Guide to employee retention: how to retain your best talent

Frequently asked questions

How do you calculate your retention rate?

You cannot improve retention without first knowing your current retention rate.

To calculate retention, choose the time frame you wish to assess. For example, the past year or the last quarter. You then need two figures:

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

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

Then use this calculation to determine your staff retention rate:

For example, if you started a quarter with 162 employees and finished with 170, 20 of whom were new hires, the formula becomes:

((170-20) ÷ 162) × 100 = 92.56%

Remove any new hires from the calculation so you do not overstate retention. For example, if you have 100 employees and add five new starters with no departures over three months, a raw calculation would show 105%. Subtracting new hires gives a more accurate result.

When measuring longer periods, some people may join and leave within the timeframe. In those cases, calculate a separate new-hire retention figure using hires and hires remaining. For instance, if you hire 20 people in three months and one leaves, the new-hire calculation would be:

((20-1) ÷ 20) × 100 = 95%

As a rule of thumb, retention above 90% is strong. For new hires alone you should target 95% or higher, since you would not expect new joiners to leave within just a few months.

Roles with the highest turnover include Product (36.4%), Information Technology (36%), and Engineering (35.2%).

Employee retention tactic:

Calculate retention separately for on-site and remote teams. If you find a gap, it may indicate remote employees feel less supported than their in-office colleagues.

Why do top talent decide to leave?

Bear in mind that retention rates vary by industry: retail, tech and media, professional services, entertainment and accommodation have lower-than-average employee retention rates. If your business sits in these sectors, your target retention may be below the global benchmark.

If your retention figures are lower than you would like, you will want to understand why employees are leaving.

McKinsey’s 2022 Great Attrition, Great Attraction Survey 2.0 provides useful insight. The survey ranks the main reasons employees give for quitting as follows:

1. Limited career development and progression

2. Insufficient total compensation

3. Leaders who are uncaring or uninspiring

4. Absence of meaningful work

5. Unsustainable work expectations

6. Colleagues who are unreliable or unsupportive

7. Insufficient workplace flexibility

8. Lack of health and wellbeing support; a non-inclusive, unwelcoming community

Addressing these matters within your organisation is essential to achieve strong remote retention. With these causes in mind, let us review the best ways to improve retention.

How equitable global compensation supports staff retention

Employees are more likely to remain with your firm when they feel valued and treated fairly. Both evidence and common sense suggest that equitable pay is a clear place to start.

Why equitable compensation matters

When employees believe their pay is fair relative to their skills and compared with colleagues, they tend to be more satisfied and motivated.

Equitable pay is a cornerstone of retention. A transparent compensation philosophy builds trust and confidence, encouraging employees to perform and remain with the company.

Paying your team appropriately is essential, but making those calculations can be complex. To ensure you are getting it right, see our guide to remote worker compensation.

How to build a benefits programme that retains top global talent

Companies that allow employees to work remotely have lower turnover than office-only companies. Remote’s research estimates this gap will grow to 4.4% in 2023.

To attract and retain a global team, you must offer a locally customised, globally competitive benefits plan.

It is tempting to adopt a ‘one size fits all’ benefits approach, but a single global package rarely meets local needs. Benefits design should reflect local requirements and cultural differences as much as possible. That approach not only helps attract top talent but is critical for retention.

Joana Viana, Senior Global Benefits Design & Strategy Expert

To customise benefits packages and compete with local employers who know their workforce, you need detailed local insight.

Let’s look at an example:

In the UK

Offering a medical plan with maternity cover in the UK is unlikely to impress, because people already have access to free healthcare and maternity care via the National Health Service (NHS).

In Singapore

By contrast, offering a medical plan with maternity cover in Singapore is much more likely to influence candidates and employees. Maternity care can cost thousands of dollars in Singapore, so such cover offers reassurance to those planning parenthood. 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.

Local insight is essential for benefits, but gathering it yourself can be time-consuming. That is why we created the Global Benefits Report. This resource helps businesses compare preferred benefits across countries and regions quickly.

Need additional support with your global benefits strategy?

At Remote, we provide access to local benefits experts so you know exactly which benefits are legally required and which are optional. We also offer curated benefits plans for every country, saving companies time and cost.

Sign Up

"Remote helped us build loyalty with employees by providing world-class benefits and the rights that come with being employed locally."

Heather Miki, People Operations Manager @ kWh Analytics

"We wanted to quickly grow our Mexico presence without navigating the intricacies of incorporation, payroll, and benefits management ourselves. Remote allowed us to do exactly that."

Greg Kefer,CMO @ Lifelink Systems

Create a remote-first culture to manage global teams effectively

Remote-first companies benefit everyone, not only remote workers. Making remote the default creates parity across locations; emphasising documentation, asynchronous work practices and a results-focused culture helps all teams. Here is how to create your own remote-first environment.

How to reduce employee turnover with a strong talent retention strategy

What we mean by remote-first

Remote-first means treating remote work as the default. Employees at HQ and those who have never been to the office should have the same overall experience working for your company.

