Employee retention programs: 12 real company examples

Imagine implementing a retention program only to discover that your employees’ day-to-day experiences raise red flags that make them consider leaving.

Suppose your top sales manager accepts another offer. She takes $1.2 million in client relationships and 3 years of product knowledge, including the things no one thought to write down.

Gallup estimates that replacing an employee costs between half and twice their annual salary. This doesn’t even account for the impact on client relationships or what a team member brings to the table that only they possess.

Employee retention isn’t something that businesses can address one resignation at a time.

So what does an effective retention program look like?

In this post, we’re going to walk through 12 real company examples of employee retention programs, including Google and Ikea, and the support behind their programs.

What makes an employee retention program work?

Great employee retention programs target a specific, identified cause of unwanted employee turnover.

When you develop an effective employee retention program, you’re usually focusing on one of the following areas of the employee experience:

• Quality of work: Employees have clear priorities, manageable workloads, access to the best tools, and talented managers.
• Growth opportunities: Employees have opportunities to build skills, move internally, and envision a next step within the same organization.
• Recognition and rewards: Employees receive competitive pay and their managers recognize important contributions within a reasonable time frame.
• Sense of control: Employees have a reasonable amount of control over when, where, and how they complete their work.

You may need to focus more on one area than another depending on your workforce. For instance, offering predictable scheduling may be more important than offering remote work opportunities for your employees in the hospitality industry. Offering internal mobility opportunities may be more important for your workforce than either of those options if you work for a global technology company.

If you borrow employee retention strategies from other contexts, you may have an unsuccessful employee retention program because you’re not addressing the right issue.

Moreover, you may need to address the "hygiene factors" (e.g., pay, staffing levels, schedule reliability, trustworthy promotion process) before you can focus on other areas of employee engagement. No matter how much you work on recognition or giving employees a sense of purpose, you won’t be able to fix those issues if your baseline employee experience is broken.

You should also understand sub-segments of your population based on criteria like manager, department, tenure, role, location, and hire cohort. Your aggregate numbers may suggest everything is fine when in reality you’ve got a specific team experiencing employee turnover of experienced employees at twice the rate of your overall organization.

Google: using data to improve management

Google applies the same testing discipline to its people practices as it does to its products.

Its People Analytics team uses workplace data, employee feedback, and business results to understand the conditions under which people work best.

One of the most famous examples is Project Oxygen. When Google embarked on this project, it half-expected the answer to be no when testing the hypothesis that managers matter.

They found that the quality of managers predicted both team performance and attrition.

Moreover, they turned this insight into observable, teachable behaviors (e.g. coaching teams, communicating effectively, supporting employee development, avoiding micromanagement) that could be measured and fed back to employees.

You can use a similar approach by first determining what effective management means within your organization.

Then, you can correlate specific manager behaviors with retention within your context and apply this to your people leader selection, onboarding, and development processes.

For instance, you could compare teams based on role clarity, recognition, workload, growth conversations, and intent to stay.

Salesforce seamlessly connects its company culture to tangible employee support

Salesforce often talks about its Ohana culture. Ohana is a Hawaiian word that means family.

Salesforce uses this word to represent its employee-centric company culture that also includes customers, partners, and communities.

Salesforce has translated the language of Ohana into concrete programs.

These programs have included paid volunteer time, charitable contribution matching, wellbeing support, and flexible ways of working.

These programs may not be available to all Salesforce employees in all locations or have the same details as they are specific to each market.

Regardless, they are a helpful example for other companies.

One consideration about such benefits is whether they really help your company’s retention efforts?

This consideration brings up questions about whether people have the bandwidth to take advantage of these benefits.

If people assume they’ll be expected to pick up the slack of someone using the volunteer allowance, they may bring that cynical view to an otherwise positive benefit.

In addition, companies should consider how well they embody their company culture and values when making tough decisions about promotions, workload, customer commitments, and recognition.

Costco makes a good case for sticking around

Costco offers a great package to keep employees around: competitive pay, benefits for eligible employees, stable hours, and real advancement opportunities.

They’ve stated that many of their warehouse managers started out in hourly positions. This kind of upward mobility is an important "reason to stay" in an industry that expects high turnover as a cost of business.

