To be the best, you have to keep the best. Over the last few decades New Zealand businesses have begun to recognise the unmatched importance of retaining your best workers, leading to increased investment in staff retention strategies.
But what exactly do effective employee retention strategies look like in NZ? In this guide we'll walk you through ten proven ways to ensure your best workers hang around.
Why staff retention matters in NZ
Staff turnover is disruptive and expensive: replacing a single talented worker can cost a New Zealand business tens of thousands of dollars - a figure that doesn't even account for the intangible losses, like the knowledge, expertise and workplace morale that walks out the door.
By reducing employee turnover, you bring stability to your workplace, which allows you to develop a strong company culture and boost employee job satisfaction.
According to Gallup, retention has a direct effect on profitability: businesses with highly engaged employees and low turnover rates are 23% more profitable than those with employees who aren’t engaged.
The evidence is clear: employee retention is good for business. So how do you boost it? By implementing the 10 proven strategies below.
Strategy 1: Strengthen your onboarding processes
Up to 20% of staff turnover occurs within the first 45 days of employment, and is often tied to the new hire feeling overwhelmed and underprepared for the job they've been hired to do.
By establishing a strong onboarding process that gives your new workers the tools they need to succeed, you can minimise this early churn.
Make a strong first impression
On a new employee's very first day, you should dedicate a large amount of time to getting them familiar with the basics of their new workplace via carefully crafted materials: slideshows, videos, checklists, etc.
You should assign the new employee a mentor who can guide them through the onboarding experience, and who can field any questions they might have.
NZ onboarding best practices
While the specifics of your onboarding process will be unique to your business, there are a few best practices that should guide your efforts:
Set clear expectations: Clearly define goals, timelines and role responsibilities on day one.
Provide a structured plan: Use a checklist or schedule for the first day, week, month and quarter.
Assign a mentor: Pair the new hire with an experienced colleague who can answer questions and provide support.
Define your company culture: Share your organisation's values, norms and expectations.
Strategy 2: Build a strong organisational culture
Speaking of company culture, can you describe yours? If not, you should work on this, because a clearly defined culture can create a healthier, more fun and more productive work environment.
Define and embed company values
Defining your company culture begins by describing the values that you align with and abide by. Here's how to create yours.
Identify your purpose and vision: Why does your business exist? Where is it heading? Your culture should align with the answers to both questions.
Engage the team: Gather input from your team members to understand what makes your workplace unique.
Identify core values: Pinpoint 3–5 authentic values that reflect what the company stands for and how it wants people to behave.
Define key behaviours: Translate values into actions (e.g. "we value collaboration" becomes "we give credit and share wins").
Document and communicate: Create a simple culture statement or guide, and share it widely, from onboarding to company-wide meetings.
Consider culture fit in NZ workplaces
The idea of 'culture fit' - that a person’s values, behaviours and working style should align with your existing company culture - is somewhat contentious.
The pro: an aligned workforce is a happy and productive workforce. The con: hiring for culture fit can lead to a homogenous team that lacks the diversity required to push the business forward.
You should work to balance cultural fits with hires that will bring different perspectives and thought processes to your business.
Strategy 3: Offer clear career development paths
The best employees will generally be highly motivated and ambitious. If they can't see an enticing future with your company, they'll search for it elsewhere.
Learning opportunities
Offer your team opportunities to learn new skills, whether through mentorship programs within your business, or through formal professional development from education providers.
Whether you subsidise or fully cover the cost of this training, it's an investment that can pay itself back handsomely, by giving top employees new skills and enhancing team productivity.
Promotion and upskilling
Investing in employee education can also help you to develop your leaders of the future. You should work to establish clear paths to promotion, as this shows top employees that their hard work will eventually pay off, which helps to keep them around.
Strategy 4: Foster open communication
Communication is key to keeping employees. If a top performer isn't happy, or is looking at other employment options, you need to know as early as possible, so you can take steps to retain them.
Regular 1:1s and surveys
Establish formal channels that guarantee regular communication, such as a monthly anonymous worker survey that checks the temperature of your team.
Better yet, hold monthly 1:1s between managers and employees that give the worker the opportunity to bring up issues and opportunities.
Feedback culture
Create a culture where giving and receiving feedback is normal, constructive and encouraged at all levels. Get your leaders to model open, respectful feedback, building it into everyday conversations rather than just formal reviews.
Train your staff on how to give and receive feedback effectively and empathetically, create a safe environment where workers feel comfortable speaking up, and act on feedback to show that this input can lead to real change.
Strategy 5: Recognise and reward employees
Everyone wants to be congratulated for a job well done, and doing so can seriously improve both employee morale and employee retention rates.
What motivates NZ employees
The simple act of recognising good work can be a very powerful employee retention strategy, as it's a surprisingly rare occurrence in many workplaces.
But you can make recognition even more powerful by adding material rewards, from a simple salary bonus to establishing a dedicated work perks program, like those we offer at 1Team.
Formal vs informal recognition
Recognition comes in two distinct flavours:
Formal recognition: Structured, planned and often tied to performance goals. Examples: employee of the month, annual awards, bonuses, public ceremonies.