Culture shapes how work happens as much as what happens outside work. We have a guide to building a strong, supportive remote culture to help you. What needs to change to go remote-first?

Transitioning from an office-based model to remote-first brings challenges. Trying to replicate an office remotely will only deliver partial success.

Without casual interactions like dropping by a colleague’s desk or corridor chats, remote employees can feel disconnected, overworked and less effective. New remote managers often fall into avoidable mistakes:

Common remote leadership mistakes to avoid

• If you do not communicate publicly and frequently, employees can feel detached from wider goals.

• If you disregard employees' downtime and contact them while they are off duty, burnout risk rises.

• If you do not model life–work balance, staff may feel pressured to work long hours and suffer as a result.

• If you micromanage with frequent check-ins or time trackers to reassure yourself, you will drive away good workers.

• If you misuse communication tools — for example by sending direct messages instead of posting in public channels — messages will be missed and people will feel excluded.

These errors damage the employee experience and undermine the success of your retention programmes.

Regular staff surveys and exit interviews help senior leaders assess — and, if needed, improve — overall job satisfaction. This reduces turnover.

The problem with micromanagement

Micromanagement is a common remote-work issue. Some employers are uneasy about giving employees autonomy during the workday.

As a result, some organisations implement monitoring tools on team members' devices to track productivity. The outcome, however, is that experienced employees do not feel trusted.

This breeds resentment and erodes mutual respect. It also encourages key employees to perform only at the minimum acceptable level.

So what should remote-first managers do differently?

Assess employees on productivity and outcomes, not on hours logged.

Why remote-first management is so powerful

Employees today prioritise flexibility. Remote’s Global Benefits Report found that workers value flexibility more than other benefits, including four-day workweeks and retirement plans.

What this means for managers of remote teams

Employees want jobs that fit into their lives rather than forcing them to pause their lives for work. They still wish to deliver for strong companies, but not at the expense of their personal lives.

Prioritise diversity, equity and inclusion to keep employees connected

Employees increasingly want to work in diverse, equitable and inclusive organisations. Remote-first companies are well placed to accelerate better DEI practices.

How a more diverse and inclusive culture improves retention rates

DEI (Diversity, Equity and Inclusion) is one of the most powerful multipliers for employee retention. By embedding DEI into your culture, you achieve:

How to develop a diverse, equitable and inclusive global workforce

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

• Establish a remote DEI committee to identify challenges and opportunities.

• Ask your team for candid feedback on DEI performance.

• Draft a formal DEI policy and review it regularly with input from the whole team.

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

• Support inclusion of underrepresented groups, including women, ethnic minorities, 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.

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

When teams are motivated and productive, they are happier to log in. Leaders must sustain motivation across the employee lifecycle from recruitment through onboarding and beyond.

Intelligent recruitment

Start well by using values-based, remote-first recruitment practices.

• Communicate clearly and transparently

• Adapt interview scheduling to candidates' time zones

• Share insights into what working in a remote-first culture is like

These practices help you attract talented employees who share your values, fit your team and understand what to expect as members of your workplace.

Seamless communication

Good communication and employee experience go hand in hand. To maximise communication, follow our communication guidelines for remote teams:

• Prevent notification burnout. Encourage staff to silence notifications when they need concentrated focus.

• Make updates transparent and searchable. Record key meetings and progress notes, then store them publicly so all employees can access them.

• Establish communication norms. Ensure employees know best practice for every communication platform your company uses.

• Never sacrifice 1-1s. Regularly schedule one-to-one meetings to get to know employees and give them space to raise issues.

Comprehensive onboarding

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

• Engaging, self-serve resources

• Assigned onboarding buddies

• Introduction to company values and culture

• Information on company communication norms

• Clear expectations and targets for the first weeks at work

• Regular manager check-ins

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

Smart meetings

Meetings can be disruptive. Excessive or poorly run meetings reduce productivity and leave employees frustrated.

What can you do? Rethink meetings for a remote-first organisation. Here are our tips:

• Prepare an agenda, then cancel the meeting if the issue can be addressed asynchronously

• Limit meeting time to keep sessions brisk and productive

• Rotate key calls to accommodate different employee time zones

• Allow participants who are not contributing to leave meetings

• Schedule social bonding time separately so work meetings can be 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 time it is harder to spot stress and burnout. Managers of remote teams should be alert to how quickly burnout can affect people and take steps to prevent it.

That can include:

• Monitoring employee workloads closely

• Setting realistic deadlines

• Allocating time for non-work team activities

• Encouraging staff to take breaks and book annual leave

• Model good life–work balance so employees feel able to take breaks

Support employees to help prevent burnout; they will be more productive and more likely to stay with your company longer.

How flexible work practices help retain top global talent

Employees value flexibility, remote work, async hours and freedom. Operating with a remote-first mindset lets you offer these while improving productivity, responsiveness to customers and accountability.

Flexible working: a top priority for remote workers

Flexible working — the freedom to choose where, how and when you work — is a major consideration for many employees.

