Retention is a top priority for organizations. Learn how you can help improve employee satisfaction through work environment, learning opportunities and rewards programs.

Authors: David Alexander Sean McDonald


Causes underlying the disruptive workforce trends in recent years continue to exert their influence, contributing to evolutionary change. Understanding the potential for progress that the change brings helps employers overcome talent management challenges and steadily build toward organizational goals.

Talent management continues to take center stage as employers struggle to attract and retain talent at all levels of their organizations. COVID-19 intensified the labor shortage , and has accelerated turnover for three years and counting — and most employers continue to see annual increases. In 2022, 51% experienced a rate of 15% or more in 2022, including 18% with turnover of 30% or higher.1

During 2023, growth of the real gross domestic product (GDP) in the US is forecasted to slow to 0.7%, while persistently high inflation and rising interest rates are expected to impact the economy.2 Some economists predict that the labor market is on the other side of the pandemic hiring frenzy, as companies begin preparing for an economic slowdown by cutting workers and easing up on hiring.3 But the labor shortage isn't a short-term issue, and trends will likely continue to vary by sector, with employers perpetually recruiting externally and internally to add or secure talent.

Longer-term solutions incorporate attraction and retention as part of an overall workforce plan

Employers have been increasing total compensation in response to labor shortages and turnover. In 2022, worker costs in private industry rose 5.1% for wages and salaries and 4.8% for benefits, compared to 2021.4 While these reactive measures may temporarily help preserve market competitiveness, few organizations can maintain above-market salaries for very long, especially if the company falls short of their retention goals.

Additionally, research suggests that inadequate pay is only one reason workers resign. Other reasons include a lack of career development or advancement opportunities, uncaring or uninspiring leaders, limited workplace flexibility and not enough support for employee wellbeing.5 While there's no silver bullet, history has shown that employers who specifically include talent attraction and retention as part of their overall workforce plan are more likely to hire and keep the talent they need to be successful.

Engaging employees by optimizing their work environment, learning opportunities and rewards

Approaching attraction and retention holistically can help solve the challenges of too many competing priorities and talent management complexities. As a starting point, employers need to align the essential elements with the overall people strategy.

Balancing the key aspects of a positive employee experience, including the work environment, learning opportunities and appropriate rewards, sustains long-term results. But an imbalance of investments — such as too much emphasis on compensation at the expense of the environment and learning — undermines the organization's goals. Strategically and effectively addressing each of these three levers, in relation to each other, adds up to an exceptional employee experience.

Work environment as a key driver of desirable culture

Successful work cultures promote an environment that prioritizes respect and caring for each employee, from their direct manager on up, and protects the best interests of all. Employee perceptions of their work environment are as important to productivity as the talents they possess, if not more so.

The first essential element is the work environment and its components, described below.

Strong and consistent culture

A well-articulated and compelling employee value proposition attracts top talent. Once onboard, retention requires a culture that delivers on the promised rewards, benefits and other aspects of the employee experience.

Looking out for the best interests of employees is a strategic investment in an empowered and effective workforce, and employers demonstrate their commitment through decisions and actions that put wellbeing first. Cohesive efforts and a purpose-driven work ethic promote higher levels of engagement, loyalty and trust in leadership, which can lead to higher-quality goods and services that drive a better customer experience. When a respected brand is built on sincere caring and support for employees and the community, it's likely to increase attraction and retention as well as commercial success.

Balanced workload

It's important for managers to monitor workload. When staffing shortages occur, employees may help fill these gaps by taking on additional roles and responsibilities without additional compensation. Yet workload imbalances can overwhelm employees, compromising their wellbeing and potentially causing them to quit their jobs. If they do leave, the net gain for the organization is less than zero because the excessive hours worked contributed to the issue they were meant to help resolve.

Flexible work

The concept of work-life balance has broadened to work-life integration. Employees want and expect more choice over how and when they work so they can accommodate both personal needs and professional commitments. Flexibility doesn't diminish work responsibilities. Instead, it provides leeway for scheduling adjustments that work better for employees and their families, helping to reduce stress. The ability to integrate and prioritize work and life needs strengthens all dimensions of wellbeing.

Active feedback

Asking employees about their experiences with work and the organization is a common practice. Feedback is often gathered through formal or informal engagement and pulse surveys, which demonstrates an interest in objectively understanding their opinions, attitudes and the employee experience overall. Following up with the workforce acknowledges participants' time and effort, while commenting on results, at some level, recognizes their input.

To validate the importance of contributions, it's important to communicate any definitive actions that will be taken based on findings. Managers are uniquely positioned to receive and act on direct feedback from individual members of their team or the entire group. But a key responsibility is initiating regular and timely feedback. Regardless of the frequency of interactions, tact and proper consideration fosters an environment of mutual respect.

Learning as a key driver of talent development and retention

Establishing talent management as a core business process by integrating all aspects of the HR function helps identify opportunities for employee development. Learning succeeds when it leaves employees feeling confident about the value of the skills they acquire. Specifically, they want their employer to invest in development experiences that align with their goals and vision for future roles within the organization.

