How to improve employee retention: 9 strategies for 2026

9 strategies to improve employee retention

1. Build real career development pathways

Career stagnation is one of the top reasons employees leave. When people don’t see a future at your organization, they’ll find one somewhere else.

The LinkedIn 2024 Workplace Learning Report found that 90% of organizations say employee retention is a concern, and that providing learning opportunities is the number-one retention strategy. Companies with strong learning cultures see 57% higher retention and 23% higher internal mobility compared to those without.

That’s not a coincidence. When employees have a clear path forward (through mentorship programs, learning stipends, internal mobility, or stretch assignments) they have a reason to stay.

What to do: Map out growth pathways for each role. Hold regular career development conversations (separate from performance reviews). Make internal mobility visible and accessible, not a hidden process.

2. Benchmark and adjust compensation regularly

Competitive pay is table stakes. Employees who feel underpaid don’t stay quiet. They start applying elsewhere.

Pay benchmarking should happen at least annually, using current market data. Pay transparency (being open about salary bands and how pay decisions are made) also builds trust and reduces the perception of inequity that can quietly drive attrition.

Total rewards matter too. Benefits, equity, bonuses, flexible time off, and wellness stipends all factor into how employees assess whether they’re being compensated fairly. Review the whole package, not just base salary.

What to do: Use tools like Glassdoor, Salary.com, or industry-specific benchmarks to verify your ranges are market-competitive. Communicate your compensation philosophy clearly so employees aren't left guessing.

3. Train managers to lead, not just manage

If there’s one lever with the most impact on retention, it’s manager quality.

Gallup has called it their most profound finding: managers account for 70% of the variance in employee engagement. When managers are disengaged or ineffective, their teams follow. When they’re strong, retention improves significantly. Gallup found that 54% of employees reporting to a top-quartile manager planned to stay at their organization two years out, compared to just 39% under a bottom-quartile manager.

Good management isn’t a personality trait. It’s a skill, and it can be developed. That means investing in regular one-on-ones, training managers to give meaningful feedback, and building accountability for engagement outcomes into performance expectations.

What to do: Don’t assume people are ready to manage just because they're good at their individual contributor role. Provide leadership and management training, especially for new managers. Track engagement scores by team and treat low scores as an actionable signal.

4. Create a culture employees actually want to stay in

Culture is often described in vague terms: values, mission, “the way we do things here.” But employees experience culture concretely: in how decisions get made, whether they feel included, how leadership behaves under pressure.

A culture that employees want to stay in is one where they feel a sense of belonging, where their identity and perspective are welcomed, and where the stated values match the lived experience. That’s not built through a poster in the break room. Instead, it’s built through consistent behavior over time.

HR.com’s State of Employee Retention 2025–26 found that 34% of employees cited engagement and culture as the primary reason for leaving their last job, making it one of the most actionable levers organizations have.

What to do: Audit your culture for the gap between what you say and what employees experience. Look at exit interview data and engagement survey themes. Invest in diversity, equity, inclusion, and belonging (DEIB) programs that have real accountability behind them, not just stated intentions.

5. Offer flexibility that works for real life

Remote and hybrid work have shifted from a perk to an expectation for many employees, especially those with caregiving responsibilities, long commutes, or health considerations.

Flexibility doesn’t necessarily mean fully remote. It can mean flexible start times, compressed workweeks, or async options for focused work. What matters is that employees have some agency over how and when they work, within what the role requires.

iHire’s 2025 Talent Retention Report found that flexibility was one of the most cited non-monetary retention factors, and that organizations offering expanded flexibility consistently outperformed peers on retention. Employees who feel their personal lives are respected are simply more likely to stay.

What to do: Survey your workforce on what flexibility looks like for them. Avoid one-size-fits-all policies. Where flexibility is constrained by the role, be transparent about why and look for other ways to build autonomy into the work.

6. Recognize and reward contributions consistently

Recognition is a low-cost, high-impact retention tool. And most organizations are still underusing it.

New longitudinal research from Gallup and Workhuman, which tracked the career paths of more than 3,400 employees from 2022 to 2024, found that employees who received high-quality recognition were 45% less likely to have left their job by 2024. Yet just 22% of employees say they receive the right amount of recognition at work.

Recognition doesn’t have to be expensive. Timely, specific, and genuine praise, from a manager, a peer, or a leader, is often more meaningful than a gift card. The key is consistency and sincerity.

What to do: Build recognition into your team rhythms, not just annual review cycles. Encourage peer-to-peer recognition, not just top-down. Train managers on what meaningful recognition looks like. It should be specific, timely, and tied to the work that actually mattered.

7. Listen through stay interviews and engagement surveys

Most organizations conduct exit interviews. Far fewer do stay interviews. And that’s a missed opportunity.

Exit interviews tell you why someone left. Stay interviews tell you what might keep someone from leaving. They’re proactive conversations, usually one-on-one with a manager, designed to surface concerns, motivations, and unmet needs before they become resignation letters.

