Building a team full of strong, dedicated employees is no easy feat. Moving individuals through your recruiting, hiring, and onboarding processes is hard, time-consuming, and pricey work. In fact, Glassdoor estimates that it costs the average American employer $4,000 and nearly a full month to hire a new employee.

However, hiring is only one half of the effort it takes to develop a stellar team. The other half is actually keeping them — a task that’s far more nebulous, and requires the effort of multiple departments across an organization.

With the United States experiencing record levels of resignations, a falling stock market, and rising levels of self-employment, retaining your best employees can seem like an uphill battle. But just because employee retention is getting harder doesn’t mean it’s impossible.

We chatted with Vimeo’s people operations team to outline nine ways organizations can improve employee retention and cultivate an engaged and long-lasting relationship with top talent.

What is employee retention?

For many organizations, employee turnover today is a virtual epidemic, with “quit rates” hitting a 20-year high in 2021. And while many employees go on to exciting new ventures when they resign, the companies that lose them end up spending considerable time, money, and effort hiring their replacements.

With the cost of employee turnover so high, it’s little wonder companies are focused on employee retention: an organization’s collective efforts to hold onto its talent. Employee retention tactics (which we’ll dive into below!) can include everything from increasing compensation to revamping your onboarding processes.

To measure how effective your employee retention efforts are, you can track your employee retention rate, or the percentage of employees who remain at your organization over a certain period of time (usually a year).

How to calculate employee retention rate

Employee retention rate = (Number of employees who remained employed over the measurement period / Number of employees employed at the start of the measurement period) * 100

Once you calculate your employee retention rate, you’ll want to compare it to the average retention rate for your industry, such as tech or hospitality. According to the Bureau of Labor Statistics, the average retention rate in 2021 was just 42.7 percent — but that number changes dramatically depending on the specific industry you zoom in on. 

Regardless of your industry, though, experts say aiming high is the name of the game when it comes to employee retention, while still allowing room for fluctuation based on the global context.

“Most companies, to be aggressive, want to go above 90 percent,” says Candace Williams, Head of Diversity, Equity, and Inclusion at Vimeo. “At Vimeo, we’re currently a little bit lower than 90 percent, but that ebbs and flows and is largely dependent on which department and business function we’re talking about. In the economy that we’re in today, and with COVID, companies have to understand that the data is changing.”

Understanding the current context can not only help explain fluctuating turnover rates, but it can also help you prioritize where to direct your retention efforts. And in 2022, there are plenty of factors at play.

The (increased) challenge of retaining talent in 2022

If your employee retention rate tanked last year, first off, know you’re not alone. According to a WTW survey, the number of organizations who reported difficulties in retaining employees increased fourfold in 2021. However, if you haven’t plugged the holes in your leaky ship, now is the time, as Gartner suggests employee retention will continue to be a problem well into 2022.

“New employee expectations, and the availability of hybrid arrangements, will continue to fuel the rise in attrition,” Piers Hudson, senior director of Gartner HR, told Gartner. “An individual organization with a turnover rate of 20 percent before the pandemic could face a turnover rate as high as 24 percent in 2022 and the years to come. For example, a workforce of 25,000 employees would need to prepare for an additional 1,000 voluntary departures.”

Many factors have come to influence “The Great Resignation,” as the media has now dubbed the current employee churn. The pandemic that hit in March 2020 was certainly one factor: with children staying home full-time and caretaking needs skyrocketing, COVID-19 forced many women out of the workforce. Laid-off employees also flocked to self-employment and freelancing in droves during the pandemic. And when offices began re-opening, many employees — having gained back hours in their day while working remotely — quit rather than returning to full-time in-office work.

The initial turnover caused by the factors above also forced many companies to increase their salaries, improve benefits, and prioritize diversity, equity, and inclusion (DEI) in a bid to attract new employees. The increased competition among companies led to even more job-hopping as employees chased better working conditions. Like a rising tide, these shifts have forced all companies to commit to employee retention.

“I like to change ‘the Great Resignation’ to ‘the Great Retention,’” says Williams. “Because people are leaving for certain reasons. So what are you going to do to keep them from leaving?”

