Guide to employee retention: how to keep your best talent

Frequently Asked Questions

How do you calculate your retention rate?

Before you can improve retention rates, you need to know what your retention rate is today.

To calculate your retention rate, first decide the time period you want to assess. For example, you could look at the past year or the past quarter. You then need to find two numbers:

1. The number of employees you had at the start of the time period

2. The number of employees you have at the end of the time period (minus any new hires)

Next, perform the following calculation to find your staff retention rate:

So, for example, you started a quarter with 162 employees and ended that quarter with 170 employees, 20 of whom were new hires, your equation would look like this:

((170-20) ÷ 162) × 100 = 92.56%

You need to remove any new headcount so you don’t accidentally overstate your retention. If you have 100 employees and add five new ones with no departures in three months, for example, your retention rate would be 105%. By subtracting any new hires from your retention rate calculations, you can get a more accurate reading.

When measuring longer periods of time, it’s possible that some people will join and leave the company within the time frame you want to measure. In these cases, you can calculate a separate figure for new hire retention, using new hires added and new hires remaining. So, if you hire 20 people in three months and one leaves, your new hire equation would look like this:

((20-1) ÷ 20) × 100 = 95%

Generally, retention rates over 90% are considered good. For new hires only, you would want to see that number at 95% or higher, as you would expect new hires not to leave within just a few months.

The roles with the highest turnover rates are Product (36.4%), Information Technology (36%), and Engineering (35.2%).

Employee Retention Tactic:

Try calculating retention rates for your in-office teams and remote teams separately. If you find a difference, it may be because your remote workers don’t feel as supported as their in-office peers.

Why does top talent choose to leave?

Bear in mind though that rates vary from industry to industry: retail, tech and media, professional services, entertainment, and accommodation have lower-than-average employee retention rates. So if your business sits within these sectors, your ideal retention rate might be a little lower than the global standard.

If your staff retention rate isn’t what you’d like it to be, you may be wondering why employees are choosing to leave.

McKinsey’s 2022 Great Attrition, Great Attraction Survey 2.0 provides valuable insight. According to this survey, the primary reasons employees give for quitting their jobs are ranked as follows:

1. Lack of career development and advancement

2. Inadequate total compensation

3. Uncaring and uninspiring leaders

4. Lack of meaningful work

5. Unsustainable work expectations

6. Unreliable and unsupportive colleagues

7. Lack of workplace flexibility

8. Lack of health and wellbeing supportA non-inclusive and unwelcoming community

Addressing these challenges within your organisation is essential if you are to benefit from strong remote retention. With that in mind, let us consider the most effective ways to improve retention in your business.

The role of equitable global compensation in staff retention

Staff are more likely to stick with your company if they feel valued and fairly treated. As evidence and common sense both suggest, providing equitable compensation is perhaps the most straightforward way to get started.

Why is equitable compensation so important?

When employees feel that they are compensated fairly for their work — in relation to their skills and in comparison to the remuneration received by their colleagues — they tend to be happier and more motivated.

Fair pay is one of the fundamental pillars of retention in any organisation. A clear and equitable approach to compensation builds trust and confidence among employees, who are therefore more likely to perform well and remain with the company.

Compensating your team members appropriately is essential, but making those calculations can get difficult. To make sure you’re getting it right, check out our guide to remote worker compensation.

How to construct a benefits program to retain top global talent

Companies that allow employees to work remotely have lower turnover rates than office-only companies. Remote’s research found this difference is estimated to grow to 4.4% in 2023.

If you intend to attract and retain a global team, you must provide a locally customised, globally competitive benefits plan.

While it’s easy to fall into a ‘one size fits all’ trap, offering all employees the same benefits package wherever they are in the world, it’s very unlikely that this solution will address their needs. Benefits design should account for local needs and cultural differences as much as possible. This doesn’t just enable you to attract top talent. The best benefits programs are critical for talent retention.

Joana Viana, Senior Global Benefits Design & Strategy Expert

To customise benefits packages and remain competitive with local employers who know their workforce thoroughly, you need deep local insight.

Let’s look at an example:

In the UK

Offer a medical plan with maternity cover to your employees in the UK, and they’re unlikely to be wowed by the prospect. That’s because they already have access to free healthcare, including maternity care, through the National Health Service (NHS).

In Singapore

Offer a medical plan with maternity cover to employees in Singapore, however, and it is much more likely to affect their opinion of an employer. In Singapore, maternity healthcare can end up costing thousands of dollars, so anyone considering parenthood would feel reassured to have this type of cover as part of their benefits package.

When it comes to benefits, nothing beats local insight. However, gathering this information yourself can be tricky and time-consuming. That’s why we created the Global Benefits Report. This resource helps businesses quickly and easily compare preferred benefits across countries and continents.

