strategic business objective that requires thoughtful attention and action across all levels of leadership.

This article will cover the essential steps and strategies businesses should employ to enhance employee retention and motivation. 

Key takeaways

• Offering benefits that match or exceed industry standards, such as HSAs, FSAs, and lifestyle spending accounts, is crucial for attracting and retaining top talent.
• Promoting work-life balance through flexible working arrangements and respecting personal time improves employee satisfaction and retention.
• Clear leadership opportunities and career advancement paths motivate employees to stay and grow with the company.
• Actively seeking and acting upon employee feedback demonstrates respect and can lead to meaningful improvements in the workplace.
• Investing in employee development through courses and training opportunities keeps the workforce engaged and motivated.
• Open, transparent communication fosters a trusting environment, encouraging employee loyalty and motivation.
• A clear and comprehensive onboarding process is essential for integrating new hires into the company culture and setting them up for success.
• Fostering a strong sense of community within the workplace enhances employee loyalty and satisfaction.
• Ensuring that salaries are competitive and fair is crucial for motivating and retaining employees and acknowledging the value of their contributions.
• Flexible work arrangements cater to the modern workforce's demand for a better work-life balance, leading to higher job satisfaction and productivity.

Why your company should improve employee retention and motivation

A motivated workforce drives innovation, productivity, and customer satisfaction.

Conversely, high turnover rates can be a symptom of deeper issues within the company culture, affecting everything from team dynamics to the bottom line.

Let's delve into why prioritizing employee retention and motivation is a strategic imperative for your company.

Mitigate costs

One of the most immediate benefits of improving employee retention is the significant cost savings associated with reduced turnover. 

High turnover rates increase expenses in recruitment, hiring, and training new employees. 

The costs of advertising positions, interviewing candidates, and onboarding new hires can quickly add up, not to mention the hidden costs of lost knowledge and decreased productivity during transition periods. 

Also, considering the fact that the cost of replacing an individual employee can range from one-half to two times the employee's annual salary is a considerable expense for any organization.  

Impact on team performance

Employee retention and motivation are closely linked to team performance. A stable and engaged team is more likely to collaborate effectively, share knowledge, and support one another, enhancing productivity and innovation. 

Motivated employees are also more invested in their work and the company's success, which translates into higher-quality output and better customer service. 

In contrast, a demotivated workforce can lead to disengagement, where employees do the bare minimum, impacting the team's overall performance.

Avoid frustration and conflict

High levels of employee turnover can lead to frustration and conflict among remaining staff, who may feel overburdened by additional responsibilities or unsettled by constant changes in team dynamics. 

However, focusing on retention and motivation helps build a sense of stability and loyalty, fostering a workplace culture where employees feel valued and supported. 

This reduces the likelihood of conflicts and encourages open communication and collaboration.

Enhance company reputation

A company known for its high retention rates and motivated workforce enhances its reputation among potential employees and within its industry and customer base. 

A positive workplace culture attracts top talent drawn to companies that invest in their employees' growth and well-being. 

Furthermore, satisfied and motivated employees are the best ambassadors for your brand, contributing to a positive public image that can attract new business and opportunities.

Boost innovation and creativity

Motivated employees are the driving force behind innovation and creativity. When individuals feel valued and supported, they are more likely to take calculated risks and propose new ideas. 

This culture of innovation leads to the development of new products and services and encourages continuous improvement in processes and operations, keeping the company competitive and forward-thinking.

10 steps to improve employee retention and motivation

Each step below contributes to a work environment where employees feel valued, supported, and part of a community, driving them to engage more deeply with their work and the organization.

1. Provide competitive benefits

The significance of offering competitive benefits cannot be overstated. According to a Glassdoor survey, nearly 60% of respondents indicated that benefits and perks are significant factors in their decision to accept a job offer. 

Competitive benefits are not just about health insurance and retirement plans anymore. 

Employees are increasingly looking for benefits that cater to their holistic well-being, including 

• Health Savings Accounts (HSAs) 
• Flexible Spending Accounts (FSAs) 
• Lifestyle Spending Accounts (LSAs)
• Comprehensive wellness programs

These benefits address employees' physical, financial, and mental wellness, contributing significantly to their overall job satisfaction.

Forma offers customizable benefits solutions that allow employees to choose the benefits that best fit their needs, from HSAs and FSAs to Lifestyle Spending Accounts. 

This level of personalization ensures that employees feel valued and understood, which is a powerful motivator for retention.

Ready to get started?<span class="text-style-link text-color-blue" fs-mirror click-element= "trigger" role="button">Schedule a consultation</span> with one of our experts to explore tailored solutions that align with your workforce's needs.

2. Build a work-life balance culture

The importance of work-life balance has been highlighted by a 2020 FlexJobs survey, where 75% of respondents reported experiencing burnout at work, with 40% citing occurrences during the pandemic. 

