Want to learn the benefits of employee retention and why it’s so essential to keep your teams engaged and happy?
The ability to learn, retain, and apply new skills isn’t just a personal asset, it’s a key driver of professional and organisational success.
Yet, despite investments in training and development, many employees feel unprepared to tackle evolving challenges, leading to an alarming trend in workplace mobility.
According to Michael Page, more than two in five people who started their current job as recently as 2022 are now actively seeking a new role.
This statistic underscores a critical issue: when employees don’t feel equipped or empowered to grow in their roles, retention, both of talent and knowledge, becomes a significant challenge.
But what if you could turn this around by fostering better learning retention?
What if employees could not only master new skills but feel confident in applying them long-term?
Keep reading to learn:
- What employee retention is
- What the benefits of high employee retention are
- How to improve employee retention
Let’s get started.
What is employee retention?
Employee retention rate is a crucial metric for organisations that reflects the percentage of employees who remain with the company over a specified period.
Related: Employee retention statistics you need to know
Retention rate is calculated by dividing the number of employees who stay with the company by the total number of employees at the beginning of the period, and then multiplying the result by 100 to get the percentage.
It serves as an indicator of overall employee satisfaction, organisational culture, and the effectiveness of management practices.
High retention rates often suggest a positive work environment where employees feel valued and engaged, leading to increased productivity and morale.
Conversely, low retention rates can signal underlying issues such as poor management, lack of career development opportunities, or inadequate compensation, which may necessitate strategic changes to improve employee satisfaction and loyalty.
By closely monitoring and improving retention rates, companies can reduce the costs associated with high turnover, such as recruitment, training, and lost productivity, you can build a more stable and committed workforce.
What are the benefits of high employee retention?
High employee retention is essential to an organisation’s success for numerous reasons.
Don’t believe us?
Here are seven reasons why:
1. Cost savings
One of the biggest benefits of retaining employees is the impact on recruitment and training costs.
For high-turnover, low-paying jobs, expect to pay around 16% of the employees salary to replace them. For mid-range positions, expect to pay around 20% of the employee’s salary to replace them.
By retaining employees, particularly high-impact employees that are indispensable to the organisation, you can avoid these costs and instead allocate resource to other areas.
Experienced employees require less supervision, less training, but are more efficient meaning better productivity and reduced operating costs.
2. Increased productivity
Engaging employees allows them to feel more valued and supported. And when you achieve that, they’re more likely to feel motivated and do better work.
Plus, long term employees tend to be more productive since they’re more familiar with the work and the company processes.
In fact, it can take a new employee 1 to 2 years to reach the productivity level of an existing employee.
Engaged employees are more likely to go the extra mile, resulting in better business performance.
3. Better employee wellbeing
A high turnover rate is easily felt by your current employees.
It can create a sense of instability and negatively impact morale.
Working towards high employee retention creates a positive workplace environment, and that’s where good things happen.
When employees feel safe, valued and supported, it can:
- Reduce stress
- Improve job satisfaction
- Increase loyalty
- Improve wellbeing
All of these things are vital as an employer.
4. Improved customer satisfaction
Employee retention has a direct impact on customer satisfaction.
After all, experienced and engaged employees provide better customer service.
Retaining employees means better relationships with customers; this is particularly important for orgaisations that work with customers over a long period of time. But the impact is felt for B2C, eCommerce organisations too.
Long-standing employees will have better product knowledge, and from a sales perspective, this is fantastic news.
Building a workforce of trusted advisors and familiar faces can greatly improve the customer experience and lead to better business outputs.
By prioritising employee retention, organisations can create a positive cycle of satisfied employees leading to satisfied customers.
5. Knowledge retention
The cost of losing one employee can range from tens of thousands of dollars, to 1.5-2X their annual salary.
And for good reason.
It can take up to 2 years to get new hires to the same level of expertise as long-standing employees.
Ensuring high employee retention means better knowledge retention too.
Related: The importance of sharing knowledge in the workplace
6. Fewer talent issues
Organisations with high retention rates often enjoy better reputations, making them more attractive to top talent.
Job seekers are actively seeking out good company cultures, places of work where they will be invested in.
Having a high turnover rate could indicate to new talent that there are fundamental issues in the organisation.
And this could massively impact the calibre of employees that you can bring into the company.
Not only that, but lower turnover means less time spent trying to hire new recruits. Unless of course, your business is performing so well that you need to recruit to keep up with demand!
7. Innovation and growth
Stable teams are better positioned to innovate and drive growth.
According to the Harvard Business Review, companies with highly engaged employees see 2.5 times more revenue growth compared to companies with low engagement levels .
By focusing on strategies to improve employee retention, organisations can enjoy these substantial benefits, leading to a more robust and successful business.
How to boost employee retention using an LMS
By leveraging an LMS, you not only enhance employee skills but also build a culture of continuous learning that promotes loyalty, engagement, and long-term retention.
When employees feel supported and see a clear investment in their future, they’re far more likely to stay and thrive.
Here’s how:
1. Personalised learning paths
An LMS allows organisations to tailor learning experiences to individual employees.
Personalised learning paths ensure that employees develop skills relevant to their roles and career aspirations, making them feel valued and invested in.
2. Onboarding excellence
A well-structured LMS simplifies onboarding by providing new hires with easy access to company policies, role-specific training, and essential knowledge.
This smooth introduction boosts confidence and helps employees integrate faster, reducing early turnover rates.
3. Continuous development opportunities
Offering ongoing training through an LMS shows employees that you are committed to their growth.
Access to advanced courses, certifications, and leadership training fosters loyalty as employees see clear pathways for advancement.
4. Gamification and Engagement Tools
Modern LMS platforms often include gamification features like badges, leaderboards, and quizzes, which make learning more interactive and fun.
Engaged employees are more likely to stay with a company that supports a culture of growth and creativity.
5. Feedback and Progress Tracking
With an LMS, employees can track their learning progress and receive feedback.
This visibility into their development builds motivation and reinforces their sense of achievement, which can improve job satisfaction.
6. Fostering a Sense of Community
Many LMS platforms incorporate social learning features like forums and collaboration tools.
These create opportunities for employees to connect, share insights, and learn from peers, fostering a sense of belonging.
7. Reducing Skill Gaps
Employees are more likely to leave when they feel unprepared for challenges.
An LMS identifies skill gaps through assessments and provides targeted training to fill them, enabling employees to succeed in their roles and feel more confident.
8. Accessibility and Flexibility
An LMS offers 24/7 access to learning materials, allowing employees to learn at their own pace and on their own schedule. This flexibility accommodates diverse learning preferences and work-life balances, contributing to greater employee satisfaction.
Wrapping up
Boosting your employee retention rate can significantly benefit your organisation’s bottom line and overall success.
From cost savings and increased productivity to a stronger company culture and better customer satisfaction, the advantages of keeping skilled and experienced employees are clear.
By focusing on retention and implementing strategies to foster engagement and loyalty, you can create a thriving work environment that attracts top talent, drives innovation, and achieves long-term success.
Want to learn more about performance management or how a learning management system can enhance your employee engagement strategy?
Book a demo with us today to see how we support our customers create work environments that encourage high retention and better work performance.