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The HR tech space is thriving. There are hundreds if not thousands of options to choose from when it comes to digital solutions made for HR.

You can see just how many tools exist by looking at Capterra, a popular software review site. The Human Resource Software category features almost 1500 results! 

That said, HR software falls into a few main categories; some examples:

  • Payroll software
  • Time and attendance tracking
  • Application tracking
  • Benefits management
  • Onboarding 
  • Learning management

With all these options, it can be difficult to understand which tech solution is best suited for your businesses. Or if your company is at a place where you can justify purchasing that solution.

10 Ways to Improve Your Employee Retention Rate Download PDF Now

Using the right tools to engage & retain employees

In the early stages, it's crucial to have the basics tools in place like HRIS or payroll software. For example, according to software advice, over half of buyers start to shop for payroll software when their business hits the 25 employee mark.

As your business grows, it will benefit from other types of HR solutions that are more focused on retention and engagement. 

To be clear: no software can instantly solve employee retention issues. However, these modern solutions can empower HR professionals with data and insights to make better decisions and help make employee engagement a priority.

That said, let's look at how some essential HR tools can help boost employee retention at each step of the employee life cycle. 

We'll give a summary of each tool and explain how it could benefit your employee retention efforts. Well, also give you examples of the most popular tools on the market for each category.

  • Recruiting and hiring tools
  • Performance evaluation tool
  • Employee survey tool
  • Rewards and recognition tool
  • Compensation management

This article will help clarify how digital tools serve to support HR and employee engagement at every stage of an employee's growth in your company.

Group-of-business-workers-smiling5 Tools You Need in Your HR Stack to Improve Employee Retention

1 - A recruiting tool to evaluate employee potential

Employee turnover is often due to poor hiring at the beginning of the employee life cycle.

In the most simple terms, the person hired wasn't the right fit for the job. A bad fit can be due to their personality or work experience. Sometimes people shine in interviews but don't live up to their in-person pitch.

In other words, old-fashioned interviews have some major drawbacks. They only show you a slice of someone's personality and character. 

Also, a slow recruiting process will result in losing top talent. High-demand candidates don't stay on the market for very long.

For example, a report by Talent Now shows that top candidates stay available for only ten days.

How these tools can help improve employee retention

This is where modern hiring tools come in to help recruiting professionals.

First, recruiting tools help speed up the hiring process, increasing the probability of keeping a high-demand and quality candidate.

Second, AI-empowered tools provide recruiting professionals with data. These insights sharpen decision-making, and as a result, lead to higher quality hires. 

Tools like Go Arya and Recruit Robin use AI to source talent from several online platforms. 

Apps like XOR and AllyO use chatbots to help recruiters automate the initial screening process, filtering through candidates faster and with higher precision.

Most importantly, tools like Psychometrica, Qualtrics, Teamscope help recruiters make sharper personality assessments. 

As a result, HR can make more informed decisions about the people they are hiring. Effectively bringing in higher-quality hires that are a better fit for their role and the company, and ultimately this results in lower turnover.

Business-People-having-one-on-one-meeting

2 - A performance evaluation tool to support career growth

Your new employee has made it through your hiring funnel and is now onboarded!

At this point, an organization should consistently show confidence in an employee's potential. This means putting the employee's best skills to use and actively developing their talent.

Sadly, when it comes to these efforts, many companies fall short.

Too often, companies don't give managers the tools, resources, or training to prioritize employee growth and development. And the old way of thinking -- employees as a means to an end -- still rules. 

It's no wonder that companies that operate under these outdated beliefs have such high employee turnover. For example, studies have shown that a "lack of challenge" and growth opportunities are the top reasons employees seek greener pastures.

That's why prioritizing intrinsic motivation is key to keeping employees engaged and interested in staying with your company. 

In other words, employees don't want to feel like a means to an end. Or else they will treat your company in the same way.

How these tools can help improve employee retention

Employees want their jobs to advance their personal and professional growth. Putting in place a performance evaluation tool is a significant first step to bringing this engagement initiative to life.

In short, managers must help employees understand what they are working towards. This applies to both the short and long-term goals.

Holding people accountable for precise goals gives them a sense of ownership and empowers them. Setting a benchmark also challenges them to improve their skills and abilities.

Several solutions exist to help communicate goals and transparently monitor their progress, not only across a team but the entire organization.

For example, tools like Lattice, Betterworks, BambooHr and 15five are common. These tools help managers establish performance benchmarks, track goals, and help employees get full transparency on the goals they are working towards.