Remote’s Global Benefits Report found flexible working important for everyone, and particularly for women and younger workers. Women often carry more responsibilities at home, so flexibility helps them balance commitments. Younger workers are more mobile and use flexibility to design the lives they want while growing with your organisation.

Our Global Benefits Report highlighted the importance of flexible conditions for remote roles and globally distributed teams.

This data should inform your recruitment and compensation strategy.

Be proactive: find out what your top performers value most and make internal improvements to boost retention and show care and loyalty to your team.

Offering clearer promotion paths, performance-based pay increases and more flexible working conditions to retain your best talent is almost always less costly and time-consuming than losing key team members and recruiting replacements.

Flexible work is a top priority for 29% of employees

But flexibility is not only for a few people: it benefits everyone.

More flexible companies adapt better to hard times and exploit new opportunities. The question is how to offer the flexibility employees need. For many, the chance to work flexibly can determine where they choose to work or whether they stay. Flexible working is a top consideration for 29% overall, but higher among several groups: Contractors 38% (their #1 consideration); Gen Z employees 35% (their #3); Women 32% (their #4).

Offer the work conditions top talent seeks

69% of employers believe they offer flexible working benefits, but only 47% of employees say they receive them.

This perception gap suggests leaders and employees may define flexibility differently, or that senior leaders receive a different experience to typical employees. Whatever the cause, the disconnect is fuelling dissatisfaction and higher turnover, with employers' investments sometimes going unrecognised.

Hidden retention benefits of offering autonomy

Autonomy and trust are key drivers of employee happiness. How do you base your culture around them?

It depends on a mix of transparency, clear communication and meaningful support. This culture creates psychological safety so employees can do their best work.

How to improve your flexible working benefits

Flexible working should not mean sacrificing team cohesion or career progression. If remote workers enjoy flexibility while others receive raises and promotions, remote staff may feel penalised and look elsewhere.

By contrast, 45% of on-site employees view telecommuting as a top-tier perk (almost as important as private medical insurance and paid holidays). The implication for global employers is clear: if top global talent are satisfied with flexible working conditions, they tend to be satisfied with their overall benefits package.

The cost-saving benefits of offering flexible working

As well as being a sought-after perk, flexible working can also give you more flexibility when it comes to your global compensation approach.

Remote workers regard telecommuting as a top-tier perk — one nearly as important as private medical insurance and paid holidays. If their need for remote work is met, they tend to be content with the overall benefits package.

Rhiannon Payne, Remote Work Advocate

For many remote employees, the ability to work remotely is their most desired perk, so they are less critical of the rest of an employer’s compensation package.

Only 36% of remote employees name benefits and perks among their top considerations when evaluating a job offer. By comparison, 45% of on-site employees view telecommuting as a top-tier perk (nearly as important as private medical insurance and paid holidays). In comparison, 45% of on-site employees see telecommuting as a top-tier essential perk (ranking almost as important as core benefits like health insurance and paid holidays).

The takeaway for global employers is clear. When top global talent are satisfied with an employer's flexible working conditions, they tend to be satisfied with the 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 day one. If you cannot, then why hire them? Granting early trust and measuring results instead of hours creates an excellent environment for most people while allowing you to spot anyone misusing that freedom quickly.

Job van der Voort, CEO of Remote

How to foster transparency and trust in remote and global teams

Remote teams perform best when everyone knows what is happening. Transparency before, during and after work is the best way to create that cohesion.

Create clear project outlines and set expectations

Anyone wanting the latest on a project should be able to consult public documentation; if they want performance data, that should be available too.

Let employees design their workdays

Some people are night owls; others prefer mornings. Some work in short bursts and reserve energy for times that suit them best. As long as everyone documents and communicates, the team will function in harmony.

Record, write and inform

Keep everyone across time zones informed by recording meetings and posting regular updates in public places such as open Slack channels. Tag people often and build a culture where people can catch up on notifications when they choose rather than staying glued to the screen.

Communicate in public forums

Make communication transparent, searchable and accessible. Instead of sending a direct message, post in a public Slack channel or Notion page and tag the person you want to reach. That way, anyone who wants to follow the project can do so easily.

Build connections by using face time to bond

Reserve synchronous time for bonding rather than work that could be done asynchronously. Provide psychologically safe spaces for team members to share challenges; otherwise, use one-to-ones and team time for bonding, games and catch-ups. Keep substantive work in documentation so collaboration can happen without everyone being online at the same time.

Demonstrate respect

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

Start implementing these retention tactics to retain star performers

Retaining remote talent is challenging, but this guide aims to give you plenty of actionable advice.

With this guide in hand, you now know:

• Why remote staff retention matters

• How to calculate your staff retention rate

• What motivates a remote employee to remain with your company

• Practical tactics to improve retention for your remote workforce

The tips in this guide will help, but there’s always more to learn! If you’re hiring globally, you can always contact Remote to simplify onboarding, payroll and workforce management. We can also help you prepare and structure competitive offers in new locations so your global compensation plan remains effective and compliant.