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7 Reasons Why Your Retention Strategy Isn’t Working

Retention Strategy or Environment?

It can be easy not to accept that your retention strategy isn’t working and blame the post-pandemic environment we’re living in. After all, so many headlines point toward a lack of workers causing chaos in so many industries and companies worldwide struggling to recruit and retain staff. Whilst retaining employees is not a new challenge, particularly in some industries like hospitality, retail, and IT, it is definitely something that has become harder over the last few years. Research from Gartner earlier this year predicts that total annual employee turnover in the US will probably increase by 20% this year alone. It is likely that even organizations or industries that haven’t struggled to retain staff in the past, might not be able to escape this growing trend.

Why is retention important?

Engaged and satisfied employees don’t often quit. What that does mean is that if you have high levels of attrition, then you may have a problem with employee engagement. Disengaged employees are not good for business. Research demonstrates that disengaged workers have 37% higher absenteeism, 49% more accidents, and make 60% more errors. Organizations with low employee engagement scores have 18% lower productivity, 16% lower profitability, and 65% lower share price over time.  This does not take into account the sub-optimal way in which disengaged workers perform their jobs, their attitude, and the impact this has on other colleagues and thus company and teams’ results. One of the aims of your retention strategy should not only be to explore why people are quitting but to make sure that those who aren’t quitting are engaged and satisfied and explore why.


It takes time and money to recruit and train employees. It is estimated that the cost of replacing an individual employee can range from 50% to 200% of the employee’s annual salary depending on the employee and their role.


Failing to retain employees creates a real risk that an organization will not be able to function effectively. The organization’s success and growth will be severely limited without employees to produce goods or service clients adequately. As more employees leave, this puts unreasonable pressure on those who remain, leading them to question whether the organization has their best interests in mind and whether they would be better served elsewhere – creating a vicious circle.


If you heard that one of your favourite brands was really struggling to retain staff, what would be your first thought? Would you think again if you want to buy from that brand? Nowadays, reputation is everything and it doesn’t stay in-house. It normally leaks to the outside world and this has a tremendous impact on the brand and our perception of it. The reality is that when we hear of an organization that is struggling to retain staff, it leads us to question the culture and ask ourselves, “What are they doing to make employees leave?” Depending on our own values and moral compass, this could make us re-evaluate whether we want to continue to support the brand. Rio Tinto’s experience on how organizational culture has a considerable impact on the business is just one example of this.

The Perception Gap

Even if you have a solid retention strategy in place, it’s vital that it is based on the right foundations. Research in 2021 by consultancy firm McKinsey had some interesting results. They surveyed employees about their reasons for quitting, and they also surveyed employers about their understanding of why their employees were quitting. What was most surprising about the results was the disconnect between what the employees were saying and what the employers perceived. The main reasons given by employees were that they didn’t feel valued by the organization, or their manager, or didn’t feel a sense of belonging at work. In contrast, the main reasons given by employers were compensation, work–life balance, and poor physical and emotional health. Other reasons given by employees that were more important than the employers had anticipated were the potential for advancement, having caring and trusting teammates, and a flexible work schedule. This points to a fundamental issue in terms of retention strategy – if you don’t understand clearly why people are leaving, it’s going to be very difficult to change.

Mistakes you may be making with your retention strategy

Here are 7 mistakes you may be making with your retention strategy and how to avoid them.

Mistake 1: Making assumptions

You can read all the articles and research on retention out there, but this will not give you the answer to your retention challenges. You need to understand what is driving attrition in your organization and to do this properly, you need the right data. Life moves quickly and many people are in a fundamentally different place now than they were just six months ago. Last year’s employee engagement survey might not provide the right answers. You need to understand what each of your employees values most about their work, and what they feel is currently lacking. You also need to monitor this on an ongoing basis. What employees value from their work is likely to differ depending on many different factors: the type of work they do, their manager, their team, their own personal situation, and their individual values, career goals, and preferences. Therefore, any retention strategy needs to be flexible enough to take the individual perspective into account and not just look at retention from an overall organizational perspective.