Creating a culture that promotes work-life balance is essential in mitigating these issues. 

Employers can encourage work-life balance by offering flexible working arrangements, such as telecommuting options and flexible hours, and by being mindful of employees' workloads to prevent burnout.

This approach supports employees' mental health and well-being and increases job satisfaction and loyalty.

3. Provide clear leadership opportunities

Employee motivation flourishes in an environment of encouraging tangible growth. Establish clear leadership paths within your organization, allowing employees to see a future in their roles. 

Offer mentorship programs, leadership training, and advancement opportunities that nurture their professional development and contribute to long-term retention. 

If you promote internally rather than hiring externally, it’s a great idea to let your employees know that promotions are on the table.

4. Ask employees what they need

Listening to employees is vital in creating a workplace that meets their needs and desires. Employers should regularly engage with their workforce through surveys, suggestion boxes, and feedback sessions to gather insights into their preferences and concerns. 

This feedback can then inform the development of policies and benefits that genuinely resonate with employees, such as flexible benefits packages, wellness programs, incentive programs, and employee recognition initiatives.

Forma supports this approach by offering flexible benefits tailored based on employee feedback, ensuring that the benefits package remains relevant and valued by the workforce.

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Also, you can realize the return on investment (ROI) of your tailored employee benefits by utilizing Forma’s benefit ROI calculator.

5. Invest in courses

The 2019 LinkedIn learning report states that 94% of employees would stay at a company longer if there were an investment in learning. This statistic indicates the importance of providing employees with continuous learning and development opportunities. 

Employers can facilitate this by offering access to online courses, organizing in-house training sessions, and providing financial support for professional development activities. 

These investments signal to employees that the company is committed to their growth and values their contributions, which in turn fosters a sense of loyalty and motivation.

6. Follow through on employee feedback

Collecting employee feedback and then not acting on it can severely ruin your company’s reputation in front of your employees. 

Acting on employee feedback shows employees that their insights lead to tangible changes. 

A culture that values and implements employee feedback demonstrates respect and appreciation for its workforce, fostering a sense of belonging and engagement. 

When employees see their suggestions taken seriously and leading to improvements, it reinforces their value to the organization and motivates them to contribute positively. 

Implementing changes based on feedback can range from adjusting work policies to enhancing office facilities or refining benefits packages. 

For instance, introducing or expanding remote work options can significantly boost morale and retention if employees desire more flexible working conditions.

7. Communicate effectively

Clear, open, and transparent communication from leadership about company goals, changes, and expectations helps employees feel informed and engaged. 

Regular updates, town hall meetings, and open-door policies foster a culture of trust and inclusivity. 

When well-informed employees feel their voices can be heard, they are more likely to be committed to the organization's success and feel motivated to contribute their best work.

8. Have a clear onboarding process

A structured onboarding process is crucial for setting employees up for success from their first day. A study by Glassdoor found that organizations with a robust onboarding process improve new hire retention by 82% and productivity by over 70%. 

A comprehensive onboarding program should introduce new employees to the company culture, expectations, and their role within the team, ensuring they have the tools and knowledge necessary to start contributing effectively. 

This initial investment in new employees lays the foundation for long-term engagement and satisfaction.

9. Work on sense of community

Fostering a strong sense of community within the workplace is vital for employee loyalty and satisfaction. 

Employees who feel connected to their colleagues and the company are more likely to be engaged and motivated. 

Building a community can involve team-building activities, company-wide events, or social groups that allow employees to interact beyond work-related tasks. 

These interactions help build relationships and a sense of belonging, making employees more resilient to challenges and more committed to the company's success. 

A strong community also supports a culture of mutual support and collaboration, key drivers of motivation and productivity.

Forma can play a vital role in building this community spirit through customizable recognition and rewards programs that celebrate employee milestones and achievements, directly contributing to a positive work environment.

10. Pay a fair salary

Competitive salaries and other financial benefits acknowledge the value of employees' work and contributions. 

While salary is not the only factor that motivates employees, it is a critical component of a comprehensive retention strategy. 

Ensuring that pay scales are transparent, equitable, and competitive within the industry helps attract and retain top talent.

Beyond the base salary, offering performance bonuses, profit sharing, and financial wellness programs like those provided by Forma can enhance the overall compensation package, making it more attractive and motivating for employees.

Each strategy, from valuing employee feedback to ensuring fair compensation, fosters a culture where employees feel valued, supported, and motivated to achieve their best.

How to motivate an overwhelmed employee

It's not uncommon for employees to feel overwhelmed by their workload, deadlines, or the pressures of balancing professional and personal responsibilities. 

Motivating an overwhelmed employee requires the following strategies:

Recognize the signs of overwhelm

The first step in addressing employee overwhelm is recognizing its signs. 

