Best Employee Retention Strategies for Startups

Employee retention is one of the most important things a startup can do to ensure long-term success. This is especially vital for an outsourced HR company’s expansion and reorganization plans in Europe.

So many startups are run by incredibly smart, capable people who have great ideas – but little experience with the human resources side of running a business. At Europe HR Solutions, we talk to startup CEOs, founders, and executives who know that retention is important but really have no idea how to make it happen.

The best employee retention strategies are the ones that will keep you from losing your best employees for any number of reasons, from job dissatisfaction to tempting offers from competitors.

In this post, we’re going to walk you through some of the most effective retention strategies for startups, including several that you can implement right away!

Retention Strategy

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Why Is Employee Retention So Important?

Before we talk about how to retain your employees, let’s cover what makes employee retention so important in the first place.

  1. Employee retention is an indicator of the health of your company. High rates of turnover are a red flag that any manager or executive must pay attention to.
  2. High rates of attrition are expensive. Every time you have to hire a new employee – especially someone with unique skills or experience – there are costs to be counted. The search itself costs money, as does the hiring and onboarding process. Of course, reduced productivity is an issue, too. High turnover leads to longer periods of understaffing.
  3. Good retention rates are associated with higher revenue, increased productivity, more employee engagement, and better rates of employee expertise.

Your employees are at the heart of your business’s success, and constantly saying good-bye to them as they move on to other opportunities is disheartening and detrimental to your operations.

Why do startup employees leave their employers?

People leave their jobs for a lot of different reasons. However, there are usually some identifiable common threads.

For example, employees tend to leave for reasons such as:

  • Workplace dissatisfaction
  • Lack of opportunities to advance in the company or industry
  • Minimal professional development
  • Feeling underappreciated
  • Being underpaid for their work
  • Feeling overworked
  • Burnout
  • Poor management
  • Moving outside of the geographical area
  • Ready to change industries or career paths

As an employer, some departures can’t be prevented, especially if the person is leaving to pursue a new career path or life in a new country.

We know how hard it can be to say goodbye to a great employee, especially if it happens all the time. At a startup, poor retention can be especially detrimental to your operations.

Let’s take a look at some of the best strategies available for improving retention at your company.

Find Out Why Your Employees Are Leaving

Before you can take any action, you have to know why your employees are leaving. Let’s say a startup hasn’t chosen to keep up with competitive salaries in their industry. Retention is likely low because employees can go anywhere else and make more money.

If the executive team doesn’t know that compensation is why employees are leaving, they may choose to focus on the wrong retention strategies.

In fact, they may invest money into professional development opportunities, team building programs, and workplace culture – only to see the same numbers of people leaving. If they knew that compensation was the main issue, they could have invested those funds directly into their employees and solved the problem!

Step by step process in for employee development

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Provide Competitive Compensation

Compensation is at the very top of the list of reasons why employees leave their jobs. Even if a person loves their job, that doesn’t mean they can stick around forever if they feel underpaid or undervalued. It’s also that your employees have had the basics of gross and net pay explained to them, as those numbers often vary drastically.

If you haven’t assessed your compensation and benefits packages lately, now is the time.

Focus on Work-Life Balance

Startups are often run by incredibly committed, hard working people, and sometimes it can be tempting to disregard work-life balance. However, it is important to make sure your employees strike the right balance as part of your startup’s retention strategy.

Without a healthy work-life balance, though, employees become overwhelmed, stressed, and unhappy. Don’t forget to be intentional about creating work-life balance for everyone on your team, from the newest employee to your most senior executive.

Create Opportunities for Professional Growth and Development

What kinds of opportunities exist for the people in your company to learn, grow, and advance? Even a great job can feel like a dead-end if there is never any room for advancement.

You can create opportunities for your employees by providing paid training, tuition assistance, funds for professional development, industry conference fees, and so much more.

Another important part of this is making sure that employees know about these opportunities, including how they can move into leadership positions within the company. Employee retention improves when employees feel that they have a future with their company, especially if that company is a startup that is just getting off the ground.

Develop an Outstanding Workplace Culture

Is your company an outstanding place to work?

You can develop a great workplace culture by identifying what you value and then creating a workplace that lives up to those values.

Figure out how you want people to feel about your company. Is your culture warm and welcoming? Exciting and cutting-edge? Competitive and innovative? Chances are, it’s some combination of those things.

People stick around when there is a good match between their own values and the values of their workplace. Communicating your culture to job candidates is another important piece of this retention puzzle.

You may also find you can unlock employee potential with diversity and inclusion training, which can help to retain acquired talent.

A simple team building activity

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Practice Team Building

Take time to develop your teams as part of your retention strategy. As a startup, you will need to lay the groundwork for team-building so your team can learn to work together as a goal-focused unit.