Informal recognition: Spontaneous, personal and frequent acknowledgements of effort or attitude. Examples: a thank-you email, shout-out in a meeting, small gestures like coffee or a note.
The most successful companies offer both types of recognition to their employees, while ensuring that the significance of receiving this recognition is never diluted.
Strategy 6: Prioritise work-life balance
Work-life balance is critical to the health and wellness of your employees. If you don't offer it, another employer will.
Flexible working in NZ
NZ attitudes to flexible work have changed significantly over the last few years. COVID showed that many office jobs don't necessarily need to be office-bound at all, and even the traditional 9-5 could be tweaked as required.
If you're in a position to offer greater flexibility in terms of WFH or hours, doing so can greatly enhance your ability to retain your best workers.
Managing burnout and overtime
Your employees should face minimal overtime, and should be compensated for any overtime they do complete. They should be able to disconnect completely outside of work hours, to ensure they are properly rested and ready to attack the new work day or week.
Strategy 7: Strengthen leadership and management
Around half of all workers have left a job to "get away from their manager at some point in their career." The best talent will look to work with the best leadership, so you need to offer precisely that.
Manager training
You should offer your managers training on effective leadership: the strategies that help your staff be the best versions of themselves. A manager's ability to communicate, delegate, problem-solve and make strategic decisions will all contribute to a team member's experience of working for them. Beyond retention, upskilling your leaders can also drive broader success for your business, delivering incredible ongoing ROI.
Empathetic leadership
Empathy and emotional intelligence are arguably the defining characteristics of the best managers. While these traits can be learned, EQ is more often regarded as an innate attribute, so it's wise to prioritise emotional intelligence when hiring or promoting new leaders.
Strategy 8: Conduct regular stay interviews
Stay interviews are structured conversations between a manager and a current employee that are designed to understand why the employee chooses to stay with the organisation, and what could hypothetically cause them to leave.
Difference from exit interviews
Traditionally these sorts of discussions are always left too late: as part of an exit interview after an employee has chosen to leave. Stay interviews are a preventative treatment, offering workers an opportunity to voice any concerns early, and giving the employer an opportunity to remedy issues before they lead top talent to quit.
Sample questions
Stay interviews should be conducted semi-regularly, maybe once or twice a year. As part of these interviews, which are best treated as informal discussions, you should ask open-ended questions like:
What do you enjoy most about your job?
What would make your work experience better?
Do you feel as though you're a valued part of the team?
Do you feel your talents are being fully utilised?
What might tempt you to leave the company?
How can we better support your development or help you to achieve your goals?
Strategy 9: Promote internal mobility
'Where's this all going?' It's a question that high performing and ambitious workers will ask themselves regularly, so you need to give them a clear answer, by outlining their opportunities for internal mobility within your organisation.
Internal job postings
Whenever a new role opens up, you should promote it to your current team - whether through an email or as part of an internal newsletter - and allow them to apply. And by prioritising internal promotions over outside hires, you give your best workers a reason to stay, as their next step up the leadership ladder could be just around the corner.
Retaining talent through variety
On top of upwards mobility, you should also offer sideways movement too, for team members who might want to try something new or add a string to their bow. If a team member shows interest in or aptitude for another part of your business, they should be granted the opportunity to try it out or make a more permanent move.
Strategy 10: Measure and monitor retention
How do you know how well your employee retention efforts are working? By measuring and monitoring success. Here's how.
Key retention metrics
First, you need to track the right numbers. Key metrics for employee retention include:
Retention rate: The percentage of employees who stay over a specific period. Formula: (number of employees at end of period – new hires during period) ÷ Number of employees at start of period × 100
Turnover rate: The percentage of employees who leave over a set period. Formula: (number of employees who left during period ÷ average number of employees during period) × 100
Voluntary vs involuntary turnover: How many workers left by choice vs how many left due to termination or restructuring (to separate employee satisfaction from performance issues).
Early turnover rate: Percentage of new hires who leave within the first 3, 6 or 12 months. High early turnover can point to onboarding or cultural issues.
Average tenure: The average time employees stay with your organisation. This metric should be tracked over time to understand if tenures are increasing, decreasing or holding steady.
Slightly more intangible insights, like the feedback you receive during exit and stay interviews, can be invaluable too, by revealing a range of trends and potential issues.
Benchmarking against NZ industry standards
Gain further insight into your retention numbers by checking how they compare to the average for your industry - data that is available from official government sources like Stats NZ and the Ministry of Business, Innovation and Employment (MBIE). This gives your numbers much-needed context, as average turnover rates for certain industries (hospitality, retail, call centres) are far higher than others (the public service, education, professional services).
Retain your best workers with 1Team
Effective retention strategies come in many shapes and forms. But one of the simplest and most effective is to recognise and reward your best workers, as everyone appreciates a pat on the back for a job well done.
At 1Team we specialise in helping New Zealand businesses grant high performing team members access to a range of perks, such as savings from New Zealand's leading retailers (Torpedo7, Dulux, Pita Pit, Hirepool, Repco, Warehouse Stationery), all delivered through an app with your branding.
In the process we give your best workers yet another compelling reason to stay.
If you're ready to minimise churn while enhancing engagement and the employee experience, get started with 1Team today.
