10 employee retention strategies to improve engagement and reduce turnover

Employee turnover presents significant challenges for organizations, impacting both financial performance and team stability. Replacing an employee can cost between 50% to 200% of their annual salary, factoring in recruitment, training, and the loss of institutional knowledge. Beyond these financial strains, high turnover disrupts team dynamics and lowers overall morale. According to a recent Gallup report, 49% of U.S. employees are actively seeking new job opportunities, underscoring the need for robust retention strategies.

Leaders are also feeling the pressure. In 2023, a study revealed that more than 50% of managers reported burnout, which directly affects their ability to foster employee engagement and loyalty. To counter these challenges, organizations are increasingly implementing innovative employee retention strategies.

For example, Big Lots introduced “The Beat,” a custom-branded communication platform that gives associates immediate access to training content via mobile devices. This initiative has improved employee performance and engagement, driving higher employee retention rates across the organization. Similarly, Raising Cane’s launched the “1LV Crew” platform to connect employees across 560 locations, fostering a sense of community and belonging that strengthens workforce satisfaction.

AGCO offers another compelling example by reimagining its onboarding process with automation, personalization, and integration, ensuring employees feel valued from day one. This strategy not only attracts top talent but also cultivates loyalty throughout the employee lifecycle.

How can your organization build a workplace that keeps top talent engaged, motivated, and committed?

What is employee retention?

Employee retention is the ability of an organization to retain its workforce by creating a work environment that promotes satisfaction, engagement, and loyalty. It involves strategies like competitive compensation, meaningful recognition, career development opportunities, and a strong company culture to minimize turnover and keep employees motivated. High retention rates lead to lower hiring costs, improved team morale, and greater organizational stability.

The importance of employee retention

Employee retention is critical to an organization’s success, directly influencing financial performance, workplace culture, and overall productivity. Retaining top talent keeps teams strong, reduces disruption, and builds momentum toward long-term goals. When employees stay, they bring with them their expertise, institutional knowledge, and the deep relationships they’ve built with colleagues and customers. This continuity strengthens operations, drives innovation, and ensures consistent service delivery.

Beyond operational benefits, retention is a key driver of workplace culture. Employees who feel valued, recognized, and supported are more engaged, motivated, and loyal. This commitment creates a ripple effect, boosting morale and fostering a collaborative, high-performing environment where people thrive. A culture of retention doesn’t just benefit current employees—it also attracts top talent, showcasing the company as a place where people want to build their careers.

Retention is also vital in today’s competitive labor market. High turnover disrupts team dynamics, drains resources, and impacts customer satisfaction. Conversely, when companies focus on keeping their best people, they improve stability and productivity while signaling that they prioritize their workforce’s well-being. It’s not just about minimizing departures—it’s about retaining employees by creating a workplace where they’re excited to stay and grow.

Belonging drives engagement

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Effective employee retention strategies

So how can you take meaningful steps to keep your top talent? Below, we’ve outlined effective employee retention strategies to help you strengthen loyalty, boost engagement, and answer common employee retention strategies FAQs.

1. Enhance compensation and benefits

While compensation isn’t always the top reason employees stay or leave, it undeniably plays a critical role in retention. Competitive pay and benefits show employees that their contributions are valued and help build trust and loyalty. If your compensation packages don’t reflect industry standards, you risk losing top talent to competitors who are willing to meet or exceed expectations.

Here’s how to ensure your offerings stay competitive and compelling:

• Benchmark your industry: Regularly research salaries, benefits, and perks offered by companies in your sector. Staying informed about market trends ensures you’re meeting employee expectations.
• Reevaluate current packages: Audit your compensation packages to identify gaps or outdated practices. Are you offering employee benefits that matter most to employees, such as mental health support, parental leave, or tuition assistance?
• Incorporate non-monetary perks: Beyond paychecks, flexible work arrangements, professional development opportunities, and recognition programs can make a big difference in employee satisfaction.
• Adapt to changing needs: The workforce is constantly evolving. Regularly revisit and update your compensation strategy to address new priorities and expectations.

Transparent communication matters: Employees need to understand what’s available to them. Clearly communicate updates to compensation policies and explain how these changes align with their needs and contributions.

Ultimately, your Employee Value Proposition (EVP) ties it all together. A strong EVP reflects not just what your company offers employees, but also the culture and mission they’re contributing to. Learn more about crafting an impactful EVP.

