What is your employee retention strategy?

by Prof. Dr. Armin Trost

Keeping one’s employees seems to be an issue of magnitude for many companies. It’s worth considering an employee retention strategy.

Proposal A:

When it comes to employee retention, we focus on those employees who are disproportionately valuable and difficult to replace in the company. Anything else would be wasted effort. We benefit from the extensive experience of our employees. That is why we want to commit employees to the company as long as possible.

A low turnover rate is a good turnover rate.

We offer employees specific external (extrinsic), attractive incentives. That is how we try to compete successfully against our competitors in the labor market. Retaining employees in the company requires institutionalized limits. Therefore, we protect ourselves actively against labor piracy. We expect our employees to be loyal. When employees change over to competitors, we consider ending the relationship with that employee permanently. Employees that leave the company signal that other employers are better for them. We do not want to and cannot endorse that. Of course, this falls back on the employee in the end. If an employee (suddenly) leaves the company, we want to understand the reasons for this decision. Therefore, we introduce exit surveys. This will help to avoid future terminations. Employee retention is the responsibility of direct superiors. Our investment at this level are paying off. “People join companies, and leave bosses.”

Sounds like a consistent strategy, right? Here is proposal B:

The company can only retain key employees if it cares equally for all employees. We benefit from fresh perspectives and ideas of new employees. Therefore, we deliberately want to accept and cope with a “healthy” level of fluctuation.

We support employees if they want to leave us.

Those who choose to stay do so because they really want to, based on an intrinsic drive. Employees are free people. They are not the property of the company. We also tell them that. We can only retain employees, if we also let them go. We see a chance in every employee who leaves the company. They may later become valuable partners, customers or disseminators. We therefore maintain contact. There are great options outside the company for our employees. We respect that. Anyone leaving always has the option to return to us, sooner or later. An employee leaving should never be a surprise to us. Such a step is perceivable early on, we know about it well in advance, and talk openly and constructively about it. Employees will stay with the company, if the company’s cultural and structural conditions are right overall.

This strategy also does not sound bad.

What strategy is better, more appropriate, and more effective? Companies that actively deal with this issue probably cannot help but devote some thought to this issue.