The Best Employee Retention Programs: Top Strategies, Hacks, & Perks from Leading Companies

There’s a ton of hypothetical advice out there about improving employee retention rates, but sometimes the best thing to do is see what’s actually worked for successful companies. 

A couple years ago, we wrote about five companies with incredible employee retention strategies, and it’s turned out to be one of our most popular articles. 

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Now, we’re back with four more companies who are absolutely crushing their retention goals. Let’s take a look at what we can learn from the ways they do business:

 

Southwest Airlines Takes Corporate Culture to New Heights 

The air travel industry isn’t exactly known for it’s positivity, and with stressful jobs that require employees to work odd hours and interact with frazzled customers, it wouldn’t be surprising to see high turnover and disengagement. 

Nevertheless, Southwest has managed to beat the odds, with a 96% retention rate, 44 straight years of profitability, and no layoffs in their history.

Southwest Airlines co-founder Herb Kelleher said “the business of business is people,” and Southwest’s leadership still takes that message to heart. 

They do this through an internal department of “Culture Services,” which works to define and instill the company’s core values. They engage in activities like “Culture Blitzes,” during which corporate employees visit airports to bring food and good vibes to employees in the field. 

Southwest also understands the value of recognition. They have a policy of always making sure compliments from customers make it back to the employee being complimented. And they’ve set up an incentivized peer recognition system where employees can earn points for giving and receiving compliments, then cash those points in for prizes. 

With these kinds of policies, it’s no wonder 85% of employees say they’re proud to work for Southwest.

 

REI Cracks the Retail Retention Puzzle

The retail industry has one of the highest turnover rates — over 60%, according to the National Retail Federation. But outdoor recreation retailer REI has managed to get their turnover rate down to about 10% — that’s six times better than their average competitor. How?

If you’ve ever shopped at REI, then you know it’s no ordinary big box store. The company operates as a co-op, in which customers who buy into its membership program actually become part-owners of the company. 

They approach employee engagement with this same spirit of collaboration, offering profit-sharing and letting corporate employees pitch innovative ideas to leadership during “hack days.”

In addition, REI offers it’s full-time employees perks that are unusual in retail, like health coverage, retirement benefits, college tuition reimbursement, and paid sabbaticals for long-term employees. REI is also a heavily mission-driven organization, which is a strong contributor to company culture. 

REI has been named one of Fortune’s Top 100 Companies to Work For for more than 20 years running, and it’s not hard to see why. 

 

Ultimate Software Puts “People First”

Ultimate Software creates HR, payroll, and talent management tools, so when you see that their slogan is “People first,” you might assume they’re talking about their products. 

But Ultimate Software brings its “People first,” philosophy to its employees as well, which is a major reason why 97% of employees call it a great place to work. 

Ultimate Software maximizes employee engagement and retention with a variety of programs, including:

  • “U Belong,” an internal diversity and inclusion program committed to making sure all voices within the company feel welcome and heard
  • “UltiHome,” a software tool developed for employee use only, designed to maximize work-life balance by connecting employees with shared interests and helping them coordinate group activities
  • “UltiService Days” — each employee gets to take three days each year to volunteer for charities

Ultimate Software also offers truly jaw-dropping perks, like unlimited PTO, a 45% (!) match on retirement contributions, and access to an in-house wellness coach.

If that all seems excessive, remember that Ultimate Software makes tools that actually predict employee retention — so they might just be on to something.  

 

Location Labs Retains Employees by Hiring for Potential

Mobile security company Location Labs boasts a 95% retention rate in the highly competitive software space. How did they manage that kind of performance?

For Location Labs’ leadership, retention starts with hiring. The company has a policy of hiring based on the individual’s values and potential rather than job fit. By onboarding the people who are most likely to mesh with the company’s values and who have the most potential for upward growth, they prevent turnover. 

Location Labs also prioritizes feedback in their company culture. Employees will often decide to quit their job because of a bad manager, so it’s vital that feedback doesn’t just flow from the top down, but the bottom up. Location labs ensures its employees have opportunities to make their voices heard. 

Finally, Location Labs has mastered the art of the exit interview. Every time an employee leaves a company voluntarily, that’s an opportunity to gather data about why they made their decision. These conversations are often more candid than reviews with current employees, and can be invaluable for leadership. 

 

Conclusion

The best employee retention programs have a few things in common. They treat employees with respect and make sure their voices are heard. They also give employees what they want — which usually, but not always, means great perks and benefits. Finally, the best employee retention programs are intentional; it doesn’t just happen, you have to work at it.

 

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Andrew Sumitani

Andrew Sumitani

December 11, 2019

 

 

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