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Surveys & Engagement

Employee retention policy | Sample & best practices

Leapsome Team
Employee retention policy | Sample & best practices
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If you care about creating a supportive, psychologically safe work environment for employees, you’ll take the time to craft comprehensive policies around compensation, staff conduct, and diversity, equity, and inclusion (DEI). That said, don’t underestimate the importance of applying the same mindset to retaining your people.

An employee retention policy is a great way to formalize and standardize your processes for engaging staff, curbing turnover rates, and avoiding the difficulties 61%* of organizations encounter when trying to fill open positions.

But there are pros, cons, and best practices to consider before turning your retention strategies into a documented policy, and that’s what we’ll explore in this article. We’ll also leave you with a sample plan you can use as a starting point for developing your employee retention policy. 

*Hays, 2023

What is an employee retention policy?

An employee retention policy is a set of guidelines and procedures employers create to ensure employees feel fulfilled and satisfied at work and, ultimately, keep them at the company. It may detail specific initiatives the organization is taking to keep turnover low. 

For example, your retention policy might explain what kinds of career development, rewards and recognition (R&R), and flexible working arrangements you’ve put in place to offer a great employee experience.

These policies may also include employee engagement strategies and protocols that HR, people ops, and managers can follow when they notice an upward trend in churn metrics.

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Pros & cons of creating a retention policy

Documenting retention strategies in a formal policy drives alignment and fosters a sustainable work culture that encourages staff to stick around. Still, it’s essential to know the potential drawbacks of retention policies that are too rigid or outdated so you can develop a plan to address those concerns.

A photo of employees in a meeting, sitting around a table.

A retention policy can act as a guideline for managers and encourage skilled employees to stay with the organization


  • Reinforces your employee-centric ethos: According to LinkedIn’s 2022 Employee Well-Being Report, a company’s commitment to its values is one of the top drivers of healthy work culture. A retention policy not only acts as a set of guidelines for managers who want to engage their team members, it also demonstrates that the organization values and prioritizes its people. 
  • Promotes a culture of transparency: Leaders may hesitate to address the challenging realities of employee turnover and retention in a public policy. It means acknowledging underlying issues and accepting that people sometimes quit. Even so, staff needs to know you value their feedback on your retention strategies.
  • Provides guidelines for new managers: Competent, supportive leaders make a difference for employees. LinkedIn’s 2021 State of the Manager report revealed 94% of professionals find it important to have a manager who makes them feel like part of the team. And 91% say it’s vital for leaders to encourage learning and experimentation. Considering how fundamental managers are to the employee experience, having a retention policy that outlines strategies they can follow is essential.
  • Gives leadership specific instructions for handling high turnover: You can’t always prevent periods of increased turnover. Times of transition and instability — such as mergers, acquisitions, or restructuring — may cause staff to leave. In these situations, a retention policy can provide a contingency plan for responding to spikes in turnover.


  • Could discourage experimentation with retention strategies: Making your retention policy too prescriptive can deter managers and team members from exploring new strategies for engaging and developing people.
  • May not account for employee needs: Ideally, you should establish a retention policy during your company’s early stages. But if you fail to revisit it as you expand — and don’t ask for anyone’s input when revamping it — you may end up with an employee retention policy that doesn’t accurately reflect staff needs or preferences.
  • May lack compensation and promotion as retention incentives: Low compensation was the biggest reason employees left their jobs in 2021, followed by a lack of opportunities for professional growth. Your company may already have a compensation policy that details your remuneration philosophy, how you handle incentive compensation, and something similar for your promotion criteria. But if your retention policy doesn’t make sufficient reference to promotion or compensation, you're missing key ingredients for success.
  • Could give the impression you’re paying lip service to retention without action: If your retention policy doesn’t translate into tangible outcomes for your people, they might be disappointed and start seeing you as insincere or unreliable. 

6 best practices for effective employee retention policies

Photo of one employee shaking hands with another.

Employee feedback helps create retention policies team members appreciate

Effective retention policies don’t just provide you with strategies for combating employee turnover — they help you drive engagement and job satisfaction, even during times of stability and low churn. But how can you develop a retention policy that benefits both your staff and your business?

1. Consider your current company goals, targets & obstacles

If you create an employee retention policy just for the sake of it — without specific goals in mind — how do you know it’ll be a worthwhile investment for your company? Before you begin strategizing and designing your policy, consider popular strategic planning models to help identify your objectives and obstacles. 

For example, you might want to use the objectives and key results (OKR) framework to come up with your:

Your key results will help you determine what kinds of retention-related initiatives you need to undertake for the year, such as evaluating data, sending out relevant surveys, planning out your employee retention policy, or expanding your learning and development options. 

You could also conduct a SWOT analysis to examine your:

  • Strengths — You have skilled, competent managers who care about their team members.
  • Weaknesses — Your organization’s retention rates dropped by 5% last year.
  • Opportunities — The management team is open to exploring more creative ways to engage employees, including training and development opportunities.
  • Threats — The organization is currently in a merger with another company.