Want a little extra help with your global benefits strategy?

Here at Remote, we give businesses access to local benefits experts, so you know exactly which benefits you legally have to offer and which are optional extras. We also offer curated benefits plans for every country around the world, saving companies the time and money involved in doing the legwork for themselves.

Sign Up

"Remote enabled us to foster loyalty among employees by providing top-tier benefits and the rights that accompany local employment."

Heather Miki, People Operations Manager @ kWh Analytics

"We wanted to expand quickly into Mexico without having to manage the complexities of incorporation, payroll and benefits ourselves. Remote allowed us to do precisely that."

Greg Kefer,CMO @ Lifelink Systems

Build a remote-first culture to manage global teams effectively

Remote-first companies are not just for remote workers. It may sound strange, but it’s true. But adopting remote-first practices, you create a more equal working environment for everyone, regardless of where they work. Leaning into documentation, asynchronous work practices, and a culture that values results over hours is better for all. Let’s take a look at how to create a remote-first environment of your own.

How to reduce employee turnover with a strong talent retention strategy

What do we mean by remote-first?

Remote-first means that remote work is seen as the default. For employees based at your HQ and employees who have never even set foot in your office, the experience of working for your company should be the same.

Building a culture isn’t just about what happens outside of work. It’s also about how the work happens. We’ve put together a guide on how to build a strong and supportive remote culture to help walk you through it. What needs to change to go remote-first?

As many team leaders have experienced, transitioning from an office-based to a remote-first model is not without its challenges. If you try to replicate an office environment in a remote setting, you’ll only half-succeed.

Not everyone can pop by a colleague’s desk for a project update or chat about ongoing work on the way to the car park. Missing those everyday interactions can leave remote employees feeling disconnected, overworked and ineffective. This problem is sometimes compounded by common (but avoidable) mistakes that new remote managers tend to make:

Common remote leadership mistakes to avoid

• If you fail to communicate publicly and often, employees may feel disconnected from the group’s larger goals.

• If you don’t respect employee downtime and make requests of people who are off the clock, your team members may burn out.

• If you don’t set a good example of life-work balance, your employees may feel pressured to work long hours and suffer accordingly.

• If you micromanage by checking in or using time trackers to reassure yourself that your team is on task, you will drive away good workers.

• If you fail to use communication tools effectively, like by sending direct messages instead of posting in public channels, messages will get mixed and people will feel left out.

Making these mistakes can create a negative employee experience and take away from the success of your employee retention programs.

Regular employee surveys and exit interviews can help senior management determine — and, if necessary, improve — overall employee job satisfaction. And this reduces turnover.

The problem with micromanagement

Micromanagement is a common remote work problem. Many employers have felt a little nervous about handing over workday autonomy to their employees.

As a result, some organisations have introduced monitoring tools on team members’ computers in an attempt to track productivity. The consequence, however, is that experienced employees do not feel trusted.

This can breed resentment and lead to a breakdown in mutual respect. It also encourages key employees to meet the bare minimum level of productivity required.

So, what should remote-first managers be doing differently?

Judge employees by their productivity and effectiveness, not by the number of hours worked.

Why remote-first management is so powerful

Employees today value flexibility above all else. In the Remote Global Benefits Report, we found that workers around the world want flexibility in their workdays more than they want any other benefit, including four-day workweeks and retirement plans.

What does that mean for managers of remote teams?

Employees today are looking for workplaces where they can fit their work into their lives, not the other way around. They still want to do great work for great companies, but they are no longer willing to put their lives on hold in the process.

Prioritise diversity, equity and inclusion to keep employees connected

More employees now want to work for diverse, equitable and inclusive organisations. Remote-first employers are particularly well placed to accelerate the adoption of stronger DEI practices.

How a more diverse and inclusive culture benefits retention rates

DEI (diversity, equity and inclusion) is one of the strongest multipliers for employee retention. By embedding DEI into your organisational culture, you achieve:

How to develop a diverse, equitable, and inclusive global workforce

Developing a diverse, equitable, and inclusive global workforce requires real and sustained commitment.

• Create a remote DEI committee to help you understand your challenges and opportunities.

• Solicit honest opinions on your DEI performance from your team.

• Create a formal DEI policy, updating it regularly in collaboration with all team members.

• Build DEI into your recruitment strategy by employing inclusive hiring practices.

• Support inclusion of underrepresented groups, including women, ethnic minority, LGBTQ, and neurodivergent employees

Want to become a globally inclusive employer? Get up to speed with the help of our webinar: Building a globally inclusive recruitment strategy.

