September 3, 2020    |    By

As important as it is to have a good recruitment strategy in place, keeping the employees you have is just as important, if not more so. When an employee leaves, it can cause a lot of issues, especially if the timing of their departure isn’t ideal. Not only do you have to replace that employee, but it can disrupt certain projects or processes that can put your business behind schedule. The more often this happens, the more your company will be affected, which is why employee retention is so important.

Fortunately, there are plenty of things that you can do to keep your employees. However, arguably the most important thing you can do is to create a strong company culture. Poor company culture can affect the happiness of your employees, which can lead them to leave the moment a new opportunity comes along. If your company culture is particularly poor, don’t be surprised if employees jump ship even if they’re taking a pay cut.

Improving company culture is the first step towards improving your employee retention rate.

Why is it Important to Retain Employees?

Start by understanding precisely why retaining current employees is so important. Some companies know that there are plenty of candidates that they can source to fill any position at their company. But having to replace employees is never ideal. Here’s why it’s better to invest in employee retention than it is to replace employees that leave.

Cost to Recruit And Retrain Is High

The cost of replacing an employee is a lot higher than you might think. It’s not just a matter of matching the same salary and benefits of the employee that you’re replacing. It costs money and time to recruit new candidates. In fact, the entire hiring process can be quite costly to find the right candidate. Once you do hire a new employee, it will cost you money to train that recruit and integrate them into your company. According to one study, the average cost of replacing an employee who left tends to be around one-third of that employee’s annual salary. That adds up if you consistently have to replace employees every year.

The Effect of an Employee Leaving on Others’ Morale

Who your employees work with matters. Your employees develop working relationships that strengthen over time. The better your employees work with one another, the better your work environment is to work in. It improves morale, which improves productivity. If employees keep leaving, those who remain will have to build new relationships with new employees. Constantly having to get used to new coworkers will upset the morale of your remaining employees. Stability is important.

The Potential Knowledge Capital Losses to The Company

The longer that your employees work at your company, the more responsible you are for the development of their skills and for the experience that they have obtained. This is especially true if you provided them with a variety of training opportunities. If they leave, you’ve essentially invested in their growth on behalf of whatever company they end up going to.

Employees also have detailed knowledge of your company and its processes. This is a valuable potential knowledge capital that can’t be immediately replaced.

Why do Employees Leave?

Discovering why your employees are leaving is a pretty important step towards improving your employee retention. There are many reasons why an employee may choose to leave your company; however, these are some of the most common reasons:

Low Employee Morale

Employees who have low morale won’t be happy at their jobs, which can affect their personal lives as well. Low morale can make it difficult for employees to do their jobs successfully, resulting in even more misery, especially if it was a poor relationship with their superiors that led to their poor morale in the first place.

Absence of a Clear Career Path

Employees who know that promotion within the company is possible are much more likely to stick around. Unfortunately, many companies will hire from outside instead of promoting from within whenever an advanced job position opens up. Employees who feel like they don’t have a chance to advance their careers at your company will be more likely to accept an offer from a company that does offer such opportunities. Nobody wants to be stuck in a dead-end job. According to the Work Institute, roughly 22.2 percent of employees who left their jobs in 2018 did so in pursuit of career development.

Financial Insecurity

An employee who is worried about their financial security won’t put loyalty to your company over their financial needs. If another company comes along and offers them better compensation or benefits, they will likely leave. The Work Institute estimates that 9.6 percent of employees who left their jobs in 2018 did so for better compensation and benefits.

Lack of Satisfaction and Commitment to the Organization

Employees want to feel like their work means something. They want to feel like they are a part of the company and that they play an important role. If they’re not engaged with the goals of your company and feel undervalued, they won’t be engaged and the less committed they will be to your organization. Such employees may consider other job opportunities that may be more personally fulfilling.

How to Build the Ideal Company Culture

Company culture is a bit of a broad term. Generally speaking, it refers to the company’s values, ethics, expectations, and goals, all of which contribute to the company’s work environment. If any of these elements are poor, it can affect your employees’ comfort, behavior, and state of mind, all of which will affect their day-to-day work experience. In some cases, your company culture might differ from some of the employees’ ideas of what the ideal culture should be, which can cause issues as well. Hire employees who not only meet the requirements of the role you’re filling but who you believe will be a good fit for your company culture as well.

When it comes to the existing culture, it’s the company that establishes its culture, not the employees. Your company culture needs to be one that new employees can adapt to easily. Here are a few tips on how to build the ideal company culture:

Establish Company Core Values

Strong company culture is one that aligns with its core values. If you don’t have a core set of values, then begin by establishing them. Not only are they essential to your company culture, but they are also essential to your company’s brand. Common core values often include an emphasis on collaboration, balancing hard work with fun, pride in the work you do, respecting every person in the workplace, and maintaining a positive attitude. Just keep in mind that your core values should relate to your business.

Set Company Culture Goals

Establishing your core values doesn’t automatically mean that the company culture you desire will fall into place. Achieving the company culture you want means setting company culture goals and then working to achieve them. For example, if you want to create a more collaborative company culture, then set that as a goal and implement steps to achieve it. These steps might include sharing that goal with your managers, implementing more team-friendly software applications, and requiring more team-wide meetings.  You could even implement fun team-building exercises, which many businesses do by investing in company retreats for their employees.