Team building exercises can be as simple as group chats, friendly competitions, and goal-setting. It can also look like retreats or special events during the quarter or even just once a year.

The important thing is to give your employees a chance to get to know one another and feel like they are part of the team. One of the reasons people stay at a job is because they are benefitting from their friendship and connection with their colleagues.

Recognize Your Employees Consistently

Employee recognition plays an important role in making sure that people feel appreciated. Overlooked employees find other jobs!

One important part of any startup retention strategy is employee recognition, which can boost morale and improve employee retention.

Some ideas for recognizing your employees include:

  • Celebrating an employee’s achievements at a company-wide meeting
  • Give away company merchandise like T-shirts, mugs, bags, or notebooks
  • Cater a meal to celebrate a team’s hard work
  • Offer a surprise day of paid time off
  • Send out regular emails that announce your employees’ accomplishments
  • Offer bonuses and incentives for innovative and successful work
  • Handwrite a note of gratitude

Seek & Embrace Feedback

It’s one thing for the leadership at a startup to say, “We always want to hear from you about how we’re doing.” It’s another thing to consistently solicit feedback from your employees to find out how you could be doing better.

What’s even better than that? Making sure that their feedback is accepted with respect, healthy dialogue, and a listening ear.

Make sure your employees feel safe enough to share their opinions, and value those opinions enough to implement their good ideas.

Be Open to a Hybrid Workforce

Remote and hybrid work continues to be popular for many employees. If you are open to hiring fully remote or partially remote employees, you can address many of the issues that make people leave their jobs, like feeling stuck, being limited to one geographic area, or not having much flexibility.

Running a Startup Isn’t Easy. A Great HR Team Can Help.

Although you may be able to implement some of these ideas on your own, many startups need help evaluating and changing their policies to make the workplace better.

Europe HR Solutions offers fully customizable HR support for businesses in the European marketplace. We can advise you of the best employee retention strategies for startups and guide you through the process of implementing them in your organization.

Our team of HR professionals is made up of multilingual experts who understand the unique challenges of operating internationally. We can assist with or manage all of your recruitment needs, onboarding, employee training, professional development, benefits administration, compensation research, HRIS system implementation, coordination of European payroll, and, of course, employee retention strategies!

Contact us for a free consultation! We look forward to helping you hire – and then retain – the vital employees in your organization.

Business owner surrounded by paperwork, indicating the need for HR outsourcing

How outsourcing HR can save money

If you own a small or mid-sized business, you understand how frustrating it can be to spend time and money on tasks that don’t generate revenue. The costs of building an HR department from the ground up can prove astronomical. 

When you’re launching your small business in a foreign country, especially, you’ll need HR solutions before you open your doors for daily operation. Europe HR Solutions can help.


The right outsourced HR team can reduce your ongoing costs in the following ways:

  • Payroll administration:

By outsourcing your HR, you can bring in vetted professionals to set up and administer your payroll system. This team can train you to ensure a seamless transition after their service contract is completed. 

You won’t have to stress over hiring long-term employees to take care of payroll, or training payroll administrators.

  • Benefits implementation:

Your outsourced HR team can help you to select the right benefits software package and enroll the employees of your small business.

  • Human resources management:

Outsourcing your HR can prove to be a game changer for your overall human resources management, too. HR consultants contribute through a wealth of experience in compliance, employee relations, and recruitment.

This saves valuable time for small business owners, mitigates the risk of legal issues and delays in operations, and provides access to the latest industry best practices and trends.

When it makes sense to outsource HR for small businesses  

International companies with fewer than 50 employees are considered small businesses, and rarely expand to Europe with an inhouse HR team already in place.

For US and UK-based small businesses that launch European operations, there’s usually a CFO who oversees broad HR tasks. 

However, the CFO or other executives managing HR for a small business launch in Europe often lacks the country-specific legal and HR expertise necessary to ensure innovative solutions that reflect the country’s best HR practices and legal compliance.

It’s important to consider the following when determining whether or not you should outsource your HR:

  • What specific HR services and support does your business require?
  • Do you have anyone on your team who’s well-versed in country-specific employee regulations and labor laws?
  • Will you need management compliance training and support?
  • Will your current employment handbook, policies, and procedures translate to adhere to the needs of employees in different countries?
  • Do you have a small HR department in place that may need help implementing payroll, benefits, training, and development?
Time is money. Outsourcing HR saves time, letting you focus on what matters.

What to expect with Europe HR Solutions

By outsourcing your HR, you may find it’s easier to take care of your daily operations and to strategize and prepare for the launch of your small business in Europe. Europe HR Solutions has supported countless small, mid, and large-sized businesses in their international HR needs.  