5 pillars to motivate and retain a high-performing remote team

When a team feels motivated and productive, they feel much happier logging onto work each day. It is important that leaders strive to maintain motivation and performance levels across their global team. This means nurturing the employee experience, from recruitment through onboarding and beyond.

Intelligent recruitment

Get off on the right foot by employing valued-based, remote-first recruitment practices.

• Communicate clearly and transparently

• Adapt the interview process to fit candidate time zones

• Share insights into what a remote-first culture is like for employees

These practices will help you to find talented employees who share your values, gel with your team, and understand what to expect as a member of your workplace.

Seamless communication

Effective communication and employee experience go hand in hand. To improve your communications, follow our communication guidelines for remote teams:

• Prevent notification burnout. Encourage employees to turn off notifications when they need to concentrate on the task at hand.

• Make updates transparent and searchable. Document important meetings and progress reports, then save these documents publicly so they’re accessible to all employees.

• Establish communication norms. Ensure employees know communication best practice for all of the communication platforms your company uses.

• Never sacrifice 1-1s. Get to know your employees and give them space to raise issues by regularly scheduling one on one calls.

Comprehensive onboarding

Onboarding is another lever for remote-worker retention.
Employee turnover can be as high as 50% in the first 18 months of employment. To avoid being part of this statistic, the ideal remote onboarding program includes:

• Engaging, self-serve resources

• Assigned onboarding buddies

• Introduction to company values and culture

• Info on company communication norms

• Expectations and targets for their first weeks at work

• Regular manager check-ins

Opportunities for progression and clearly communicated career paths are the most effective way to improve retention (63%) — even above increasing salaries!

Smart meetings

Meetings can be highly disruptive. Too many meetings will decrease employee productivity without always providing value. What’s more, poor meeting formats can leave employees feeling frustrated and bored.

What can you do about it? You may need to reassess how meetings are run in a remote-first organisation. Here are our suggestions:

• Create an agenda, then cancel the meeting if it can be addressed async

• Set shorter time limits to keep things productive and fast

• Rotate essential calls to suit different employee time zones

• Make it acceptable for people who are not active contributors to leave meetings

• Schedule time for bonding and fun facetime to keep work meetings shorter and less frequent

Run remote meetings with these tips in mind, and they’ll become effective forums for communication rather than a drain on your employees’ time.

Supportive management

Without face-to-face contact, it can be difficult to spot signs of stress and burnout. Managers of remote teams in particular should be alert to how quickly burnout can affect their teams and act to prevent it.

That might mean:

• Keeping up-to-date with employee workloads

• Creating realistic deadlines

• Making time for team activities that aren’t related to work

• Encourage employees to take breaks and book holidays

• Model a healthy work–life balance so staff do not feel pressured to skip breaks

Support employees to keep them from burning out, and not only will they be more productive, but they will be more likely to stay with your company for longer.

How flexible work practices can help you retain top global talent

Employees love flexibility, remote work, asynchronous hours, and freedom. If you run your operations with a remote-first mindset, you can provide employees with all of those things while reaching new heights on productivity, responsiveness to customer needs, and accountability.

Flexible working: a top priority for remote workers

Flexible working — the freedom to work where, how, and when you choose — is a top consideration for a large proportion of employees.

Remote’s Global Benefits Report found that flexible working matters to all groups, and particularly to women and younger workers. Women frequently shoulder extra responsibilities at home and with their families, so flexibility can be vital as they balance those demands. Younger people tend to be more mobile, meaning flexibility can help them design the lives they want while developing within your organisation.

Our Global Benefits Report underlined the importance of flexible working conditions for those working in remote roles and globally distributed teams.

This data shouldn’t just inform your recruitment strategy and compensation structure.

You need to proactively adapt and consider how you can prevent your best team members from seeking another role. Find out what your top performers value most and make proactive improvements internally to boost retention and demonstrate care and loyalty to your team.

Offering clearer paths to promotion, performance-based compensation increases, and more flexible working conditions to retain your best talent will almost always be less cost and time intensive than the alternative of losing key team members and being forced into recruiting replacements.

Flexible work is top priority for 29% of employees

But flexibility isn’t just for a few people: it’s for everyone.

More flexible companies are better able to weather difficult periods and to seize new opportunities. The question is how to provide the flexibility employees need. For a sizeable section of the workforce, the ability to work flexibly can determine where they choose to work and whether they stay in a role. Overall, the option to work flexibly (where and how they want) is a top consideration for 29% of employees, but the share is higher among several key subgroups, including: Contractors 38% — it is their number one consideration; Gen Z employees 35% — it is their third consideration; Women 32% — it is their fourth consideration

Offer work conditions that top talent is seeking

69% of employers believe they currently offer flexible working benefits, but only 47% of employees say they’re receiving them.