By promoting from within, they avoid the premium associated with external hires for management roles. They also retain valuable operational knowledge about their stores, customer expectations, and how policies translate to the store environment. An external hire would have to learn all this from scratch.

Interestingly, Costco addressed the economics of employment before focusing on employee engagement.

This is important to keep in mind if you’re trying to implement employee recognition programs.

Netflix retains high performing employees by giving them freedom and encouraging candour

Netflix structures its corporate culture around freedom and responsibility.

When employees have freedom in their decisions, they can make the best choices for their team within the company’s goals.

When employees have responsibility, they can make these choices with good judgment and limit time spent waiting for approvals.

This helps Netflix retain high performing employees.

Netflix also employs a unique compensation philosophy.

While other companies focus on compensation bands, Netflix focuses on the personal market of the employee.

In other words, they aim to pay an employee what it would cost to replace them or what a competitor would offer them.

This ensures Netflix isn’t undervaluing employees within compensation bands.

Netflix’s culture of freedom comes with some restrictions.

For example, managers use the "keeper test". Would a manager fight to keep this person if they plan to leave?

While this culture can be replicated in other organizations, it takes careful implementation to avoid creating an environment of fear rather than trust.

It also requires clear goals, candid feedback, and strong managers who can make decisions that are defensible.

One idea from Netflix’s high employee retention that organizations can apply in their culture is identifying and removing controls that don’t reduce real risk.

For example, when an employee waits on multiple layers of approval, it signals to the company that they aren’t trusted to use good judgment.

Adobe replaced annual performance ratings with regular performance conversations

Adobe replaced its annual performance review with an employee performance management system called Check-In.

Check-In encourages managers and employees to have regular conversations about expectations, feedback, and development opportunities.

This approach allows employees to adjust their performance throughout the year, before a problem impacts their performance rating or career development.

Adobe reported a meaningful decrease in voluntary employee departures after implementing these changes. That said, Adobe also invested in improving manager capability and accountability, so the performance review change isn’t the sole reason for improved retention.

One major problem with traditional performance reviews is the lag between receiving feedback and acting on it.

Imagine learning in December that the criteria for promotions changed in June. By the time you find out, you’ve likely already started interviewing for a new job.

If you want your organization to transition to regular performance check-ins, ensure they’re more than a compliance exercise.

Require managers and employees to prepare a short agenda for the meeting that includes discussion items such as priorities, obstacles, workload, recent feedback, career interests, and agreed actions.

To ensure the quality of performance conversations, ask employees to report back on their conversations rather than simply track how many meetings were held.

Zappos pays new hires to quit

Zappos gained attention by offering new workers an opportunity to take money and quit after their training period.

The idea is to ensure that the people who continue past the training period are genuinely committed to their work.

The exact amount of money varies, but the point is to offer enough incentive to make quitting tempting.

This ensures that the people who continue past the training period are genuinely committed to their work. Of course, this isn’t a perfect strategy since financial concerns or lack of other job opportunities may also keep people in the door, but it’s one way to ensure a self-selected group of employees.

Another strategy is to present an honest picture of the job to candidates before they accept an offer, so they aren’t surprised by the hours, the workload, how they’ll be managed, or what kind of behavior is expected from them.

If possible, conduct exit interviews with employees who leave within their first 90 days or first 180 days. If they say they were told something different during the recruitment process, you’ll know where to focus your energy to ensure the job as described matches the job as it actually is. Often, this comes down to one recruiter who repeatedly promises more than the role offers.

Hubspot: using transparency to build trust

When HubSpot wrote its Culture Code, it made the document public. This allowed employees to hold the company’s leaders accountable by comparing management decisions to the Culture Code.

HubSpot also used flexible work and unlimited vacation time.

To make these policies effective, they implemented minimum requirements, created coverage plans, and encouraged managers to lead by example by taking time off themselves.

HubSpot’s leaders shared information about their decisions and the trade-offs they faced. This helped employees trust them by eliminating the need to fill information voids with worst case scenarios.

You can evaluate the success of your transparency efforts by including relevant items in your employee engagement survey.

Patagonia has a clear sense of purpose that attracts employees

Patagonia’s sense of environmental mission and purpose permeates the company’s product decisions, activism, and public commitments. This makes it easier for employees to connect their work to the company’s mission instead of feeling like it’s just a cool thing to talk about.

