Workplaces are becoming more digital, and over the last couple of years, remote work has shown a boom across various industries, including IT. This working model offers its benefits, including tremendous flexibility, access to top-tier global talent, and perfect scalability. However, some tech companies face challenges, including enabling effective collaboration, maintaining an organizational culture, and retaining remote developers.
Does remote work increase employee retention? It does. Qubit Labs’ survey report on hiring and remote team management challenges shows that tech companies with onsite and remote teams experience difficulties retaining tech talents.
However, only 52.9% of companies with remote teams have these problems, compared to 66.7% of firms with local employees. At the same time, the remote employee retention ratio for these organizations is only 47.1%. This figure indicates that some businesses use ineffective retention strategies to motivate their staff. At Qubit Labs, we hire dedicated specialists from different countries for a variety of global projects, and we cooperate with customers all over the world.
At our company, the retention rate is 96%. We use specific remote work employee retention strategies to keep our employees satisfied, engaged, and dedicated to their positions and the company. Employee retention is an ongoing company policy that puts people first. In this article, we will highlight the best retention strategies that work.
What Is Employee Retention Rate?
The staff retention rate is the percentage of employees who remain with your company over a specific period. A speaker, coach, and former HR consultant, Kathleen Zadroga, said, “Investing in retention shows that the organization cares…which leads to more innovation, a more engaged workforce, better market share, and higher profits.”
Why Is Employee Retention Important for Business Owners?
Your talent is your most valuable asset, which keeps your business running. Staff turnover has a direct negative impact on strategic goals and organizations’ ability to achieve a competitive edge. Thus, your company should implement effective remote work employee retention strategies to ensure the smooth flow of your business and its future success.
Employee retention has the following benefits:
- According to research conducted by SHRM, employee replacement costs may reach 50%–60% of total expenditures, with a range of 90%–200%. Therefore, a high retention rate reduces high turnover costs.
- The longer employees work for your company, the more productive and loyal they become.
- Regular employee retention analysis (e.g., quarterly or annually) helps the company evaluate the effectiveness of implemented initiatives, create a more positive corporate culture, and enhance employee engagement.
How to Calculate Employee Retention Rate
| Number of employees at the end of a month | Number of employees at the beginning of a month | Number of employees at the end of a month / the number of employees at the beginning of a month | X 100 | Retention rate percentage | |
| 18 | 39 | 46 | 46 | 46% |
There are various calculations, but here is a simple formula to calculate your employee retention:
Number of employees at the end of the specified time period the number of employees at the start of the specified time period 100 = Retention Rate %
This figure is a compass, indicating the success of companies’ staff retention plans. What is considered a reasonable employee retention rate? For most business verticals, a retention percentage of 85–90% or above is generally considered good.
Example
At the beginning of the first quarter, an outstaffing company had 50 employees. On the last day of the first quarter, the number of employees was 45.
Starting number: 50
Remaining number: 45
Calculation: 50 – 45 = 5 employees left the company during the quarter.
Calculation formula: (45 ÷ 50) х 100 = 90%. This is a good employee retention rate.
General Retention Challenges
- Remote specialists might believe they have fewer prospects for professional progression than their on-site colleagues. Being “out of sight, out of mind” might discourage experts from looking for long-term work and cause them to stagnate in their careers.
- Remote workers can fear that their managers are unaware of the amount of effort they put into their work. They worry that their efforts will go unrecognized, and this fear decreases their motivation and loyalty.
- It is estimated that 29% of remote workers struggle with work-life balance. According to the Harvard Business Review, 77% reported experiencing employee burnout at work, and 91% stated that excessive stress or irritation lowered the caliber of their work.
How to Retain Remote Employees? Best Practices
Employee retention rates impact a company’s stability, productivity, and overall success. Therefore, firms that value their employees and want to succeed in the long run should implement a unified employee engagement strategy to improve remote employee retention. What are the three R’s of employee retention? Qubit Labs focuses on the 3 R’s” of employee retention. They imply Respect, Recognize, and Reward. Below, we will share the most effective strategies to keep your staff productive and motivated, along with the professional insights of Maryna Buzynnik, Head of Talent Management at Qubit Labs.