HR.com’s State of Employee Retention 2025–26 found that organizations with the best retention outcomes are four times more likely to use stay interviews than their lower-performing peers (40% vs. 10%). Yet only 18% of organizations currently use them.

Engagement surveys serve a complementary role. They give you pattern-level data across teams and departments. Together, these tools let you act on what employees are telling you before it's too late.

What to do: Build stay interviews into your talent management calendar, at least once a year, ideally more. Use a consistent set of questions so you can identify themes. And critically: act on what you hear. Listening without action erodes trust faster than not listening at all.

8. Support employee wellbeing holistically

Burnout is one of the leading causes of voluntary turnover. According to Gallup’s State of the Global Workplace 2025 Report, global employee engagement fell to 21% in 2024, costing the world economy an estimated $438 billion in lost productivity. Stress, exhaustion, and disconnection are widespread, and employees who feel unsupported don’t stick around.

Holistic wellbeing goes beyond an employee assistance program (EAP) brochure in the break room. It includes mental health benefits that employees actually use, workload sustainability, reasonable working hours, and managers who model and respect boundaries.

What to do: Review your mental health and wellbeing benefits for accessibility and utilization. Address workload problems structurally. Don’t just encourage employees to “practice self-care” while expecting the same output. Normalize conversations about wellbeing at the manager level.

9. Invest in onboarding as a retention tool

Retention doesn’t start after the first year. It starts on day one.

Research from ClickBoarding found that companies with a structured onboarding experience see 44% higher new hire retention rates and a 61% increase in engagement. And Enboarder’s research found that 86% of new hires decide how long they'll stay with a company within the first six months.

That window is short. And organizations that treat onboarding as a box-checking exercise (a week of paperwork and a handful of meetings) are leaving a major retention opportunity on the table.

Effective onboarding connects new hires to the culture, sets clear expectations, introduces them to colleagues and mentors, increases collaboration, and opens up early career development conversations. Learning the job is only part of it. Feeling like you belong matters just as much.

How to know if your retention strategy is working

Implementing these strategies is only half the work. The other half is measuring whether they’re having an impact. Key metrics to track include:

• Voluntary turnover rate: the percentage of employees who leave by choice over a given period. This is your baseline signal.
• Time-to-fill: how long it takes to replace a departing employee. High time-to-fill compounds the cost of turnover.
• Employee engagement scores: tracked by team and manager, not just company-wide. Patterns at the team level often surface issues before they show up in aggregate data.
• Internal mobility rate: how often employees move into new roles within the organization. Low internal mobility often signals that employees feel their only option for growth is to leave.
• New hire retention rate: what percentage of employees make it past 90 days, six months, and one year. Early exits are a signal that something is broken in your hiring, onboarding, or culture.

Review these metrics regularly (at minimum quarterly) and connect them to the specific initiatives you're running. If stay interview data pointed to career development as a concern, and you've since launched a mentorship program, track whether retention improves in the subsequent quarters.

FAQ

What is the most effective employee retention strategy?

There’s no single strategy that works in isolation. Research consistently points to career development and manager quality as the two highest-impact levers. But recognition, culture, flexibility, and wellbeing all play interconnected roles. The most effective approach is a comprehensive one that addresses multiple drivers simultaneously.

How do you measure employee retention?

The standard formula is: (number of employees at end of period − number of new hires during period) ÷ number of employees at start of period × 100. Track this monthly or quarterly, segmented by department, tenure, and manager. Pair it with voluntary turnover rate to get a full picture.

What causes high employee turnover?

Common causes include limited career growth opportunities, poor management, insufficient compensation, weak culture or belonging, burnout, and a poor onboarding experience. Research from HR.com found that 34% of employees cite engagement and culture as their primary reason for leaving, which means culture isn't a soft issue. It's a retention issue.

How much does employee turnover cost a company?

Gallup estimates replacing an employee costs 50% to 200% of their annual salary. That figure includes recruitment, onboarding, training, lost productivity, and the institutional knowledge that walks out the door. For a mid-size company losing 20 employees a year at an average salary of $75,000, that's potentially $7.5 million to $30 million in annual costs.

What’s the difference between employee retention and employee engagement?

Employee engagement measures how connected, motivated, and invested employees are in their work. Employee retention measures whether they actually stay. The two are closely linked (highly engaged employees are far less likely to leave) but engagement is a leading indicator, and retention is a lagging one. Improving engagement is one of the most effective ways to improve retention over time.

Retention is a system: a set of practices, decisions, and investments that signal to employees that your organization is worth staying at.

The good news: most of the levers are within your control. Start by auditing where your organization stands on the nine strategies above. Pick one or two gaps to address this quarter. Build from there.

Ready to build a workforce people actually want to stay in? PowerToFly can help, from employer branding to talent strategy, our tools help organizations attract, recruit and retain top diverse talent.