Employee with head down at his desk

3 - An employee survey tool to measure satisfaction

Your new employee is no longer considered "new." They have been working for you for quite some time now.

But it's unclear whether or not the employee is truly happy. 

Managers are busy. They don't have much time to dedicate to regular 1:1 meetings. And long-form surveys can be time-consuming and complicated to administer. Many companies have abandoned them entirely. Or they only measure employee satisfaction infrequently, once a year, or less.

In short, executives only start to pay attention to employee happiness once turnover is high. 

It's not surprising to learn that companies who neglect to gather employee feedback suffer from high turnover. These organizations have no idea if their employees are satisfied!

How these tools can help improve employee retention


If you want to put the employee voice at the forefront, it's necessary to keep the company's finger on the pulse of workforce satisfaction.

In other words, setting your company up for success means giving employees a clear voice with the right tools. By tuning into employee sentiments, your company can prevent needless turnover. And most importantly, keep the talent your business needs to thrive.

For example, a Pulse Survey tool features questions that are pre-set to measure critical areas of engagement. These tools also offer detailed reporting features. In short, the application builds dashboards and interprets the data, so you can move past the data and take action.

Pro Tip: With the help of software like Applauz, you can administer Pulse Surveys and keep your finger on the pulse of how your employees are really feeling.

Other digital survey tools like TinyPulse and Qualtrics are popular for measuring employee engagement and happiness.

How Applauz Can Support Your Employee Retention Initiatives Download PDF Now

4 - An employee rewards and recognition tool

Your employee is making their way through their lifecycle. They are now a valued member of the company and their team.

But, suppose the employee feels the company is taking their loyalty and hard work for granted. Simply put, they feel underappreciated. In that case, it's precisely at this point that an employee is likely to quit.

Many leaders will jump in, proposing money as the best solution. They are hoping that a boost in pay will show an employee how much they are valued.

A boost in salary might provide a temporary fix. Money is a great external motivator. 

But, if the company doesn't address the underlying problem -- the employee's need for regular appreciation, in that case, the employee will continue to feel undervalued. And sadly, the problem will continue regardless of how much they get paid. 

How these tools can help improve employee retention

To that end, to show how critical appreciation is, author Leigh Branham analyzed vast data from exit interviews. She tells of her research and findings in her book The 7 Hidden Reasons Employees Leave

Interestingly, her research shows that only a tiny percentage (12%) of employees reported leaving their job for more money. 

A whopping 88% said that they left for a reason other than money. The most common reason cited was psychological, such as not feeling trusted or valued.

  • The implications of these findings are clear: showing employees regular recognition and appreciation is critical to employee happiness, and ultimately retention.

But asking managers to give more recognition is not the most effective way to promote this initiative. We all know that managers have to be held accountable. 

This is where reward and recognition software comes into play to build a company-wide culture of recognition.

A peer recognition program, like Applauz, is an essential tool to help businesses support appreciation. It gives employees a dedicated space to recognize each other with greater frequency and visibility.

As a result, HR can have a clear overview of manager's recognition efforts. But most importantly, the barrier to giving recognition and appreciation will be low. As the recognition tool will provide the structure employees, need to make recognition a priority.

5 - A compensation management tool

As employees grow in your organization, it’s important to understand if they are being compensated fairly. 

Of course, this can be simple to keep track of in smaller organizations. But if your company is growing and wishes to remain competitive in compensation. In that case, this tool can be a great asset to an HR team. 

Compensation management software allows you to answer these critical questions regarding employee compensation by analyzing internal factors such as employee performance,

company revenue and budgets. But also consider external factors like local job markets and currency fluctuation. 

How these tools can help improve employee retention


Ultimately, this tool will help HR optimize compensation for each employee. Effectively helping to position your company as a competitive employer and fostering employee retention.

A few examples of popular compensation management tools are CompXL, SimplyMerit, and Sage People.

Compensation management systems can also help with tricky HR challenges like determining the proper pay for unique roles in your organization that don’t exist anywhere else.

Final Thoughts

An essential task for any HR team is to pick the right tools for your tech stack. However, it's important to note that these tools help streamline work and minimize obstacles, so doing the occasional tech audit is recommended. 

In other words, you want to make sure each tool is delivering its intended value. And not creating more problems or more work for your HR team and employees.

If you handle these audits correctly, your resources and time should be going to the best technologies. Ultimately, helping advance your HR goals and overall business.

Guide: Employee Retention  Everything you need to know about retaining top talent in the workplace View Guide

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