Benefits of Employee Retention: 10 Reasons Why It Matters

benefits of employee retention

Many companies in Egypt and other parts of the world believe that employees come and go. They believe that if one employee leaves, ‘it’s OK, we’ll just get another one.’

They believe that they’re saving money if the new employee gets paid less than the one who left.

But what they don’t know is that every employee who leaves is a cost incurred by the company. This is even more with employees who have been with the company for over a year. Let alone 5 or even 10 years.

These companies aren’t aware of the cost of employee turnover and the value of retaining employees. They have no ideas about the benefits of employee retention and how it can drive their companies forward.

It’s true that employees won’t spend their entire lives in a single company. But…employers who are successful at employee retention, engagement, and empowerment are better-positioned to grow and enjoy better employer branding.

But what is employee retention exactly? What are the benefits of employee retention for companies? And how can businesses retain employees in today’s fast-paced job market?

Keep reading to get answers to these questions.

What is employee retention?

what is employee retention

Employee retention involves having employees work for the company for longer periods of time.

However, employees don’t stay with your company because they’re not getting better offers elsewhere. It’s because they feel loyal to your business and want to stay and help you grow.

Companies who succeed at retaining employees usually have a few common characteristics. These include having strong leaders, who empower their teams, alongside employee retention strategies and employee retention programs.

On the other hand, companies that treat their employees like they’re replaceable often struggle with high employee turnover rates. Their branding also suffers because of disgruntled current and former employees, who have no loyalty towards the company.

Why employee retention is important  

Companies with high retention rates understand the benefits of employee retention. They know that by supporting their staff, mentally, physically, and even financially, they can reap more rewards.

When a company has a high employee retention rate, it enjoys more stability, a lower turnover rate, and its employees feel empowered.

This entices newcomers to stay longer at a company because they know that this company cares for its employees.

The higher the employee retention rate the higher the company’s overall morale and productivity.

Employees don’t feel pressured into working extra hours or completing a specific task. They feel it’s their mission and that they’re a part of the company and the company is a part of them.


What are the benefits of employee retention?

benefits of employee retention

If you’re still unsure why you should retain employees, these 10 benefits of employee retention may change your mind.

1)  Higher morale

One of the top benefits of employee retention is that it increases morale across teams and the whole company. Higher morale affects all aspects of work. It encourages employees to be helpful, interested, and engaged.

It also prompts employees to get creative, allowing them to brainstorm more. This allows them to focus on finding solutions to problems inside their teams, your company, or with your product or service.

 2)  Better productivity

The higher the morale and enthusiasm in your company, the more productive your employees and teams will be.

And with more productivity, you’re likely to see more sales and revenues, and better customer experiences.

 3)  Lower hiring costs

Every time you need to find a new hire, especially after a long-standing one leaves, you incur a cost.

There is a cost in:

  • Hiring a recruiter to find candidates to fit your job description. (If you don’t have in-house HR person)
  • The time your HR team spends to publish the vacancy across hiring platforms and social media.
  • The time your hiring manager spends to interview and test potential candidates.
  • The sales that decline or the workload that drops.
  • The overtime your current employees have to spend working to cover for the person who left, until the new hire joins and gets acquainted with the job.
  • Adding new benefits to your offering or your compensation and benefits scheme.

When you retain employees for longer, you benefit by reducing your employee turnover. A lower turnover means fewer hiring costs for your company.

4)  Lower training costs 

By investing in your employees and training them, you can retain them for longer. Training also builds loyalty and improves employer branding.

When employees work longer periods of time at your company, you don’t have to start from scratch with employee training.

This means that employee retention translates to fewer hiring expenses and accordingly lower training costs.

 5)  Better in-house experience

The longer an employee stays with a company, the better their skills and experience with your products and services.

On the other hand, hiring new employees means less experience and more hiring costs. New comers require on-boarding and training time as well as time to get used to their new team and manager.

By retaining employees, they get a longer professional in-house experience, which helps them become managers and leaders later on.

6)  Stable environment

Employees want stability. Especially as they age, gain more experience, and start families.

Every candidate wants to join a company where they can work for a long time without having to go through the hassle of job search.

A company that retains its employees, engages them, and supports their growth through workshops, training, and benefits, is one that creates a stable work environment.