Whether you need our team to manage your HR and implement solutions, or you need us to help guide the HR professionals you have on staff, we can sweat the small stuff to ensure your big picture remains intact. 

You can expect Europe HR Solutions to do the following:

Act as your representatives:

We’ll act as an extension of your small business. This means we will collaborate with you and ensure we’re promoting your vision and standards in any HR matters we handle for you.

Ad hoc requests:

We understand that you may have ad hoc requests. We’re used to fast-paced, high pressure situations, and will ensure your needs are met in a timely manner.

Assist with HR strategies:

We’re committed to providing HR services that help your business grow and succeed. We’ll make certain that the innovative solutions we offer adhere to your overall business and HR strategies.

Create and implement policies and procedures:

We’ll strategize with you to create and implement your company’s policies and procedures and ensure details are in place that will help your employees thrive and create a positive work environment.

Handle employee contract needs:

We’ll help to create and manage your employee hiring processes (including talent acquisition, interviews, and onboarding checklists), employee complaint procedures, performance reviews, and off-boarding processes.

Legal compliance:

Europe HR Solutions will use our thorough knowledge of the various nuances in employment regulations and labor laws to keep your operations, policies, and procedures within legal compliance. This will help reduce your liability risk should issues with employees arise.

Manage employee and management training and development: 

We can cover government-mandated and specific position training programs to support your employees to work with excellence and grow in their positions. This includes compliance training for managers.


We can utilize the latest in talent acquisition trends and industry best practices to make sure you attract the talent you deserve to fill your staffing needs. We want to help you to build the best team possible to create a positive work culture and  a productive team.

The cost of outsourced HR services for small businesses

When to outsource your small business’s HR could be determined by your available budget. The cost of outsourcing your HR may be an upfront expense, but in the long run, it can save you significant money and protect your revenue.

The services offered by Europe HR Solutions can vary in cost, and are dependent on the extent of service you require. We can determine the cost based on the scope of the project.

For example, you may need us to manage a specific, well-defined project that allows us to estimate the cost involved. However, you may require our services on a daily basis, for an extended period of time, or find you need support in an immediate HR emergency. This may mean we will need a retainer payment or charge for an hourly rate.

How to determine your HR outsourcing needs

Before you decide to outsource your HR, it’s vital to determine what type of services you require. It can be overwhelming to discern your needs, but reflecting on and strategizing about specifics can be beneficial.

Answering the following questions may help you to understand what services you require:

  • Do you need an outsourced HR professional who takes the time to know and understand your business, staff, and culture?
  • Do you need HR professionals who are available on a daily basis?
  • Are you in dire need of help with critical talent acquisition?
  • Do you require flexibility and a large scope of HR tasks?
  • Are your needs limited to legal compliance and knowledge?
  • Do you need help developing your workplace culture?
  • Do you need to overcome language barriers?
  • What are your long-term HR needs?

Other benefits of outsourcing your HR

Once you’ve determined when to outsource HR for your small business, you may find that it allows you to streamline your operations and focus on your overall business strategy.

This strategic move reduces your administrative burdens of managing payroll, benefits, and other HR tasks in-house. The cost-effectiveness of outsourcing becomes evident as it eliminates the need for investing in HR infrastructure and ongoing training. 

This newfound flexibility can enable your small business to adapt quickly to market changes and allocate resources more efficiently. Ultimately, an outsourced HR team becomes a strategic partner, and empowers you to prioritize your employees, enhance organizational efficiency, and thrive in the competitive European business landscape.

Contact Europe HR Solutions

Europe HR Solutions understands how crucial HR is to the foundation of any successful business. We can consult with you to determine when it’s best to outsource HR for your small business, and customize innovative solutions with you. 

Your HR needs remain our greatest priority, and we want to support you in ways that promote legal compliance and allow you to see your small business dreams come to fruition. 

Connect with Europe HR Solutions today for a free consultation and be sure to check out our blog for the latest HR insights, tips, and trends. The road to success for your small business is just an HR step away.

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    Inez Vermeulen

    Inez Vermeulen

    Inez Vermeulen is the Founder and CEO of Europe HR Solutions, with over 25 years of successful corporate and entrepreneurial experience in various global industries. She has helped grow and expand the European divisions of global companies such as Coca-Cola Company, Regus, DHL, American Medical Systems, etc. Inez has received several company awards for her entrepreneurial spirit and success.

    She owns a Bachelor’s degree in French, History and Latin, several HR global expert certifications, a Master’s degree in Metaphysical Sciences, ICF Coach Certification and has completed her Doctorate on Transformational Leadership. Inez is fluent in Dutch, English, French, Italian and German. She works in partnership with an extensive international network of independent & professional companies and resides in Belgium near Brussels with her husband Jan.