Your Guide to Retaining Employees and Reducing Turnover in 2024

How do you retain employees in 2024? Remember, employee retention efforts include all of an organisation’s policies and practices designed to encourage employees to remain with the company. The problem is that keeping employees happy is a moving target that’s hard to define from one day to the next—and can change significantly over a year.

That’s why most HR leaders think of retention as more than just policy—but instead as everything that goes into creating a thriving culture where employees want to stay.

As the research arm of our employee recognition company, the O.C. Tanner Institute constantly conducts and analyzes primary research on workplace culture around the world, including best practices for keeping employees happy, engaged, productive, and valued. Their 2024 Global Culture Report examines new workplace trends as well as the latest challenges and opportunities organisations face. In this article, we distill some of those findings into seven key people strategies.

By directly tackling these new challenges and improving the employee experience across an organisation, leaders can fine tune their efforts to create workplace cultures where employees want to stay and reduce employee turnover.

What is the impact of high turnover on companies?

Although a certain amount of turnover is a reality for all organisations, an unnecessarily high turnover rate can cost organisations in several ways.

The most immediate impact of turnover is that human resources teams must spend additional time and money on the hiring process to replace those employees walking out the door. Even more critical, high numbers of employees leaving can negatively impact employee morale and productivity—as well as damaging the organisation’s reputation with both customers and potential employees.

Ultimately, high turnover hurts business performance. In a discussion with McKinsey & Company, Zynep Ton discusses ideas from her book, The Case for Good Jobs: How Great Companies Bring Dignity, Pay, and Meaning to Everyone’s Work. She notes how companies that choose to operate with higher turnover rates can experience operational problems, customer service issues, lower productivity, and reduced sales. In short, they may pay less to acquire their employees, but they sacrifice the greater performance and long-term value that comes with investing in more experienced workers.

The alternative, Ton points out, is to see people as drivers of value, profit, and customer service—not just a cost to be minimized. Companies who choose this approach may spend more for talent, but in turn will generate more valuable work—which ultimately more than pays for the added investment.

What factors impact employee retention?

You’ll find many well-documented reasons employees choose to leave. Some of the root causes include poor management, lack of job advancement, and a deteriorating work-life balance. Conversely, the factors that influence employees to stay include feelings of belonging, greater connection, and autonomy. These traits can help build a positive workforce culture and reduce turnover.

More than pay and benefits, employee retention strategies should include modern leadership, development opportunities, mental health support, and giving employees a say on how and where they work. Even physical factors, like the work environment and technologies a company chooses can affect whether employees will want to stay long term.

Curious how workplace flexibility and practical empathy impact retention? See what the latest research says in our 2024 Global Culture Report.

7 people strategies for improving company culture and reducing turnover

In the face of a complicated HR landscape, companies are looking to create workplaces where all employees can thrive. This requires taking the pulse of employee experiences and fine tuning culture initiatives as needed.

For a deeper dive into this data, watch our on-demand webinar, 5 Culture Trends for 2024.

Following are specific findings from our report and the people strategies organisations can focus on to help create and sustain cultures where people want to work.

1. Embrace people-centered change

Traditional change management practices, which tend to be linear, top-down, and process-oriented, no longer fit our evolving work environments. Instead, adequate support and genuine communication are the most impactful factors in building a people-centered approach to Embracing Change. 

When employees feel seen and valued, they are more confident in change. In fact, 92% of employees at organisations with a company culture of integrated recognition believe change in general to be positive. Additionally, those employees are 18x more likely to say they hope to be at their organisation in a year, and 5x more likely to say they plan to stay for at least 3 more years.

Helping employees embrace long-term business decisions, which leads to retaining employees longer, is easier when an organisation relies on a foundation of people-centered change.

2. Show practical empathy

The 2024 Global Culture Report uncovered a handful of ways to make empathy more potent, less painful, and in a single word, practical. We found that not only does Practical Empathy increase employees’ sense of belonging and connection, it improves business outcomes like attracting and retaining talent.

Empathy goes a long way in motivating employees to stay loyal. In fact, employees picture themselves staying 2.5 years longer at their organisation when their leader is empathetic. 

But practical empathy includes more than understanding, it also involves setting boundaries and defining responsibilities for both the leader and the employee. One-to-one meetings are ideal to facilitate conversations about expressing empathy, and establishing responsibilities.

When employees feel both their leader and the overall organisation are empathetic, they:

• Feel more seen and valued (+64%)
• Feel more fulfilled at work (+40%)
• Are more satisfied with workplace culture (+40%)
• Want to stay longer (+3 years)

3. Help all of your employees feel seen

A large majority of the world’s workers, what we call the 80%, feel overlooked and underappreciated. These employees are the offline, frontline, and other workers who find themselves in work environments detached from mainstream corporate culture. About half of these people feel their organisation treats them as expendable. They also lack connection and a sense of community, which can lead to feeling unfulfilled in their work.

