All Employee Retention Strategies Start With Company Culture

November 28, 2018

For companies who want to get the most out of today’s workforce, you’ll find that there is a growing emphasis on retention. In particular, more and more companies realize that focusing on retention actually saves both time and money and benefits them holistically in the long run.

The cost of replacing a trained employee is quite high compared to retaining a competent employee, and according to a study by the Society for Human Resource Management, employers will need to spend anywhere from six to nine months of an employee’s salary in order to find and train their replacement.

What that means is an employee salaried at $50,000 will cost the company anywhere from $20,000 to $35,000 to rehire and retrain a new employee. For a highly-skilled executive, we see losses of upwards of $200,000 to the company. That’s a lot of money!

There are many strategies and opinions on how to improve employee retention. You’ll hear things from more perks, better benefits, flexible scheduling… the list goes on. However, to truly understand how to retain top talent, we need to first understand what makes them leave.

Why do employees leave?

There are many reasons that an employee will decide to leave a company. A few of the most common that we run into are:

  1. Bored and unchallenged by the work itself
  2. No opportunities to use their skills and abilities
  3. Employee’s job is not meaningful
  4. Don’t know how their work contributes to the organization’s business goals
  5. Lack of autonomy and independence on the job
  6. Lack of recognition of employee job performance

Companies can address most, if not all, of these problems by making adjustments to the way that they treat their employees. And while making a small change here or there can be a deciding factor in whether your top employee stays with the company or leaves it, we’ve found that the biggest impact on retention and the root of all turnover problems lies with your company’s culture.

Impact of Company culture

Company culture is sometimes confused with the perks or benefits that a company offers, but they’re not the same. While these things may make a company more fun and comfortable, make no mistake, company culture is more than just parties, ping pong tables, and free lunch Fridays.

Very rarely will you hear someone say someone say “I left my company because they didn’t give me free gym memberships”, “not enough paid sick days” or “we didn’t have enough free meals”. While these are great to have, they should be the icing on the cake instead of key reasons for employees to stay.  

Culture encompasses the company’s mission, values, ethics, expectations, and goals. A good company culture is one that keeps employees engaged with their job, loyal to the company, and committed to success. Having a positive company culture creates a work environment that engages employees allowing them to take pride in their work and be passionate about completing their assigned tasks.

According to HR Influencer Chris Orozco,  

“Culture requires ongoing attention and active involvement. As important as culture is to an organization’s success, it’s equally important to understand how your people perceive the culture. Great company culture and employee engagement are very much linked to one another, and culture will heavily influence engagement.”


Growth Opportunities

To address the first two reasons listed above of why employees leave – being bored or unchallenged by the work and lack of opportunities to use their skills – you need to implement a culture of growth! This growth mentality is vital to retaining your top employees. Employees lacking this mindset can quickly become a burden instead of an asset to the company.

One of the most important ways to establish a culture of growth is to constantly help your team find ways to improve and develop. Make training and development programs readily available to your employees and allow them the time to learn new skills that will not only benefit the company, but also help themselves in their personal lives. Find out what interests them and what skills they want to develop, and help provide educational resources that they can use.

Growing your employees helps your whole organization

There’s a story about an accountant who is worried about the cost of training employees who asked his manager “What if we develop them and they leave?” The manager replies by asking “What happens if we don’t develop them and they stay?” Don’t let your employees stagnate and become one of those types that show up for a paycheck and nothing else.

Doing the same thing day in and day out can quickly wear down on anyone’s excitement and passion for their job. This compounds when there is no end in sight. Find your employees unique strengths and skills, then build on them. Provide a career pathway and a growth timeline that assists employees with progressing toward new roles and responsibilities within your organization.

Lastly, you can instill growth into the culture of the company by making known the long-term growth potential and goals of the company! Get them excited to grow with your company and achieve key milestones together.  

For example, your company may not be at the point yet where it is ready to go international, but eventually, you want to build it to the point where you expand globally. Show employees your vision of the future and help them see their role in helping the company reach that point.


Meaningful tasks and Transparency

To address problems 3 & 4 – the feeling that their job is not meaningful and not knowing how their work contributes to the organization’s business goals – your company culture needs to provide meaningful work for your employees. Allow them to work on things that they are passionate about and can make a difference for the company. Keep them updated on the health of the company

Let’s be honest, not every single aspect of their job is going to be fun and exciting and new. Every job will still have some menial tasks and repetitive chores that need to be done. To mitigate this, it’s important to let employees know how these tasks contribute to the overall health and development of the company. Once they know the “why”, they will be more likely to accept their role and maybe even find innovative solutions to their job.

What makes a task meaningful?

Find ways to relate everything they do with the big picture and goals of the company. This is easier if you have a well-established company vision and mission statement to instill into your employees. As you condition your workforce to embody the company vision in their work everyone will be aligned with a common purpose.

Once employees know that their work has meaning and know the purpose behind the tasks, they will be more committed and willing to do complete them to their fullest potential. Be transparent about how their contributions are making an impact on your company’s bottom line. Like a well-running machine, every person has a part to play and each piece is important to the overall process.

In the spirit of transparency, it is good to set up regular updates on the condition of the company. Share with them the status of different projects, new contracts, and company growth. Employees will appreciate being in the information loop. Celebrate the successes together with your team! This is also a great time to answer questions and address rumors.


Autonomy and Recognition

To address the final two points on the list above of why employees leave – lack of autonomy or independence and lack of recognition – your company culture should welcome  independent thinking among your employees and provide more opportunities for employees to work on projects autonomously. On top of giving them this kind of autonomy, you should also establish a culture of recognition that will positively reinforce good work.

As Joan Elmore of Elmore Group puts it,

“Your strategy for having a company full of people who feel personally invested in its success is to let your employees help create it. You won’t be giving it up, or giving it away, or losing control. You’ll be sharing some of the process and ultimately, You’ll decide what to share.”

Giving autonomy is the opposite of micromanagement

Being a manager doesn’t mean you need to micromanage every aspect of your employees. Learn to delegate and assign others certain roles and let them own those roles. Let employees take charge of their own work. If employees are given the freedom to make choices and decide things, they will be more personally invested and committed to their projects.

Allowing employees to contribute to projects and goals within the company has the added bonus of allowing your company to access new and innovative ideas that your employees come up with during the process of achieving your company goals.

You can build a culture of recognition by publicly praising hard work and creativity among your workforce. When employees perform admirably or go above and beyond the parameters of their job, make sure everybody hears about it! When you build a culture of recognition by acknowledging your employees contributions to your company’s success, they will feel valued and be more likely to contribute more in the future.



By knowing why employees leave, and then adjusting your company culture to address those reasons, you will improve your company’s retention and develop your workforce for the better. As employees continue to work with your company for long periods of time, your company will benefit from their increased experience and loyalty while spending less time and resources hiring replacements to fill gaps within your organization. Finally, remember that all the perks, benefits, and retention strategies in the world cannot compare with a healthy and engaging company culture.



Dillon Chen
Dillon Chen
Dillon Chen is a content marketing specialist and SEO Director at ProSky, a company that gives you the ability to innovatively evaluate candidates and develop employees through succession pathways, so you can recruit, hire, and retain the best diverse talent & culture fit.

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