These can vary widely but often include a noticeable drop in productivity, missed deadlines, a decline in work quality, or changes in behavior, such as increased irritability or withdrawal from team interactions. 

Employees might also feel stuck or voice concerns about their workload directly. Being attuned to these signals allows managers to intervene early and provide the necessary support.

Open a dialogue

Once signs of overwhelm are identified, the next step is to open a dialogue with the affected employee. This conversation should be approached with empathy and understanding, creating a safe space for employees to share their feelings and concerns. 

Listening actively and validating their experiences is important, showing that the organization cares about their well-being. This dialogue can help uncover the root causes of overwhelm, whether related to workload, personal issues, or other stressors.

Prioritize and delegate tasks

Often, overwhelm can stem from an unmanageable workload or unclear priorities. 

Work with the employee to review their tasks and responsibilities, helping them to prioritize based on urgency and importance. This might involve delegating tasks to other team members, postponing non-critical deadlines, or identifying areas where processes can be streamlined. 

The goal is to make the workload more manageable, allowing employees to focus on high-priority tasks without feeling stretched too thin.

Offer flexibility

If possible, offer flexible working arrangements, such as remote work options, flexible hours, or the opportunity to take time off to recharge. 

A study by FlexJobs found that 85% of millennials would prefer to telecommute 100% of the time, highlighting the demand for flexibility in the workplace. This flexibility acknowledges that employees have lives outside of work and that supporting their work-life balance can improve mental health and productivity.

Provide resources and support

Ensure that employees have access to resources and support that can help them manage stress and workload. 

This might include training on time management or access to counseling services through an Employee Assistance Program (EAP). Encouraging these resources demonstrates the organization's commitment to employee well-being.

Encourage team support

Fostering a supportive team environment can also help alleviate feelings of overwhelm. Encourage team members to support each other through collaborative problem-solving, sharing workload, or simply offering a listening ear. 

A culture of mutual support strengthens team bonds and can make challenging times more manageable for everyone involved.

Recognize and reward efforts

Finally, recognizing and rewarding the efforts of employees working through periods of overwhelm can be incredibly motivating. Acknowledgment can take many forms, from verbal praise in team meetings to incentives and formal recognition programs. 

Celebrating small wins and progress can boost morale and motivation, reminding employees that their hard work is valued and appreciated.

Final thoughts

As we've explored, a well-crafted strategy that prioritizes your workforce's well-being and satisfaction safeguards against turnover and propels your company toward greater heights.

The role of competitive benefits, work-life balance, leadership opportunities, open communication, and continuous learning cannot be overstated. 

When seamlessly integrated, these factors form the bedrock of a thriving organizational culture, where employees are not just contributors but active participants in the journey toward success.

By adopting a proactive approach and implementing the strategies discussed, employers lay the groundwork for a workplace that cultivates loyalty, fosters innovation, and fuels sustained growth. 

The ripple effects of such efforts extend beyond mere statistics; they shape a company culture that attracts top talent, amplifies productivity, and fortifies the foundations of long-term success.

In this pursuit, we invite employers to explore Forma's suite of services, specializing in employee financial wellness and flexible benefits. 

Our solutions are designed to directly impact employee retention and motivation by alleviating financial stress and contributing to a more satisfied and engaged workforce.

Want to discover how our expertise aligns seamlessly with your commitment to a motivated, loyal, and empowered workforce? <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Schedule a consultation</span> with one of our experts.

How to improve employee retention and motivation: Frequently asked questions

How does salary affect employee motivation?

Salary and employee motivation share a complex relationship. While salary is a fundamental motivator and essential for meeting basic needs, its impact on motivation tends to follow the law of diminishing returns. Beyond a certain point, salary increases have a reduced effect on job satisfaction and motivation. Recognition, career development opportunities, work-life balance, and a positive work environment often significantly sustain long-term motivation. However, it's important to ensure that salaries are fair and competitive to prevent dissatisfaction and demotivation.

What are five actions you can take to increase the retention of employees?

To thrive in today's competitive landscape, businesses must offer comprehensive benefits, including flexible employee packages, retirement plans, and spending accounts, addressing diverse needs. Equally crucial is fostering a positive work environment characterized by respect, recognition, and inclusivity. Supporting continuous learning and providing clear advancement paths are essential for career development. Encouraging work-life balance through flexible working arrangements and valuing personal time, alongside maintaining regular, open communication about performance and career goals, is vital.

Can implementing flexible work arrangements improve employee retention and motivation?

Yes, implementing flexible work arrangements can significantly improve employee retention and motivation. The flexibility in work hours and location addresses the growing demand for a better work-life balance, which has become especially important in the modern workforce. This flexibility can increase job satisfaction by allowing employees to work in ways that best fit their personal lives and productivity styles. As a result, companies that offer flexible working arrangements often see lower turnover rates and higher levels of employee engagement and productivity.

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