Introduce the Culture Through the Onboarding Process

The onboarding process is essential to getting new employees up to speed. Without an effective onboarding process, many new employees will feel lost, confused, and frustrated. Onboarding helps to establish expectations and provide guidance. And it shouldn’t just involve the actual work responsibilities of the new employee, but also educating them about your company culture. Your company’s core values should be explained to new employees during the onboarding process. They should be told exactly what is expected of them in terms of adapting to your existing company culture so that they can contribute to a positive work environment.

Create a Connection Across Generations

Fostering social connections throughout your workplace will help your employees feel less isolated and more comfortable when at work. It will help promote collaboration and will encourage employees to rely on each other more often for help, improving performance and productivity. However, there is one particular challenge that many businesses have when it comes to encouraging social connections: generation gaps may exist.

Older employees and younger employees are less likely to establish natural connections with each other compared to employees of the same generation. The last thing you want is to divide your company into cliques based on age or any other factor since this can sometimes lead to issues (such as resentment or unhealthy competition). Make an effort to create a connection across generations throughout your organization. You can do this by relaying this goal to your managers and requesting that they make an effort to team up employees of different generations more often.

Lead Your People, Don’t Boss Them Around

Your leaders are essential to your company culture. They need to embody your values and practices, and the best way to establish a strong company culture is to lead by example. However, one of the biggest mistakes that people in leadership positions make is to see themselves as the “boss.” You don’t want bosses at your company, you want leaders. Employees resent bosses as they tend to order them around instead of guiding them. Leaders help to empower, teach, and inspire their teams, something bosses rarely do. An employee is more likely to respect and build a relationship with a leader than they are a boss.

Create Inclusivity and Pride Through Social Media

Social media can be an incredibly effective tool when it comes to showcasing your company culture as part of your employer branding efforts. Potential employees generally research companies online by visiting their social media pages. If you showcase your company culture, you’ll be more likely to attract candidates who will be a good fit for that culture as well. However, it’s not just about attracting new employees. Showcasing your company culture through social media can help to engage existing employees as well and can give them something to be proud to be a part of.


Twitter is useful because you can use it to keep employees informed about company-wide events, such as office parties, company retreats, celebrations, and more. Using Twitter in this way builds company culture by giving employees an easy way to stay involved and to be engaged with what’s going on in and around your company.


Facebook can be used in so many ways to help strengthen company culture. For example, you can encourage employees to follow your company’s Facebook page so they can share content that you post with their friends and family. If you post good content, they will be proud to share it. You can also use Facebook to highlight employees and to recognize their efforts. For example, if you have an employee of the month program, you can post an article about that employee on your page. Employees will feel proud of such mentions and will feel like a big part of your company when you do this.


Instagram is an effective way to keep employees engaged because you can use it to post behind-the-scenes videos and pictures of your workplace that employees can engage with. For example, if you have a Hawaiian t-shirt day, there’s no better way to show off company culture than posting pictures of employees wearing their Hawaiian t-shirts on Instagram. Employees can then engage by commenting on those pictures and sharing them. You can even encourage employees to use company-identifying hashtags for their own pictures at work functions and events. All of this helps increase engagement and pride in your company culture.

Additional Tips for Retaining Employees

Clear and positive company culture can go a long way toward keeping employees at your company. However, company culture isn’t always enough when it comes to retaining your best employees. Some other strategies to consider to improve your employee retention rate might include:

Implementing a Competitive Benefits and Compensation Package

An employee who is underpaid will jump at any offer that comes along promising to increase their compensation and benefits, no matter how strong your company culture might appear to be. This is especially true if the employee does not feel financially secure. Be sure to offer fair and competitive benefits and compensation package to new employees. Remember, by taking care of your workers, you’ll earn their loyalty. When an employee is paid well and works in a positive environment, they’ll be less likely to pursue a different opportunity. In some cases, they may even turn down a slightly better offer to remain with your company.

Offering Employee Training Regularly

By offering your employees the opportunity to advance their skills through additional training opportunities, you show them that you are invested in their improvement and in their future. They will not only appreciate that you’re offering them training opportunities, but they will also see it as an opportunity to advance their careers at your company, making them more likely to stay put.

Recognizing Your Employees’ Accomplishments

An employee who works hard wants to know that their hard work is appreciated. By recognizing the accomplishments of your employees, they will feel like a valued part of your company. If you fail to recognize the work of your employees, they won’t feel like they are properly valued and they won’t feel a sense of loyalty to your company. This will make it easier for them to leave your company if another opportunity comes along.

Make Your  Employees Feel Valued

There is one single factor that influences whether employees remain at your company or decide to leave: whether or not they feel valued. It’s why creating a positive company culture is so important — because it helps to make an employee feel like a valuable part of your company. It’s also why compensating employees fairly, providing them with the onboarding and training they need to succeed, recognizing their accomplishments, and ensuring that there are leaders within your company that will encourage and inspire them are all so important. The more valued your employees feel, the less likely they are to seek out other employment opportunities.


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This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.