The second essential element is learning and its components, described below.

Learning succeeds when it leaves employees feeling confident about the value of the skills they acquire.

Intentional onboarding

Welcoming new employees with a structured onboarding experience helps them find a secure place within their team and the organization. They get an early start on making connections and forming relationships that promote a sense of belonging. Previous recruiting conversations as well as current interactions with others in those first few days and weeks after joining an organization set day-to-day work expectations for the future.

Employers that proactively assess and address the strength of their cultural attributes — including how consistently they encourage the expression of diversity and equitably support growth opportunities — can influence retention from day one. Polices that establish and promote inclusion and diversity and initiatives that correct imbalances are likely to coincide with a lasting competitive advantage.

Creative professional development

Skill-building and development opportunities interest most employees to some degree, and many employers are seeking more creative options. Learning styles differ among a given population, so a basic principle is to offer a variety of formats. Traditional in-person classroom experiences can be the most effective choice for meeting certain course or program objectives. But other familiar or newer modes — video, online, microlearning, gamification, and experiential and virtual reality — appeal to a wide range of preferences. Mentoring, a personalized and confidential method of learning, provides unique value.

In leadership, competency models for emotional intelligence, empathy, inclusivity and other softer skills are gaining importance. Organizations that use training to develop these skills tend to be more adept at creating a culture of psychological safety.

Prioritizing learning and development optimizes an organization's substantial investment in talent, including preparing them to advance. Sometimes hesitations about development stems from the fear that employees will move on if there's no role they can readily step into. But a balanced approach to retention combines appropriate recognition and rewards with valuable skills, incenting them to stay.

Structured career pathing

Career wellbeing can be improved by aligning growth opportunities for employees with the organization's talent priorities. This customizable mapping process creates individual paths based on employee criteria. The concept of employee-owned, manager-supported and company-enabled careers offers a framework for shared responsibilities and successful outcomes. The goal for effective performance management should be a celebration of individual and collective achievements boosted by training opportunities. Enriching skills prepares employees to excel in their current and future roles.

Hiring successfully closes talent gaps and meets future demand. It also facilitates the selection of new career paths, upward and across functional roles, which are better defined and better aligned with staffing and leadership development efforts. This key aspect of the people strategy then dovetails with organizational goals and processes to identify existing talent poised for development.

Rewards as key drivers of motivation and productivity

Encompassing compensation and recognition, rewards are effective when employees feel their pay is fair and competitive, and their work and achievements are appropriately acknowledged. While compensation and benefits need reasonable limits, competitive pay and benefits are foundational to engagement. Additionally, expressing gratitude, which requires little to no expense, is a simple form of recognition that's often highly valued by employees.

The third essential element is rewards and its components, described below.

Competitive compensation

Determining pay grades and salary ranges — aligned with the organization's compensation philosophy and based on its unique needs and goals — creates a foundation for managing pay effectively. Hiring guidelines that use existing employee data, coded by job, organize the task of flagging new employment offers that fall outside of the appropriate range. Also, salary bands and tenure-based evaluations help to ensure that salary adjustments apply to long-tenured employees.

Success is achieved when managers gain a better understanding of the purpose and value of clarity, and correctly communicate to employees how compensation decisions are made. Providing guidance for responding to pay inquiries is also important. By combining advanced planning with benchmarking data, employers are more fully prepared to determine how to appropriately set the bar for compensation — now and over the long term.

Customized recognition

Different types of recognition and rewards are effective, but thoughtful selection can optimize impact. Personalized expressions of appreciation that connect with the employee as an individual will likely carry more meaning than a five-year pin or a plaque. Recognizing performance or other achievements is an opportunity for employers to get creative, with gestures such as a gift card for hobbies, sporting events or local entertainment, or even donations to the recipient's preferred causes.

Stated beliefs that experiences are better than things seem to be circulating more widely in recent years, and some are backed by findings that experiential purchases improve wellbeing, even over the long run. For many people, work will be one of the most significant "purchases" among their longest life experiences, when weighed on the basis of expense and value. Potentially, that means investing in providing an exceptional employee experience is one of the best financial moves — and one of the most gratifying decisions — any organization can make.

Author Information


1 "2023 Workforce Trends Report Series: Organizational Wellbeing," Gallagher, Jun 2023.

2Lundh, Erik. "Economic Forecast for the US Economy," The Conference Board, 10 May 2023.

3"Jan '23 Recession or Correction? Highest January Since 2009, Highest Monthly Total Since September 2020," Challenger, Gray & Christmas, Inc., 2 Feb 2023.

4"Employment Cost Index Summary - January 2023," US Bureau of Labor Statistics, Jan 2023.

5Ellerbek, Stefan. "The Great Resignation Continues. Why Are US Workers Continuing to Quit Their Jobs?," World Economic Forum, 25 Jan 2023.


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