APRIL 2021

I can write books about employee retention. It is a deceptively complicated subject because the process of retaining top talent in your industry starts way before they even apply for a job at your company. You build a reputation on how you treat your clients or customers – and your employees.

Reputation building and branding is a whole different topic, but that reputation is the outward manifestation of your company’s culture. And the strategies you employ to get the best talent onboard to create the best product or service for your clients are part of how you build these values or culture.

Getting the talent is only the starting point. Beware of complacency towards your workforce. Keeping that talent inside your company means you will have to look after them better than any of your competition can. In 2020 and 2021, employee retention was the highest priority or concern of leaders in corporations globally and in almost all industries. Employee retention is getting more attention than ever before.

What is employee retention?

It is more than a buzzword. Retention relates to how well an employer retains employees. To measure the employee retention rate, you calculate the proportion of employees with a specified length of service (typically one year or more) as a percentage of overall workforce numbers.

Employee turnover is similar but by no means the same. Turnover measures the proportion of employees who leave a business in a given period (often year on year) as a percentage of the total workforce. It is a subtle but important distinction. They do, however, walk hand in hand.

The retention rates vary from industry to industry. For example, a basic Call Centre has a higher turnover rate and lower retention rate, with a relatively large recruitment pool of people you can train relatively inexpensively. Whereas industries that require rare skills have lower turnover rates and higher retention rates.

One exception in the current environment is where you have a very competitive industry, like embedded software engineering, or gaming designers. They are poached left, right and centre as very desirable skilled workers in their industries where talent competition is cutthroat right now.

What is a good employee retention rate?

You can calculate your employee retention rate as follows:

100(Number of employees at the company for 1 year or longer/Total number of employees in the company) = Retention Rate%.

A good or healthy employee retention rate would depend on your industry’s benchmarks, and also your business’s geographic location. In the UAE, employee retention rates are typically lower than in the UK, for example.

How talent retention helps your business



Staff retention benefits a business in many direct and indirect ways. The first direct benefit is money. It is an incredibly measurable marker. If you have to recruit employees for a single position or department – or entire business – it will cost you. The cost would include recruitment costs, time you are left without a suitable person to fill the role (the cost of unproductivity), the time and expenses it will take to train the right person. And so much more.

A Rainmaker Group study estimates the total cost of replacing an unskilled worker is about half of that employee’s annual salary. Replacing a technically skilled or higher-level employee can potentially cost as much as three to five times their annual salary. estimates that employee turnover costs UAE companies AED9.9 billion per year.

Happy employees = happy customers

Team dynamics are another major reason why employee retention is crucial to your business. A team with employees leaving and joining and leaving all the time will be a very demotivated, overworked, stressed team. Whereas the one with an established team bond can literally move mountains.

And then your clients or customers will love the fact that they deal with the same people on their accounts every time there is an interaction. It is the value of personal and enduring relationships with your customers and the reassurance of continuity. It is an invaluable competitive advantage in any business.

And that has a direct impact on the bottom line of your business too, since you will have more old customers returning and new customers knocking on your company’s door.

Reduce employee turnover processes


The fewer employees leave, the less time you need to spend on conducting exit reviews, analysing the reasons for the vacancy, and winding up an employee exit process. It is time consuming while you could have spent time on training or investing in another talented employee’s career at the company.

Motivated workforce and a positive environment


Simply put, if you retain people, you are doing something right. Very likely your employees like where they work. There is no time for complacency, though. If you continue to engage your employees and show them that they are valuable, they will be motivated and create a positive environment for all employees. And your impeccable reputation as an employer will reach the talent pool where you want to recruit from.


Less time spent on acquisition and onboarding


Retain the best workers, and you do not have to recruit, acquire and onboard unnecessarily.

Experienced company expertise

One of the biggest and best advantages of retaining good workers is that they grow up in your organisation. Your top talent grow into other roles within the company with a deeper understanding of the business that comes with experience.

Increased productivity


Workers are more productive when they can focus on the remit of their work and responsibilities. If they must take on responsibilities from another employee’s workload, it diminishes productivity and increases stress levels. Vacancies are unavoidable, but if it becomes a trend, productivity will dive.

Five strategies to retain talent


Keeping your employees happy is the key to building a loyal workforce. You keep staff happy and attract top talent by providing competitive compensation, incentive schemes, a healthy organisational culture that is fun and fulfilling to work in, training and investing in your staff.