Build a Values-Based Culture
A toxic working atmosphere is believed to be one of the main reasons behind employee resignations. Regular layoffs will cause your retention rate to plummet. To prevent this, follow these steps.
- Convey your business’s vision, mission, and values. Discuss your objectives and challenges and help your employees understand how their work fits the overall plan. They will feel that they are a part of something greater than themselves, and as a result, they will gain a sense of purpose and belonging.
- Give your engaged employees autonomy and trust. Believe in their expertise and encourage them to handle tasks on their own. This promotes motivation, creativity, and responsibility.
Listen to and Act on Employee Feedback
Conducting employee surveys and interviews to analyze the level of engagement is paramount. You need to analyze feedback and act based on the findings. For example, a company can invest in new platforms to improve organizational levels or provide employees with career development opportunities. Besides, attention should be paid to new employees to prevent turnover.
Promote Professional and Personal Development
You must invest in employee training and development to promote your organization’s growth and improve remote employee retention. You can implement mentorship programs from team leaders, offer online programs to learn new skills, provide online courses and webinars to expand their knowledge and sharpen their skills, and offer an opportunity to attend industry conferences to learn about the latest technologies. A clear plan for developing skills and competencies helps define a professional’s career path.
Keep Up with Compensation and Benefits Trends
Compensation is at the heart of the worker-employer relationship. Low wages mainly cause employee turnover, as 55% of workers leave their current positions for higher-paying positions. Competitive compensation and benefits standards in a particular industry must be met to retain employees effectively. Analyze Glassdoor or PayScale salary data to ensure the company offers competitive salaries. Also, offer employees health insurance, a monthly budget for fitness, sessions with a psychologist for mental health, co-working space, and more.
Encourage Work-Life Balance
Remote work fosters a perfect work-life balance. Statista shows that in 2023, 74% of IT employees reported that their companies offered remote work options, making it the leading initiative to encourage work-life balance. Your company can offer flexible remote work schedules, the absence of micromanagement, a clear focus on employee outcomes, and autonomy to increase employee productivity.
Have Transparent Promotions
The promotion strategy should be simple, straightforward, and based on specific indicators. For example, it should include performance goals, clear bonuses for achieving specific milestones, and a list of resources needed to achieve objectives.
Pro Tips on How to Retain Remote Employees from Maryna Buzynnik, Head of Talent Management at Qubit Labs
- Since we work remotely, team building becomes virtual. The fact that team members are in different parts of the world doesn’t mean they can’t have fun and build strong relationships. We organize various team-building activities, online meetings of different departments, and corporate events.
- Regular check-ins are essential. We regularly conduct one-on-ones to gauge employee satisfaction and engagement. This helps us address issues as they arise and avoid retention problems.
- A seamless remote onboarding process helps new hires integrate into the company culture, enhance productivity, boost engagement and motivation, and prevent dissatisfaction and resignation.
Bottom Line
Thus, by figuring out how to improve your remote employee retention, your company can function more efficiently, eventually boosting performance. Focusing on your employee voice and implementing effective retention initiatives are a business imperative your company needs to strive and remain competitive. By building a values-based workplace culture, taking into account your employees’ preferences, rewarding and recognizing them, offering a competitive salary, providing various resources for personal and professional growth, promoting a healthy work-life balance, and offering transparent promotions, you can keep your employees motivated, productive, and dedicated to their work.
Qubit Labs has over ten years of experience setting up remote tech teams and successfully managing them. We hire the best talent for our clients and handle onboarding, taxes, administrative tasks, payroll, retention, and replacement. By partnering with us, you won’t have to worry about employee retention strategies and can focus on your core tasks. We will find the best professionals to drive your business’s success. Are you ready to cooperate? Book a free call to discuss all the details.