There is a disconnect between the flexibility employees want and the flexibility organisations provide. Why might that be? Leaders may have a different definition of flexibility, or senior staff may receive a different experience and be disconnected from the typical employee. Whatever the cause, employees are demanding greater flexibility and employers must offer it or risk falling behind. This perception gap is driving dissatisfaction and contributing to higher turnover, with the likely outcome being employers whose efforts to offer flexible conditions are not properly recognised.

Hidden retention benefits of offering autonomy

Autonomy is a key driver of employee happiness in the workplace, as is trust. So how do you base your culture around autonomy and trust?

It comes down to a combination of transparency, great communication, and meaningful support. This type of work culture creates a sense of psychological safety, ensuring employees feel confident in their roles and able to do their very best work.

How to improve your flexible working benefits

Flexible working shouldn’t mean sacrificing team cohesion or career progression opportunities. If remote workers enjoy flexibility while others receive raises and promotions, they will feel punished for their work choices and may look elsewhere.

By contrast, 45% of on-site employees regard telecommuting as a top-tier perk (almost as important as core benefits such as private medical insurance and paid holidays). The implication for global employers is clear: when top international talent are satisfied with an employer’s flexible working arrangements, they tend to be content with the overall benefits and perks package.

The cost-saving benefit of a flexible working offer

As well as giving employees a top priority perk, flexible working may also give you more flexibility when it comes to your global compensation package.

Remote workers regard telecommuting as a top-tier perk — nearly as important as core benefits such as private medical insurance and paid holidays. So long as their need to work remotely is met, they are generally satisfied with their broader benefits and perks package.

Rhiannon Payne, Remote Work Advocate

For many remote employees, working remotely is the benefit or perk they most desire, so they’re less critical towards the rest of an employer’s compensation package.

Only 36% of remote employees list benefits and perks among their most important considerations when evaluating a job offer. In comparison, 45% of on-site employees view telecommuting as a top-tier perk (almost as important as core benefits such as private medical insurance and paid holidays).

The takeout for global employers is clear. As long as top global talent are happy with an employer’s flexible work conditions, they tend to be satisfied with their overall benefits and perks package.

Find out what the experts say about managing a global benefits plan by watching Remote’s on-demand global benefits webinar.

You should be able to trust your employees from the first day. If you can’t do that, then why did you hire them? Providing trust early and measuring results instead of hours allows you to create an amazing work environment for 99% of people from the start while allowing you to identify anyone taking advantage of that freedom in bad faith very quickly.

Job van der Voort, CEO of Remote

How to foster transparency and trust for remote and global teams

Remote teams work best when everyone knows what’s happening. The best way to create that cohesion is through transparency, which comes before, during, and after the work is performed.

Create clear project outlines and set expectations

If anyone wants to know the latest on a project, they should be able to visit the public documentation to see for themselves. And, if they want to see how something is performing, that data should be available as well.

Let employees design their workdays

Some people are night owls. Others prefer to work early. Some people work all day in short bursts, saving their energy for the times that suit them best. As long as everyone documents and communicates, everything works in harmony.

Record, write, and inform

Keep everyone, in every time zone, up to speed by recording videos of meetings and writing regular updates in public places, like open Slack channels. Tag people frequently and create a culture where people can read notifications when they choose instead of constantly staying glued to the screen.

Communicate in public forums

Communication should be transparent, searchable, available, and accessible. Instead of sending a direct message, write in a public Slack channel or Notion page and tag the person you want to talk to. This way, anyone who wants to be informed about the project can see the public information easily.

Build connections by using face time to bond

Why spend valuable time together doing work you could do asynchronously? Of course, you should always provide space for team members to share their problems, challenges, and feedback in a psychologically safe space. Otherwise, you should use 1:1 meetings and team time to bond, play games, and catch up. Save the hard work for documentation, which allows people to collaborate without having to be online at the same time.

Demonstrate respect

Respect time zones, preferred working hours, and remote work feedback from employees. Stay open to improvements and iterations. Responsive leaders make all team members feel empowered to deliver their best while maintaining strong life-work balance.

Start implementing these retention tactics to keep star performers

Retaining remote talent in the current climate is not without its challenges, but we hope this guide has provided you with plenty of actionable advice.

With this guide at your hands, you now know:

• Why remote staff retention is important

• How to calculate your staff retention rate

• What makes a remote employee want to stay at your company

• Actionable tactics to improve retention for your remote workforce

The tips in this guide will help you, but there’s always more to learn! If you’re hiring globally, you can always contact Remote to make it easy to onboard, pay, and manage your remote workforce. We can even help you to prepare and structure competitive offers in new places, so your global compensation plan is always effective and compliant.