It’s no surprise that companies find it increasingly difficult to retain employees in this group. Many employees leave for jobs where they feel more valued. Forbes reports turnover rates up to 500% per year. But just as harmful, the employees who do stay due to financial constraints or lack of training or opportunity feel more demoralized, resigned, and unfulfilled in their work.

Get more strategies for supporting your offline, deskless, and frontline workers in this on-demand webinar featuring O.C. Tanner Institute researchers. 

4. Create an environment that’s flexible, but fair

Although the employee experience has never been more flexible, the next step is making it fair. Companies that offer more flexibility get loyalty and better work outcomes in return. But to create a long-term work culture where people want to stay and thrive, that flexibility must remain equitable. 

Research on Equitable Flexibility revealed workplace flexibility that appears unfair can be damaging to key cultural outcomes, leading to burnout and reduced job satisfaction. The bottom line? Giving employees flexibility in when, where, and how they work will help them feel engaged and want to stay with their organisation.

When they experience equitable flexibility, employees are:

• 385% more likely to be satisfied with their job
• 466% more likely to be satisfied with the employee experience
• 679% more likely to want to stay one more year

5. Promote skill building and development

How important is professional development in helping companies reduce employee turnover? Turns out it’s a significant factor. Studies on Cooperative Skill Building show organisations that don’t provide any type of skill building have 76% lower odds of building a thriving workplace culture, and 72% lower odds of employees saying they still want to work there in a year.

Opportunities to develop more skills lead to greater employee fulfillment—which is a good predictor of employee retention. When leaders support employee skill building, the odds of fulfillment are 4x better, and employees are 4x more likely to want to work at their organisation for another year.

6. Encourage employee resilience

Nimble Resilience is a shift in mindset—from seeing change and challenges as setbacks or crises to overcome, to viewing them as opportunities to innovate, evolve, and improve. It’s a chance to encourage employees to embrace change, collaborate, and practice cross-disciplinary thinking.

Positive business and cultural outcomes are dramatically higher at nimbly resilient organisations. Case in point: Employees’ odds of having a strong desire to stay for at least one year increase by 6x. Organisations must champion nimbly resilient leaders and practices like open communication, collaboration, flexibility, and autonomy.

7. Leverage your employee recognition program

Not surprisingly, a common element of cultures that feel supportive and genuine is an effective employee recognition program. And the fact that regular recognition can help retain employees longer is not lost on HR leaders.

Consider this striking statistic: When leaders do not effectively communicate accomplishments, employees are 74% less likely to stay at their organisation.

Read our Employee Recognition Guide to learn more about what it takes to build and launch a successful program.

What are successful companies doing to retain top talent?

Organisations can invest in various strategies to build workplace cultures where employees thrive and want to stay. In the article 12 companies workers don't want to leave, companies with high retention rates ranked high in five specific categories: company resilience, career growth, positive environment, business stability, and strong leadership.

DuPont, earning the top spot for the best employee retention, ranked highest in company resilience. Other organisations with low turnover rates stood out for having the best positive working environments—including Intel and American Express.

The article also noted that the companies who invest in talented people have done very well at keeping employees longer. For example, giants like Amazon and Cisco have succeeded in both attracting new hires as well as nurturing and developing existing talent over the years.

As noted earlier, companies that recognise their employees are better at retaining them. For example, Centra Health wanted a recognition solution that was meaningful and that provided consistency, flexibility, and choice. Partnering with O.C. Tanner, this healthcare organisation improved their program by infusing recognition throughout the employee experience—from onboarding processes, to leadership training, to major healthcare events. 

The results were impressive. Both informal recognition through eCards and formal recognition through nomination points made a significant impact on employee turnover. In fact, just a 1 unit increase in nominations received led to a 19% decrease in the odds of attrition.

1 unit increase in recognition led to a 19% decrease in the odds of attrition
—O.C. Tanner Institute

Create a culture where employees want to stay

As you develop strategies to reduce employee turnover, remember that the most powerful magnet for keeping your employees fulfilled and happy is a culture where employees feel they belong and can do their best work. Focus on efforts to refine your workplace culture and employee retention will follow.

To learn more about the workplace culture topics discussed in this article, read our in-depth findings in our Global Culture Report.

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Read more about how the Culture Cloud recognition platform can help your people thrive and want to stay with your organisation longer. Or request a demo today.