5 reasons why employee retention is so important

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Employee retention 

War of talents - the employee market is making it increasingly difficult to identify qualified specialist personnel for vacant positions. The keyword here is employee retention. On the one hand, the company needs to find suitable talents or skilled employees. On the other hand, employee turnover must be prevented. The goal of retaining one's own loyal and suitable employees is an enormous challenge for HR managers and executives. But what motivates employees not to change their jobs? What do employers need to do to retain their key employees? Here you can find out everything you need to know about employee retention.

Definition of employee retention

The definition of employee retention is the degree of the relationship between employees and their employer that results in employees deciding to stay with their current job in the company for the long term. Effective recruiting is currently one of the most important fields of action and measures in HR and personnel management. Employees want to be valued and are happy to commit themselves to the company, provided they feel emotionally connected to the company. This leads to higher commitment, performance in the team, motivation, success and lower absenteeism among employees, which again has a positive effect on the fluctuation rate. So it's no wonder the topic is high on every company's agenda. Successful employee retention and an attractive employer brand save additional time and money since positions that are left usually take longer to be filled by new and qualified employees.

5 reasons why employee retention is so important:

  1. Turnover rate: strong employee retention leads to less loss of staff. They are less likely to leave the company due to retention.
  2. Creativity: Employees who feel connected to their company are more motivated to be creative and contribute their ideas to the company. The company can thus benefit from innovative approaches that can positively influence the company's success.
  3. Work performance: Employees who are satisfied with their jobs are more motivated to carry out their tasks, increasing their performance quality.
  4. Costs: Successful retention enables long-term cost savings as it retains existing and already trained staff. This avoids the costs associated with training and recruiting new team members.
  5. Company success: Strong staff retention leads to increased motivation of employees. They develop a higher willingness to perform, which in turn has a positive effect on corporate success.

Employee retention measures 

The benefits of successful retention of its employees are clearly visible: To ensure that employees and staff feel comfortable and enjoy going to work, the company should implement several vital measures for good employee retention. The goal is to optimize working conditions to increase employee motivation and satisfaction. As a result, employees perform their tasks more efficiently. Which employee retention measures are suitable depends on the individual employee. The crucial factor is that these measures are individually adjusted for employees. This creates a feeling of appreciation in all areas of the company. In addition to personal needs, most measures should also be implemented so that they are agreeable to the entire workforce. There is a list of employee retention measures, but not all are effective. We have compiled a list of what we consider to be the most important measures:

  • Development and advancement
  • Financial incentives
  • Work organization and attractive working environment
  • Company and culture

Employee retention tools 

Of course, it is almost impossible to implement all measures at work for every employee. Nevertheless, it should be the employer's goal to ensure a careful selection of the right tools. Companies should ask themselves which measures and factors are appropriate for employee retention. The company is best off thinking about this and taking the time to consider what its employees want in the company and what tools could motivate them. This does not always have to involve high costs. A cost-effective option could be honest communication, constructive feedback or a regular feedback culture. To ensure that the goals can be implemented, we provide some examples of tools within the measures mentioned above:

Development and advancement:

  • Advancement opportunities
  • Feedback from managers
  • Proper employee management
  • Promotion

Financial incentives:

  • Bonus payments
  • Attractive salary, vacation bonus, Christmas bonus
  • Salary increase
  • Vouchers such as meal and shopping vouchers

Work organization and attractive working environment:

  • Canteen / Cafeteria
  • Home office 
  • Flexible working models / working hours
  • Parental leave
  • Sabbatical year 
  • Part-time work
  • Basic catering such as drinks, fruit, coffee, etc.
  • Parking spaces for employees
  • Own office space
  • Company car
  • Company cell phone and work laptop

Company and culture:

  • Team Events
  • Work-life balance


Companies need to invest in employee retention. To counteract the employee market and employee turnover requires a clear strategy. The goal is to retain and keep employees. 

There are a variety of factors that can influence retention between employees and the company. This retention can be strengthened by setting clear goals, providing constructive feedback, and offering meaningful rewards. This creates an environment where employees develop a sense of belonging and a closer bond with their company.

Above all, regular positive feedback contributes to a positive employer image and thus also strengthens the retention between employees and the company. This is where the use of social recognition tools comes in. The platform encore is the solution for companies to communicate corporate values and exploit the full employee potential with the help of transparently communicated appreciation.

Ready to encore your people? - Try encore now with up to 5 users for free.

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