The more competent and productive a person is, the more expensive their departure will be for the company. But what if you could take action before a resignation is even on the table? With the right signals, a suitable talent management tool, and targeted HR measures, employee retention can be actively shaped. Find out how to do this here.
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- Employee retention and retention are closely related: a motivating work environment reduces the likelihood of resignations.
- Good retention reduces costs, prevents productivity losses, and relieves the burden on remaining teams.
- Regularly measuring engagement allows you to recognize early warning signs of demotivation or inner withdrawal.
- An effective HR strategy combines attractive benefits, targeted training, and recognition by managers.
What is employee retention?
Definition
Employee retention refers to when companies take targeted measures to retain competent and high-performing employees in the long term.
What is the difference between retention and employee retention?
Retention aims to prevent departures. Companies often respond with concrete measures such as salary increases, home office options, or promotions. It is a quick response to a potential risk of attrition with the clear goal of stabilizing staffing levels and performance.
Employee retention goes one step further. It creates the conditions for long-term commitment: recognition, a positive corporate culture, and clear development prospects. Employees then stay not out of obligation, but out of conviction.
In practice, both approaches are intertwined. Measures to promote employee loyalty almost always have a positive effect on retention.
How important is employee loyalty for companies?
Reducing turnover costs
The more experienced a person is or the more strategic their role in the company, the higher the costs when they leave the company. In addition to administrative expenses or possible severance payments, additional costs arise in the recruitment process: job advertisements, reviewing applications, interviews, and onboarding. Added to this is the time it takes for a new person to be fully trained and able to perform their role independently.
Retaining key skills in the company
When experienced employees leave the company, valuable knowledge is also lost: working methods, technical skills, internal processes, or management experience. This know-how cannot be replaced at short notice. Measures to retain employees help to secure precisely these skills in the company in the long term.
Increasing productivity
Experienced and competent employees contribute significantly to a company's performance. Investments in employee retention therefore also pay off in the form of higher productivity. They not only secure knowledge, but also strengthen the performance of the entire company.
There is another effect: when someone leaves the company, the workload for the remaining employees increases. They have to take on additional tasks until a replacement is found. This often comes at the expense of motivation and efficiency.
When companies retain employees and reduce turnover, teams remain stable and productive. This stability helps the company optimize the relationship between costs and performance and remain competitive.
Strengthen corporate culture
High turnover can weaken corporate culture. When employees change frequently, values and common working practices lose stability. If, on the other hand, employees stay with the company for the long term and live these values in their everyday work, this strengthens a credible and stable corporate culture.
What factors influence employee retention?
Various factors determine whether employees stay or leave. Often it is not a single reason, but the interplay of several aspects. Among the most important are:
Compensation: If wages are below the level of the competition, there is an increased risk that qualified employees will look elsewhere. Accordingly, many companies avoid wage cuts: According to PwC's CEO Survey 2023, 83 percent of Swiss companies do not plan to cut wages in order to overcome economic challenges.
Leadership: Authoritarian or highly hierarchical leadership reduces the feeling of appreciation and increases the likelihood of resignation.
Development opportunities: A lack of further training, low internal mobility, or stagnant career prospects increase the risk of departures.
Workload: Many employees prefer companies with a better work-life balance.
Company values: Those who identify with a company's values are more likely to stay and show greater commitment.
How can employee retention be improved?
Analyze the reasons for departures
If you want to improve employee retention, you first need to understand why people leave. Indicators such as turnover rate, reasons for resignation, or the time it takes to fill a position help to identify patterns.
Over time, clear trends emerge: problems with team leadership, unattractive salaries in a department, or a lack of development prospects. HR software can help to efficiently collect and evaluate this data, for example in the context of employee appraisals or engagement surveys.
Measure engagement regularly
Numbers alone do not tell the whole story. Anonymous surveys, informal discussions, or engagement surveys provide insight into employee perceptions: motivation, workload, leadership quality, or whether employees want to stay with the company. Such feedback helps to identify warning signs early on, before they lead to resignations.
Offer attractive benefits
Benefits send a clear signal: the company takes the needs of its employees seriously. Good supplementary insurance, meal allowances, working from home, or contributions to commuting costs can already make a big difference. It is not luxury that is decisive, but relevance. Offers should be tailored to the needs of employees and reviewed regularly.
Good to know: The importance of health benefits, supplementary insurance, childcare, and wellness offers has increased significantly in recent years. At the same time, flexible working models, further training, and career development are becoming increasingly important. Source: PwC and TrueChoice Solutions
Align further training with the requirements of everyday work
In order to attract and retain talent, further training must address the real challenges of everyday work and not simply be imposed from above.
Structuring onboarding and reboarding
The first few weeks in a company are crucial. Structured onboarding facilitates integration, provides orientation, and strengthens the sense of belonging. The same applies to reboarding: after long absences or internal job changes, structured support makes it easier even for experienced employees to reintegrate.
Train managers in active listening and appreciative leadership
Whether employees stay or not depends not only on the work itself. The quality of the relationship with the manager is just as crucial. Therefore, train managers to listen actively, give regular feedback, and visibly recognize commitment.
Special features of employee retention in Switzerland
A multilingual and multicultural labor market
In Switzerland, many teams work in multiple languages and bring together different cultural backgrounds. In order to retain employees in the long term, HR measures should allow for sufficient flexibility instead of enforcing the same rules everywhere.
A specific legal framework
The basic provisions of labor law—for example, on employment contracts, maximum working hours, vacation entitlements, and protection against dismissal—are regulated by Swiss federal law and apply throughout Switzerland.
At the same time, the cantons can enact additional regulations in certain areas. For example, some cantons have a statutory minimum wage, while there is none at the federal level.
Skills shortage increases pressure
The shortage of skilled workers is particularly pronounced in sectors such as healthcare, technology, industry, and construction. This makes it all the more important for companies to retain qualified employees. Internal training, clear career paths, and good working conditions are key factors in remaining competitive in the long term.
When companies understand the reasons for employee turnover, invest specifically in employee retention, and respond to the needs of their employees, they create a working environment in which employees want to stay.
Retain employees in the long term with the right HR processes: Attracting and retaining talent is only possible if HR processes are clearly structured and employees are well supported in their day-to-day work.