In addition, the company has made supportive childcare available at its major locations. This isn’t something that every company can do, but it’s a common misconception that such efforts are easily transferable.

Moreover, companies that want to attract and keep employees through a sense of purpose need to be mindful of their bottom line commitments. If a company publicly commits to something, but then doesn’t follow through internally when it costs money, this can make "purpose" something problematic to attach to the company.

In other words, which employee groups face the biggest structural challenges to remaining in the workforce? Would child care, predictable work schedules, or caregiver-related flexibility be more useful to them than a generous lifestyle allowance?

Linkedin: go the extra mile to help employees grow their careers without leaving

At LinkedIn, they use a combination of learning, internal mobility opportunities, and dedicated development time to help employees grow their careers within the organization.

For instance, once a month, employees can set aside time for a specific theme like learning, wellbeing, relationships, or community work as part of their InDay.

Combine this with LinkedIn’s digital learning opportunities and employees’ active internal exploration, this helps the company combat one of the main reasons employees leave: They can’t see their next move within the organization.

Don’t get us wrong. Postings on a jobs board are helpful, but they aren’t sufficient.

Internal mobility opportunities fall apart if talent stays siloed within teams, internal candidates are considered tokenistically, or the career progression information needed to apply is only shared through informal networks.

To ensure you have an effective internal mobility strategy, track metrics like your internal fill rate, internal applications, time between promotions, and cross-function moves.

You should also track who gets stretch assignments, since those opportunities often lead to promotions more than courses do.

After all, employee development keeps people around only when they move into new roles with greater responsibilities.

American express: treating flexibility as a work design choice

American Express has offered flexible working and remote working arrangements for several years now.

But they’ve done so by taking into account how much on-site interaction is truly required for different roles.

This has resulted in a more tailored approach to flexibility.

At American Express, the availability of flexible work arrangements depends on the role and the country considered.

They take this approach because they have a global workforce.

As a result, they acknowledge that work flexibility is a work design decision that should be made on a job-by-job basis.

This creates a valuable worker retention strategy by reducing work-life conflicts that don’t have a business purpose.

In addition, American Express is mindful of the proximity bias work environment issues.

This is when managers gravitate towards giving better work opportunities to people they see.

Marriott encourages front-line employees to build long careers

At Marriott, they believe that if they take care of their people, their people will take good care of their guests.

This is why they encourage employees to move from hotel operations roles to supervisory and leadership roles.

In fact, there are senior leaders at Marriott who started out in front-line roles.

These employees retain valuable hospitality-specific knowledge about the hotel, guests, safety protocols, and how to recover from service failures.

To help employees take these career development steps, Marriott builds an infrastructure that helps employees understand role requirements, expected experiences, available training, typical next roles, and even open roles.

They also understand the importance of ensuring their employees can participate in development opportunities.

Ikea: providing long service rewards without focusing on rank

IKEA offers a Tack! program where eligible employees who meet service requirements start receiving contributions from their employer towards a retirement-related savings account, subject to local laws and regulations.

What makes Ikea’s program unique is that contribution amounts within a country are the same for all employees regardless of their position or salary. This ensures that the biggest rewards don’t automatically go to the highest earners, and instead appreciates everyone’s collective contribution.

IKEA also encourages employee mobility across different stores, functions, and countries. This global approach allows employees to remain with the company even if they want to change jobs or locations.

But long-term rewards like these are only effective if the time leading up to the reward is enjoyable. No employee wants to stick around for a pension if they’re dealing with bad management, difficult schedules, or limited advancement opportunities.

What do successful employee retention programs have in common?

Despite coming from different industries, good employee retention programs share several traits. These companies address the main reasons valued employees leave an organization.

• They understand that great managers matter. Google and Adobe have broken down great management into behaviors that can be taught, observed, and measured within their organizations.
• They deal with pay head-on. Costco and Netflix offer a competitive pay package instead of relying on culture to compensate for subpar pay.
• They offer real chances to move up. LinkedIn, Marriott, Costco, and IKEA provide employees opportunities to move into new roles within their companies.
• They give employees more control. Netflix, HubSpot, and American Express have done away with unnecessary rules about how decisions are made, when people work, and where they work.
• They live out and share values Patagonia and Salesforce back up their social commitments with employee programs and decisions made at the company level.
• They give employees opportunities to assess whether the company suits them. Zappos offers new hires money to leave, while other employers provide honest job previews and incorporate structured feedback sessions into their onboarding process.

