Culture Counts: How to Optimize Employee Retention

As most recruiters and company leaders know, long-term employee retention is one of the key drivers of company productivity, growth, and overall profitability. With unemployment rates at historical lows, the effort to retain top talent has grown even more challenging.

As you look around your company, you may not notice the signs of discontentment of your workforce. But they are likely there. According to a survey by Gallup, more than half of all employees are either “actively looking for a new job or watching for openings.”

And the costs to replace employees can be staggering, ranging up to 150% of their annual salaries. Given all that is at stake, what can companies do to increase their chances of retaining their best employees?

The best way to optimize retention is to focus on it from the onset. Let’s look at two areas that play leading roles in employee retention: Recruiting and onboarding.

Recruiting for Cultural Fit

The effort to retain employees begins well before they are actually hired. When it comes to recruiting, however, many recruiting professionals are focused almost exclusively on candidates’ qualifications, pushing other important criteria to the back burner. Credentials, experience, knowledge, and skills are certainly critical factors in selecting candidates, but they are not the whole story.

If you want to increase your chances of retaining employees, you must take “cultural fit” into consideration. Employees who are aligned with your company mission and core values are more likely to feel at home within your organization.

During the interview process, ask probing questions to uncover the reasons employees want to work for your company specifically, as opposed to any company in your industry. Those who can cite values are more likely to be a cultural fit.

These statements: “I was drawn to your company because of your commitment to corporate responsibility and giving back” and “Your organization’s focus on professional development appealed greatly to me” indicate a stronger cultural fit than “Your company offers competitive salary and benefits.” Employees who want to be a part of your organization are more likely to stay than those who are there for just a paycheck.

It is important to recognize, however, that employers should not use the reason of culture fit to hire only those of similar backgrounds, personalities, or ways of thinking. According to Pavneet Uppal, a managing partner with the employment law firm Fisher & Phillips, “When cultural fit is used to hire a homogenous workforce, the resulting lack of diversity will often manifest in poor creativity and undermine a company’s competitiveness.” He also said, “Focusing on hiring based on shared background or experiences may also lead to discriminatory practices.”

At FPC, our recruiters understand that the secret to employee retention goes far beyond credentials and compensation. Our motto, “It’s all about the people,” reflects a deep commitment to matching the right candidate with the right organization.


Getting off on the right foot sets the stage for a satisfying, long-term tenure with a company. The first few days and weeks of employment are critical to retention. New employees often face new jobs with a mix of excitement and trepidation. The treatment and new environment they encounter at the outset will steer the course for their future at your company.

According to the Aberdeen Group, “86% of new hires decide to stay or leave a company within their first six months and new employees are 69% more likely to stay longer than three years if they experience well-structured onboarding.”

Do you have a well-structured onboarding process to acclimate new employees to your organization? The steps you take to welcome new hires will have a direct correlation to an employee’s engagement and retention. Your onboarding process should include:

  • Communication: New employees need clear channels of communication with supervisors or mentors to put them on solid footing. Leaving them to make their own way or navigate the complexities of your organization will leave them feeling disoriented and unsupported.
  • Expectations: What are the goals of the position? Employees need to understand the results they are expected to deliver. Don’t wait for a three-month or six-month evaluation to tell an employee he or she is not meeting expectations. Provide tangible, quantifiable goals whenever possible.
  • Support: Make sure employees are provided with the resources, training, and tools they need to perform their jobs successfully. The better the company sets up new employees for success, the faster they can become a productive asset.

A high rate of employee retention is the not-so-secret weapon that provides companies with a competitive advantage in the marketplace. Selecting the right candidates and paving the way for them to succeed from the beginning are two effective ways to reduce turnover and maximize longevity.

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Jeff Herzog

Jeff Herzog