Your worst nightmare just happened. You're two days into a much-needed vacation when you receive a phone message from one of your best employees telling you he resigns. There goes your vacation and instead of relaxing, you spend the time wondering what happened.

Sounds familiar? If you haven't lost a valuable employee without understanding the reasons, you probably know someone who has. Being taken by surprise by employees leaving is more of a common occurrence than you might think. Consider these statistics from Towers Perrin Global Workforce Study in 2005: only 17 per cent of Canadian workers reported being highly engaged with their jobs while 66 per cent reported being only moderately engaged and 17 per cent reported being fully disengaged.

Studies have put the cost of replacing an employee as high as 150 per cent of annual salary for hourly employees when you consider direct costs such as replacement and training, as well as indirect costs such as lower productivity. And if you think that the number one reason employees leave is for more money, think again. Monetary incentive is rarely cited as one of the top five reasons.

What causes employees to become disengaged and more likely to leave? The reasons employees leave companies often reveal the strategies needed to keep them. There are a host of reasons but there is one in particular that I think every business needs to pay attention to: company culture. Employee retention starts with a healthy one. Regardless of the size of your business, if you embrace a culture of respect, fairness and empowerment, and take a genuine interest in your employees' well-being, you're increasing the likelihood of keeping your employees.

Here are seven strategies to help you translate a healthy company culture into actionable steps:

Strategy # 1 - Walk your talk

Employees have a sixth sense and can smell "fake" a mile away. You can't say that employees are your most valuable assets and walk by without acknowledging them. You can't advocate openness of communication and not share your company's vision with the rest of your organization. Successful companies and business owners are authentic. What they say, feel, think and do perfectly match. Do a mental check before speaking and acting, and encourage the rest of your management team to do the same. Don't make empty promises; if you promise you will do something, do it. Ask for feedback and mean it. And if you ask for suggestions, act on them.

Strategy # 2 - Be fully engaged

An open door policy is one thing. Being fully engaged with your employees is another. Someone I know left his company because his boss hardly ever shared anything with him, whether it was the company's strategies or how well he was performing. Communicating regularly with your employees goes a long way. Take the time to know them, to know what excites them, what they like about their jobs, what challenges they have and how you can help them. One of the best ways to engage employees is to make them feel part of the big picture. Explain to them how their contribution impacts the company.

Strategy # 3 - Be proactive with employee development

Employees need to know how well they are doing. Sit down regularly with your employees and review their goals. Provide regular feedback. One mistake many companies, large or small, make is to view the performance review as a once a year event; instead make it a year-round practice. Set goals with individual team members at the start of the year. Follow up with steady support through coaching and possibly outside training. Check in at the mid-year point to ensure they're on track, and then meet again at year's end. See yourself as the coach of a team, asking yourself how can you help them realize their potential and by the same token help your company realize strong results?

Strategy # 4 - Allow people to learn and grow

Many companies shy away from empowering their employees for fear that the employees will not exercise proper judgment in making decisions. Too often, managers micro-manage and instead of allowing the employees to come up with their own answer to a problem, just tell them what to do. In his book The Four Pillars of High Performance: How Robust Organizations Achieve Extraordinary Results, Paul C. Light makes the point that giving employees authority to make routine decisions helps build strong performing companies. Studies have also shown a significant correlation between employee empowerment, employee satisfaction and company financial performance. Simple things like sending a team member to a trade show and then sharing the information through a presentation reinforce empowerment.

Strategy # 5 - Watch for the signs

Believe it or not, people have an "internal clock" that starts ticking louder as their need for change gets stronger. Some people have an urge to move on to another position despite the fact they like the company or their jobs. There's an HR assessment called The Inventory of Work Attitudes and Motivation that some companies use to measure how long people will do the same thing before feeling the need for change. In one case study a company was losing some of its best salespeople after two to three years. When asked why they wanted to leave at their exit interviews, the employees could not pinpoint any particular reason. They liked the company and were happy. After agreeing to take the assessment, results showed that these employees needed some changes after a period of two to three years. Once the company introduced some kind of change, such as handling a different territory, the retention of their salespeople increased. Regularly check your employees' level of motivation and enthusiasm for their job. (Review strategy # 2 and offer an alternative before they choose the option of leaving).

Strategy # 6 - Practice the Golden Rule

How do you want to be treated by the people around you? I'll bet it's not any different than how your employees want to be treated. For some reason, as people move into managerial roles, they often adopt a whole new set of beliefs that bosses must be tough. Far from the truth! Bosses, whether they are business owners, managers or supervisors, have a responsibility to model fair and respectful behaviours. Rude and demeaning behaviour is never a motivator. So while there may be times when you're frustrated by an employee's actions or behaviours, you'll be more likely to elicit a positive response by calmly discussing the problem in private and working together to come up with a solution. Choose the appreciative approach and show employees you truly care for their well-being. Appreciate their work and their own unique qualities. Say thank you.

Strategy # 7 - Create a fun environment

Research conducted at California State University showed that humour in the workplace increases employees' creativity and productivity, as well as decreases absenteeism. Involve your employees in deciding how they'd like their workplace to be more fun. Some ideas include scheduling mini time-outs to help relieve stress, a "joke corner" in the lunchroom or regular potluck/group lunches. What's important is that you enjoy yourself as well (remember strategy # 1).

All of these strategies are affordable and easy to implement. What it does cost is some reflection time to assess the culture of your company. Ask yourself some questions: What is our company's culture? Do my employees like coming to work? Your answers can mean the difference between a mediocre workplace with high employee turnover and an outstanding work environment where employees feel valued and inspired.