With that re-frame in mind, let’s dive into nine ways you can hold on to your top talent.

9 ways to improve employee retention

Revisit your compensation philosophy

Employees join companies for far more reasons than simply to get paid. However, compensation remains one of the most important reasons. Perhaps unsurprisingly, more than half of employees say that a pay raise would be enough to motivate them to switch jobs.

To keep compensation from being a reason why people leave your company, experts suggest salary benchmarking, where you compare employees’ salaries to those of other companies in your industry. If your salaries are below average, most other companies’ offers will seem appealing to your employees. If you can, bump compensation above market rate, and ensure you’re tackling the subject of salaries proactively with your employees. (Don’t forget: compensation also includes benefits and any equity packages.)

“I see a lot of companies who have compensation policies that are below market and just unrealistic,” says David Connors, CEO of recruiting software company The Swarm. “Treat your people well. It’s such a great investment, and the number of companies that I’ve seen be successful for holding the purse strings really tight is very, very low versus the ones that have been really generous with investing in their people.”

Increasing wages can be scary, especially in a down market. However, remember that employee turnover comes with its own high costs: according to Gallup, the average cost of replacing an employee can range from 50% to 300% of their annual salary. And that’s just the measurable cost: the constant loss of team members can also damage team morale, set back projects, and break down customer relationships.

Focus on equity and diversity

In a 2021 study, Momentive found that an individual’s level of job satisfaction is directly tied to how much they feel their company prioritizes diversity and inclusion.

For some, that correlation doesn’t come as a surprise. 

“People always look at diversity as, ‘Okay, we’re gonna check the box. We’ve hired this amount of BIPOC employees, we’ve hired this amount of Asian Pacific folks, we’ve hired this amount of Latinas,’ and so on and so forth. But it’s much bigger than that,” says Williams. “People need psychological safety at work, and they need the ability to connect to people who look like them.”

According to Williams, integrating DEI across your company means ensuring people of all backgrounds feel supported, safe, and included at your company, from the moment they land on your Careers page to their final exit interview.

That means asking yourself:

  • Are there diverse communities for people to belong to at work?
  • How do we show up for our employees when they’ve experienced a personal or community tragedy?
  • How do we make our company a place where everyone can voice their concerns freely?
  • Do our benefits support all of our employees’ unique needs?
  • How do we ensure those with busier personal lives don’t lose out on work opportunities?

Embrace flexible work arrangements

When COVID-19 hit and companies moved fully remote, work-life balance suddenly became more achievable for many. Individuals were able to care for their children and parents, and they had time to look after their own physical and mental health. Now that offices can open again more safely, many employees don’t want to lose that flexibility.

“We heard loud and clear from our employees that flexibility was the thing they cared about most,” says Crystal Boysen, Chief People Officer at Vimeo. “So over the last few years, we’ve become a lot more intentional about how we approach working.”

Vimeo is now home to three types of roles: one that’s 100% in-office, one that’s 100% remote, and a third, hybrid role that allows employees to switch things up as they please. And with each type of role, we’ve had to craft a specific work environment that works to support employees.

“If a company has more than one work mode, it’s essential to consider each work mode ‘persona’ and how we’re creating a positive experience for each,” says Alissa Conway, Vice President of Employee Experience and Innovation at Vimeo.

Conway also emphasizes the importance of articulating and organization’s value proposition and making sure it aligns with employees’ current experience.

“Senior leadership should be able to answer the question, ‘What makes our company a great place to work and what is our value proposition for candidates? Does that match what internal employees are experiencing? If not, how can we improve the experience to make it what we want it to be?’”

Improve your onboarding and orientation processes

Consider your onboarding and orientation process new employees’ first impression of your company. While everyone wants new hires to feel welcomed and well-prepared in their first few weeks, too many onboarding approaches leave individuals feeling overwhelmed and isolated.

To improve retention, review your current onboarding and orientation processes from the perspective of new hires.

Ask yourself:

  • Are they receiving the information they need?
  • Are they getting to know the team members they’ll work with?
  • Do they have access to the tools and data they’ll need, along with training on how to use everything?
  • Do they have a point person they can go to for support?
  • How supported and celebrated does a new employee feel?