It can take a little longer to recruit the right candidates for the teams in your company, but the patience and quality of your recruitment programme will pay off in creating a stable workforce that is motivated and fits right into your organisational culture. They would build lasting relationships within the company with coworkers and to the outside with clients and customers.

You will invest in talent you value and know will drive the business forward, establishing a long-term commitment that is mutually beneficial for both employer and employee.


1. Find out why people are leaving the company

This one is worth spending your time on. This is the time to ascertain whether you have issues in your organisation that may otherwise have remained hidden. Look at your employee retention rate and employee turnover rate, metrics that are easily calculable in a Human Resources Management System (HRMS), like the modules provided by gulfHR. These are useful, not only companywide, but also department, or even team specific. If the retention rate is low in a specific department or team, there are probably other reasons behind the turnover than just people moving on. You may have a leadership problem or something else, but it’s worth your while to investigate this.

Another crucial step in finding out why people are leaving is to have exit interviews. With these you can discover the reasons or clues to whether you have something to worry about or not. You would want to know what the company can do better as an employee, for example. You can also do employee surveys to stay in touch with your workers’ needs. These are easy to set up in your HRMS, and is something gulfHR offers. For example, in the gulfHR system, you can create an employee engagement and termination checklist.

2. Examine your current onboarding process


Onboarding shapes theemployee experience from the word “go”. These are first impressions, and they are important.Some of the statistics in the marketplace suggest that almost 70% of employees are more likely to stay with a company for three years if they had a great onboarding experience, while organisations with a standard onboarding program experience an impressive 50% increased productivity from new hires.

Examine your onboarding process to see if it delivers on the recruitment promises. Make sure you represent the real company, managing future expectations. Be mindful that a brilliant first few days, weeks and months will go far to retain employees. See what your competitors do to attract and keep their talent.

Also see our blog on employee onboarding to illustrate how crucial this step is in recruitment.

Bear in mind that we live in the 21st Century. Onboarding processes are easily managed in your HRMS, like gulfHR, which can be tailored to your company’s needs. In the system you can also manage the recruitment process preceding the onboarding process.

3. Encourage positive reinforcement

We all love a little praise. It triggers the release of dopamine, a neurotransmitter that helps control the reward and pleasure centres of the brain. Dopamine makes us feel good, and contributes to innovative thinking and creative problem solving at work.

Too much positive praise, however, can lead to egocentric and destructive behaviour. So give praise and/or reward based on real measurable outputs, as well as the small stuff, but only as and when it’s due.

I mentioned rewards. Yes, positive reinforcement is also in the shape of rewards at times. These can be seen as commission incentives or other types of rewards. However, remember to keep these fair and proportionate to the achievement.

Also consider the payback that positive reinforcement offers when someone is struggling or under-performing. You might not praise them in the same way as your top performers, but you will focus on what they are doing well, what their strengths are, and how you can support them to do better in other aspects of the job by providing mentorship, training or other forms of positive reinforcement.

In the gulfHR system, for example, a line manager can easily generate letters of appreciation and discipline, assign mentors or skills training.

4. Perform regular compensation analysis

Compare your company’s compensation structures to other companies in your industry. Check that the incentives and benefits you offer are attractive, meaningful, but fair. This creates a sense of being valued among your workforce and can increase employee retention rates. Compensation analysis is also something you can do by pressing a button in your HRMS.

5. Offer training and career development to employees

You may think that all companies offer this, but it is far from the truth. In 2018, the US Bureau of Statistics found that companies with fewer than 100 employees gave on average only 12 minutes of manager training every six months, while companies with 100-500 employees provided only 6 minutes every half-year.(Source:

PwC conducted a survey to find out from Millennials what makes an organisation compelling to work for. The priority that ranked highest for 10,000 people surveyed globally was opportunities for career progression (52%), competitive wages or other financial incentives (44%), and excellent training and development programs (35%).

Training and career development is easily managed in your HRMS. gulfHR, for example, offers training and development as an additional feature in the software designed to fit around your specific requirements.






Want to see how a HRMS software help you with employee retention?

gulfHR software solutions improve employee retention through useful data analysis, HR administration and employee modules designed to increase employee engagement and retention.


The most established and successful businesses operating in the Middle East use gulfHR. Find out why Startups, Bluechips, and the Fortune 500 trust gulfHR as their HRMS provider.

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