It’s one that creates a company culture that makes employees stay and that entices newcomers to join and stay.

 7)  Better customer experiences

When employees care about your company and are loyal to you, they’re happier and more motivated. This allows them to offer better experiences for your customers.

The better experiences your customers get with your company, the more likely they are to stay with your company. In other words, a major benefit of employee retention is increasing customer retention and, accordingly, sales.

 8)  Better brand reputation

Many employers aren’t aware that they can get better branding by retaining and engaging their employees.

Employer branding is the reputation of your brand and company as a whole. It’s what makes potential customers buy from you and entices employees to join your company.

Companies suffering from a bad reputation struggle to hire new candidates because no one wants to join. Sometimes, candidates would join them as a ‘temporary stop’ till they find a better job or employer.

But companies that retain employees and support them with an effective compensation and benefits strategy enjoy better employer branding.

 9)  Higher employee engagement

Employee engagement and empowerment go hand-in-hand with employee retention. It’s a concept of building an emotional connection between a company and its employees.

Engagement makes employees enthusiastic, loyal, and more willing to contribute to a company’s growth and success.

It’s worth mentioning that focusing on employee engagement is one of the top HR trends for 2023.


10)  Having brand advocates

When employees feel valued by their employer, when they feel like a team, when their morale is higher, they become brand advocates.

They become excited about your brand and ready to share your achievements and news with others.

As brand advocates, employee become more likely to:

  • Recommend high caliber friends to join your company when a vacancy is available
  • Share your news – and their news with your company – on social media
  • Help newcomers feel at home at your company

How to retain employees in your company

how to retain employees in your company

Now that you know what the benefits of employee retention are, how can you keep employees at your company longer? Remember, you want them to stay because they want to. Because they find value in staying.

Here are a few ideas and tips:

  • Create an employee retention strategy including an employee retention program.
  • Ask employees about their needs and problems in your business.
  • Create partnerships to offer rewards and discounts at selected stores, and coffee shops…etc. Or provide them with benefits like discount cards they can use outside of work.
  • Have your HR team or specialists ensure that employees aren’t subject to burnout.
  • Provide your employees with incentives across their package.
  • Make sure you have an effective compensation and benefits strategy that’s inclusive of women’s needs and minorities.
  • Providing your employees with training has been known to increase employee retention and improve productivity.
  • Create a rewards and recognition scheme inside your company and within each team.
  • Give employees and teams the opportunity to choose where they work. This means providing flexible work options such as remote, hybrid, or from-the-office, if applicable and possible.
  • Having an HR strategy ensures you have a clear hierarchy and salary structure for your employees.
  • Use employee engagement and empowerment tactics to boost morale, engagement, and loyalty
  • Have team leaders and managers conduct one-on-one meetings with their team members to review their workloads and growth potential.
  • Ask employees about ways and ideas you can improve the business.
  • When hiring new employees, make sure you avoid the common mistakes employers make. This gives a good impression of your business early on.
  • Use psychometric tests to uncover employees’ underlying skills and see who has leadership potential.
  • Conduct employee assessments to keep employees on track and see where they need training or improvement.
  • Regularly review salary surveys to ensure you’re paying fair and market rates to your loyal employees.


Employees are the foundation of your business. If you mistreat them or treat them like they’re replaceable, they’ll leave. And they’ll tell others to avoid your company.

Put simply, if you don’t care for your employees, they won’t care about you.

Building and improving employee retention isn’t something that needs to be implemented in Egypt or the Middle East alone. It’s a global movement and it doesn’t happen overnight, it’s a process and a business mindset.

Employee retention begins when employers understand that their most valuable asset is their people, their employees as they do the job, drive the company forward, and solve its problems.

Finally, you now know the benefits of employee retention and we’ve provided you with some ideas on how to increase retention.

To make sure you’re increasing retention, you–or specifically your HR team–should track several employee retention metrics.

If you don’t have the capacity to measure those metrics, create an HR budget and HR strategy, or if you don’t know where to begin, contact us now, we can help you!

Tawzef is a recruitment agency and HR consultancy. We specialize in helping businesses find talents and build internal dynamics that increase employee retention so businesses can grow.




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