It can help to survey new employees as their onboarding and orientation wraps up, to understand what you’re doing well and where your gaps are.

For example, using a corporate training video template can help HR leaders quickly build engaging, and on-brand trainings for new hires.

Train people managers

An employee’s manager is often the first person they will go to for guidance, feedback, or direction. And yet, many managers haven’t actually been explicitly trained in how to manage individuals.

“A lot of times, team members leave companies because of managers, not because of their job,” says Williams. “If people don’t feel safe speaking up about issues or concerns to their managers, you lose that talent. They say, ‘Okay, let me go to a company where I know that my voice won’t be silenced or I won’t feel scared.’”

Often, individuals get promoted into people management roles because they’ve excelled as individual contributors not because they have the people management skills needed to manage a team effectively. There’s nothing wrong with that, of course, but it does mean that managers need management training.

A strong manager should create a psychologically safe environment for their team, support their professional development goals, elevate their voices, give them recognition, and help them refine their skills. Teaching managers how to cultivate that work environment — both in-office and remotely — needs to be part of an organization’s ongoing efforts to increase employee retention.

Develop a culture of continuous learning

According to Deloitte, companies with strong learning cultures tend to see employee engagement and retention rates that are 30 to 50 percent higher than those of organizations that don’t focus on learning and development.

“Engagement is the biggest factor in retention,” says Conway. “The more engaged team members are, the better their work product is, the more productive they are, and the more committed they are to the organization.”

Fortunately, there are many ways that you can cultivate a learning culture, including:

  • Giving employees a dedicated budget (and plenty of time) for conferences, books, and other professional development
  • Investing in a formalized mentorship program (for support, consider using a platform like Ten Thousand Coffees)
  • Hosting monthly lunch and learns
  • Offering employees career coaching, whether internally or through a program like Ezra Coaching

Give employees actionable feedback

Part of your responsibility, when building a culture of continuous learning, is to ensure employees are getting the kind of feedback that engages them, motivates them, and helps them learn.

To give employees actionable feedback, start by making sure they feel comfortable.

“It’s all about being respectful and managing how you provide guidance and direction,” says Dan Brooks, VP of Creative and Brand at Vimeo. “There are ways of phrasing feedback.”

Rather than being too directive, Brooks suggests asking questions that can spark learning in your team member and make the review process more collaborative. Give context as to why you’re suggesting certain approaches, and make sure that your feedback remains focused on actionable tasks (rather than general ideas).

Communicate company-wide

It can be easy for siloes to develop across companies, especially when you’re working within a remote or hybrid environment. Working in silos, however, often has a highly detrimental effect on employee morale, as being disconnected from the larger team can make employees feel isolated and disconnected from the impact of their work.

This was something Vimeo noticed among its own teams when we went remote at the start of COVID-19: as people were more physically distant, there was an increased need for company-wide communication.

“How we work together had to shift significantly,” Boysen says. “So we increased the frequency of our global communication so people could get on the same page more consistently.”

Help employees stay connected by hosting virtual, interactive town halls, creating and maintaining a company-wide knowledge base, and sharing project visibility across teams.

Recognize your employees — loudly

According to a 2019 survey by Achievers, employees state a lack of recognition as one of the top three reasons they start job searching. On top of that, over 80 percent of employees say they received more recognition at work. That’s a lot of people feeling underappreciated.

Fortunately, it’s easy to start acknowledging teammates’ contributions at work — you just need to start setting up the channels for it to happen.

  • Create a “kudos” Slack channel where individuals can acknowledge coworkers’ work or give them a shout out.
  • During town halls or updates, let team members who have owned certain projects present their own work.
  • Acknowledge employees’ specific contributions during one-on-one meetings.

Retain your top talent in 2022 and beyond

Clearly, there’s no one single solution that will increase your employee retention — but that just means you have multiple ways to hold onto your top talent. Next, find out how you can keep employees engaged and motivated at work from day one and for more resources on remote and hybrid work, check out Vimeo’s guide on how to engage your remote workforce.

Download Vimeo’s Guide on How to Engage Your Hybrid Workforce