Mistake 2: Lack of communication

Talking honestly and openly about retention in the organization is essential. You probably assume that employees know that the organization values them and wants to retain them, but this is simply not true. If you don’t tell them explicitly and regularly, for example, every time you notice great work, you risk employees thinking that the organization doesn’t prioritize retention and doesn’t value them. Unfortunately, our natural tendency to focus on the negative means that employees can often make invalid assumptions. This means it is imperative to continuously communicate to employees that they are valued and that the work they do is appreciated. This also needs to be followed up with behaviour that demonstrates this (see mistake 4 below). If you are struggling to recruit and that is having an impact on employees, then keep them up to date on what is happening and demonstrate to them that the organization is doing all it possibly can to remedy the situation.

Mistake 3: Too little, too late

Waiting until it reaches a crisis point is never a good solution. Trying to address retention on an individual basis as it happens is too little, too late. Exit interviews may give you valuable information about why people are leaving, but if the only data you’re gathering is at this stage, then you are missing opportunities to take action before employees reach the tipping point. Conversations about retention should start before an employee joins the organization and continue throughout the whole employee lifecycle. Exploring at the recruitment stage what is important for the employee in terms of their daily work and career aspirations and providing them with an accurate representation of what they can expect from their role in the organization is a vital first step. Career conversations where we explore with employees what they want from their work need to become part of the normal working day rather than just happening once or twice a year, or when there is a problem.

Mistake 4: All talk, no action

You’ve got your data, you know why people are quitting. So, what are you going to do about it? If you are doing nothing with the information you have or using the excuse that there is nothing specific that can be done – and that’s just the way things are, then you are failing. It is important that the organization acknowledges the data gathered from employees and communicates it openly and transparently to all employees. Using the excuse “but we can’t give employees what they really want so there’s no point” is not an option and it’s a very narrow view to explore solutions. If you really can’t give employees what they are asking for, then tell them that, tell them why, and explore ways to meet halfway. Treat them like the adults that they are. If you have no intention of taking any action, then there is no point in gathering data in the first place.

Mistake 5: Retention of top talent is your only goal

If your only objective of having a retention strategy is to stop your best performers from leaving, then you are missing a huge opportunity. An effective retention strategy focused on employees at all levels of the organization has huge benefits. This will reduce the amount of money you spend on recruitment and training, or at the very least allow you to put that money to more effective use. It will cement your reputation as an employer of choice who cares about what is important to their employees. It also sends a clear message to employees that they are valued and appreciated, which is likely to result in higher levels of engagement and motivation. In addition, an effective retention strategy protects the organization from any potential reputational damage and enables consistent growth and high levels of service delivery.

Mistake 6: A stand-alone strategy

If your retention strategy is designed and delivered by the Human Resources department or senior leadership without the day-to-day involvement of managers, supervisors, and employees throughout the whole organization, then it’s not as effective as it could be. A retention strategy that involves employees, supervisors, and managers co-creating effective solutions is likely to get much greater buy-in and deliver much more practical and desirable results. The role of Human Resources and senior leadership should be as facilitators and overseers of the process. Retention should not be viewed in isolation – it is one of the key indicators of the culture of the organization. Putting effective retention strategies in place can have a hugely positive impact on organizational culture.

Mistake 7: Thinking a great culture justifies a lower salary

You might find this surprising coming from us, but the financial package you offer is important. You may have an amazing culture, fabulous leaders, and good levels of engagement. But, if you pay your employees badly, then retention could be an issue. I think Dan Pink summed it up perfectly when he said “The best use of money as a motivator is to pay people enough to take the issue of money off the table.” So what does that actually mean? It means that you should be offering a fair market salary and benefits package. It doesn’t have to be the highest in your industry, but if it is the lowest, then this may impact retention.

Free training on creating an effective retention strategy

If you’d like to learn more about how to create an effective retention strategy, then join us for our free training on 17 August 2022 where we’ll be taking you through our four-stage process and sharing our experience of helping our clients create a more effective retention strategy. You can register for the training here.

If you’d like to know more about how we can help you with your retention strategy, then why not contact us or arrange a call to discuss it in more detail.


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