2. Ask for employee feedback

Direct staff input is vital for designing a people-centric retention policy. Engagement surveys, pulse surveys, and retention surveys are great ways to accomplish this. Include questions like:  

  • What’s your ideal work schedule?
  • What does your ideal remote work setup look like?
  • What could your manager do to make you feel more supported in your current role?
  • What kind of future do you see for yourself at this company?
  • What other responsibilities would you like to incorporate into your role?
  • What type of development or training would improve your performance?
  • What makes you feel recognized and appreciated?
  • Have you ever felt we didn’t communicate transparently? Describe the situation.
  • What can we do to make our internal communications more transparent?
  • What are your career goals? What internal mobility opportunities would interest you?
  • How can we make our company more accessible?
Photo of three employees conducting research together at a laptop.

Research the retention policies of similar-sized companies in your industry before drafting your own

3. Conduct competitor, peer & internal research

Follow the same research process you would when carrying out market research for competitive salary benchmarking. That means:

  • Focus on similar-sized companies in similar industries and locations. They’re more likely to have comparable retention resources to you.

  • Gather manager insights. Managers can access qualitative data from performance reviews, one-on-one meetings, team meetings, and team goals and OKRs, so they’re uniquely positioned to contribute to the retention policy design process.

  • Reach out to peers in your network. Talk to other managers and people ops professionals in your community to ask them for advice. You can also do an #employeeretention or #retentionpolicy search on LinkedIn to see what HR experts and thought leaders are writing on the subject.
💡 Looking for a place where you can connect and share knowledge with like-minded people ops and HR professionals?

Check out our People Over Perks Slack community, where you’ll discover more in-depth best practices and resources. You’ll even get access to live AMA sessions with leading people ops experts.

4. Identify stakeholders & get their support

Once you’ve drafted your retention policy, decide who will be responsible for carrying it out and putting it into practice. This task will likely fall to your managers and team leads, with guidance from HR and people ops. 

Before making your policy public, ask all stakeholders to review it and offer their feedback, thoughts, and concerns, so you can amend it if necessary. 

5. Inform employees about the new retention policy

It’s time to share the finished policy with team members via messaging channels like Slack, Microsoft Teams, or the communication platform that works best for your company. Explain what motivated you to create this new set of guidelines and why you feel it’s beneficial to share it with everyone.

Let staff know who they should contact if they have questions about your employee retention policy, and ask them to confirm when they’ve read and understood it.

Photo of an employee working in their office.

Review your retention policy yearly to ensure it’s up-to-date and relevant to your current goals and employee needs

6. Revisit your retention policy annually

Annual policy reviews are opportunities to confirm your retention plan is still relevant to your values, goals, and staff needs. Here are some questions to ask yourself in the process:

  • Has our policy been a success? Has it helped us retain employees?
  • Is our policy still relevant to our current goals?
  • Is our policy still relevant to our current financial situation?
  • Is our policy easy for employees to understand?
  • Is our policy straightforward and easy for stakeholders to carry out?
  • Is our policy a helpful resource for new managers?
  • Should we amend or update any sections of our policy?
  • Are the same stakeholders still responsible for carrying out our policy?

Employee retention policy sample

While no two companies have — or should have — the same retention policy, you can use this template as a jumping-off point for creating your own.

 “An important factor with employee retention is being aware it isn’t a one-size-fits-all approach. To really push it, your organization needs to have a plan for every individual. A company that really values its staff will have career plans and progression road maps, and ultimately want to see its people stay with the company for decades. If you can’t tell employees what they’ll be doing for you in two, three, or five years’ time, they’re more likely to want to leave.”

— Ed Johnson, CEO and co-founder of PushFar 


Briefly state your organization’s philosophy or mission statement, as well as your commitment to your people. Answer the question, “Why does retention matter to your business?” Then, mention how that influences your approach to employee retention. 

Purpose of the policy

Why did you create your policy? For example, you might explain that you designed it to empower managers and leaders with strategies and procedures for motivating and supporting their direct reports.

Who the policy is for

Your policy should be geared toward everyone at your company. Although team leads and HR professionals may rely on it the most, it should be easily accessible for anyone to read and review because it affects individuals at every level.

Your retention initiatives 

Go into detail about the measures you’ve put in place to increase employee retention, satisfaction, and well-being. What do each of those initiatives comprise, and how do they benefit staff? For example, discuss your practices around:

Your approach to times of transition & change

Discuss strategies you’ll enact when circumstances are out of your control and you need to weather a transition or tricky political or economic situation. This section is beneficial because employees will feel empowered to enquire about bonuses or promotions during periods of high turnover. It could also include an explanation of how you use the following approaches to hold on to your best talent:

How you’ll keep this policy updated

Last, explain how often you plan to review your retention policy and detail your process for updating it. This not only generates transparency around the policy, it also serves as a how-to guide for future managers and HR professionals responsible for auditing your company’s internal processes. 

Get the most out of your retention strategies with Leapsome

A retention policy is a great way to ensure everyone in your organization consistently follows your employee retention strategies. A truly effective policy can also strengthen your company’s reputation as a transparent, people-focused workplace. 

But, in addition to a formally established policy, you also need to provide tools that make the employee experience fulfilling and engaging for your teams. 

Leapsome can help with that. As a fully integrated solution for people enablement, our platform combines the tools you need for a holistic approach to team management, including our dedicated modules for Instant Feedback, Reviews, Goals, Meetings, Surveys, and Compensation.

💪 Don’t let your best talent slip away

Take advantage of Leapsome’s Surveys and Instant Feedback modules to identify and address areas where your staff may be disengaged. 

Book a demo

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Leapsome Team

Written by the team at Leapsome — the all-in-one people enablement platform for driving employee engagement, performance, and learning.
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