Which Companies Are Best at Retaining Workers? Here's Why Investors Like You Need to Know.

You might think that a list of the companies that are best at retaining workers is merely interesting. It's more than that, though, because companies that keep their workers longer have a competitive advantage, making them worth an extra look as potential investments for your long-term portfolio.

Here's a list of standout businesses when it comes to retaining staffers, along with some reasons you might give each a closer look.

Image source: Getty Images.

Why worker retention matters

So what's so important about employee retention? Lots of things. Here are some possible benefits of having workers stick around for a long time:

More-satisfied employees: If workers are sticking around, many of them are likely satisfied with their jobs, which can translate into higher productivity and better service to customers. (Imagine hating your job; you'll likely not be the most productive employee.) Having a bunch of satisfied workers can lead to a positive work culture, solid morale, and a more pleasant work environment.

More-skilled employees: When workers stick around for many years, they can become more valuable because they know much more about the company. This institutional knowledge can help them and their colleagues in their work. They know how things have been done, how to get things done, and who is good at what, among other advantages.

These folks can be especially deserving of being promoted from within -- which, in turn, can make newer employees see career paths they themselves might follow at the company.

More money: When workers stick around, that means the company has to spend less money and time recruiting new workers and then training them. It also means fewer jobs will be unfilled at any given time, which can heighten productivity and, therefore, profits. This is good for the company -- and, importantly, for investors.

In a 2021 study, researchers concluded that "...we find a significant association between turnover and future stock returns, suggesting that investors do not fully incorporate turnover information." The folks at greatplacetowork.com, which rates workplace culture, noted this year that "if you had invested in 100 Best Companies, you would more than triple what a similar investment might have earned in another portfolio."

Here are some more-specific findings on the matter, via Gallup:

• "Employees who are not engaged or who are actively disengaged cost the world $8.8 trillion in lost productivity, according to Gallup's State of the Global Workplace: 2023 Report. That's equal to 9% of global GDP."
• "The annual overall turnover rate in the U.S. in 2017 was 26.3%, based on the Bureau of Labor Statistics. The cost of replacing an individual employee can range from one-half to two times the employee's annual salary -- and that's a conservative estimate.
• So, a 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year."

The best companies at retaining workers

Below is a list of 10 companies excelling at retaining workers via visualcapitalist.com. It was compiled by reviewing the 100 largest U.S. companies (as measured by market capitalization) and ranking them by tenure.

Data source: visualcapitalist.com.

Why workers stick around

If you're wondering why such companies manage to retain many workers, look up their benefits. ConocoPhillips, for example, offers annual cash bonuses, health insurance, life insurance, and a company savings match of 6% of pay that's sometimes increased beyond 6%. These are just some of the benefits.

Altria offers similarly attractive benefits, with dental coverage up to $2,000 and orthodontia covered up to a $2,500 lifetime maximum. It even reimburses workers trying to have a family up to $35,000 for fertility treatments or surrogacy arrangements or adoption -- and an unlimited amount for infertility treatments for those with a medically diagnosed need.

Also available is paid time off to attend children's school activities. And a profit-sharing plan that it describes this way: "The Company will contribute from 13% to 17% of your eligible earnings, depending on Altria Group's earnings-per-share growth, even if you do not contribute to the Plan."

So next time you're on the hunt for stocks to invest in, try to find out whether your candidates are good at retaining their workers. Because if they are, that's a very promising sign. Retention isn't the only metric to assess, of course, but it can be a helpful one.