In an ideal world, organizations would pick and choose employee retention program components based on what they learn from their exit interviews and employee engagement surveys, selecting parts that matter to their workforce.

Oftentimes, companies want to do things like offer flexible work or prioritize internal mobility, but they don’t make these things happen either because they overlook critical supporting components or they don’t realize these supporting components are necessary. For instance, flexible work only works well when there are bias-checked performance measures. Internal mobility only works well when managers are rewarded for "losing" their people.

Frequent check-ins only work well when managers are given the skills to hold good conversations.

You should follow these basic steps within your organization: analyze your employee data to identify workforce problems, select a workforce problem you want to address via an employee retention program, and decide what results you want to see from this program.

For example, your goal could be to increase the number of qualified internal applications or reduce voluntary turnover among employees who have been with the company two to five years. This will allow you to assess the retention program results based on department or manager, as opposed to number of participants, so you’ll be able to measure impact not reach.

Sparkbay automatically collects employee feedback at regular intervals (many clients opt for monthly pulse surveys). It then presents the information in easy-to-read reports with a simple engagement score out of 10. eNPS can also be used as a second measure.

Since the surveys are distributed every month, it’s easy to link changes to specific causes. You can quickly see whether a new check-in process has truly improved the feedback experience or if a new flexibility policy has altered employees’ perception of workload.

Sparkbay allows teams to filter their results based on manager, department, length of service and more helpful employee traits.

This is important since employee retention problems rarely affect an entire organization in the same way. Your organization may have an overall healthy engagement score, but your new hires, experienced specialists, or all employees under a certain level of management may have a low score.

Sparkbay can be customized in many ways. You can customize your surveys and dashboards as well as what information appears on each dashboard. This way, you can design your survey questions around your specific employee retention program (instead of shoehorning your program into a one-size-fits-all survey) and customize the wording on the dashboard so your managers understand the metrics in their own terms, not the vendor’s terms.

Sparkbay also ensures large companies can meet the access needs of their various users. Each manager can only see the results for the people on their team, based on your organization’s structure. This way, managers don’t see data from other groups they have no affiliation with.

Sparkbay also allows companies to hide results if not enough people respond, ensuring anonymity. Companies can set the number of responses they’re comfortable with (five by default). This way, employees can trust that participating in this survey won’t compromise their anonymity, allowing them to provide honest feedback.

Sparkbay is also ISO 27001 certified.

When managers can view their results, they can take advantage of Sparkbay’s library of simple actions. If a manager receives low scores in the career growth category, they can easily move from identifying a problem to taking a targeted action with their team, rather than waiting on HR to develop a separate action plan.

If you’re interested in learning how Sparkbay can help you build a more engaged workforce, you can click here for a demo.

What does an effective employee retention strategy look like?

Suppose you’re interested in improving employee retention. You’ve noticed an uptick in early tenure departures and you’re worried about the impact this will have on your internal mobility strategy, and you’ve received feedback from managers that this is impacting their team’s ability to get work done.

You’ve decided to take action. What do you do?

First, you need to identify one area of retention risk to focus on and understand your baseline level of success.

To assess your level of success, you need to determine how to measure success, who owns the success of this initiative, and when you will reevaluate progress towards this goal.

Once you’ve answered these questions, you can introduce a program. To understand its impact, you’ll want to compare the progress of a meaningful number of participants to a similar group not participating in the program over time.

This will allow you to assess the impact of your retention support relative to external factors, like changes in the labor market or a strong performance quarter.

Once your program is underway, you can use your measurement tools to assess its success. If you’re introducing a retention program designed to make employees’ daily work life easier, for example, you can assess whether employees can access the resources they need or whether they continue to struggle.

Similarly, if you introduce fun activities, you want to assess whether these deliver positive employee engagement or participation, and whether they create meaningful change to the employee experience.

Over time, you’ll want to assess the impact of your program on employee retention. Does it make employees more likely to stick around? Do they raise other issues that speak to your need to adjust your approach?

You’ll also recognize that the best retention strategy may not be a one-and-done deal with a perk.

If you’re interested in learning how Sparkbay can help you build a more engaged workforce, you can click here for a demo.