2. Improve the onboarding process

The first impression matters—especially when it comes to onboarding. Shockingly, nearly 33% of new employees leave their jobs within the first 90 days, with poor onboarding experiences often to blame. Addressing this can significantly boost your organization’s employee retention rate and set the foundation for long-term success.

Here’s how to elevate your onboarding process:

• Make it structured and personalized: Onboarding should be more than a one-size-fits-all checklist. Tailor the process to the needs of each role, ensuring employees feel prepared and supported from day one.
• Foster connections early: Introduce new hires to their teams and mentors through meaningful interactions. Building these relationships early fosters a sense of belonging and camaraderie.
• Streamline with technology: The Firstup platform offers intelligently-powered onboarding journeys that help to reduce digital overload and sustain your workforce while connecting the employee experience, unlocking real-time intelligence, and delivering personalized communications at scale.
• Set clear expectations: Ensure every new hire understands their role, goals, and how they contribute to the organization’s mission. Clear expectations reduce confusion and build confidence.
• Solicit feedback: Continuously improve your onboarding process by asking new employees about their experience and acting on their insights.

For additional insight into the importance of onboarding, check out Why CEOs need to care about onboarding or download our guide, The ultimate onboarding checklist for the comms-driven HR leader.

3. Prioritize a healthy work-life balance

Workers today expect an equal work-life balance more than ever before, especially amongst younger workers like Gen Z. Whether due to cyclical changes in how work is done or brought on by the pandemic, a positive working environment that focuses on the needs of an employee and providing such things as flexible hours, opportunities for remote work, employee well-being, modern technology, and respect for personal time, shows that the working world has changed.

For example, a recent survey by FlexJobs found that 57% of remote workers would “absolutely” look for a new job if they were not allowed to continue working remotely. This underscores the critical importance of flexibility in employee retention.

How to foster a supportive work environment:

• Offer flexible scheduling: Allow and encourage employees to adjust their work hours to better accommodate personal commitments, enhancing job satisfaction and reducing burnout.
• Provide remote work options: Embrace hybrid or fully remote work models to give employees control over their work environment, which can lead to increased productivity and loyalty.
• Promote employee well-being: Implement wellness initiatives and employee assistance programs to support mental health, offering resources that help employees manage personal and professional challenges.
• Respect personal time: Cultivate a culture where employees are not expected to engage in work communications during off-hours, reinforcing boundaries between work and personal life.

By addressing these needs, organizations can create a more supportive environment that fosters engaged employees and reduces burnout. For more insights on engaging Gen Z in the workplace, explore our comprehensive guide: Everything Guide to Motivating Gen Z in the Workplace.

4. Build a healthy company culture

Building a healthy company culture is essential for attracting and retaining top talent. Recent data indicates that 88% of job seekers consider a company’s culture vital to its success, and 46% view it as a crucial factor when deciding where to apply.

Diversity, Equity, and Inclusion (DEI)

Current employees also prioritize workplaces that foster open communication, teamwork, and transparency. They seek environments that use inclusive language and uphold dignity, respect, and equity. Organizations must invest in DEI initiatives to retain valuable team members. For actionable strategies, explore our 15 Ways to Improve Diversity and Inclusion in the Workplace.

Inclusive language plays a pivotal role in shaping company culture. Adopting language that reflects and respects diversity ensures all employees feel valued. For guidance, refer to our Inclusive Language Glossary.

“Aligning with Gen-Z’s expectations around diversity, equity and inclusion is crucial for employers. Investing in cultivating a diverse environment, advocating for equity and fostering an inclusive culture will yield dividends in the form of engaged and productive Gen-Z employees who stay for the long haul.”

Forbes

5. Improve employee satisfaction, appreciation, and recognition

Recognizing employees’ contributions is crucial for fostering engagement and reducing turnover. Appreciation should extend beyond business achievements to include personal milestones, teamwork, and efforts that surpass job expectations. Notably, 32.4% of employees have left jobs due to toxic or negative work environments, and 30.3% because of poor company leadership.

Regular positive feedback and rewards—such as extra days off, free lunches, or social media mentions—can significantly increase employee satisfaction and motivation. For strategies on fostering a culture of recognition, explore our guide on creating a culture of employee recognition.

6. Encourage creativity

Your employees are often your most valuable source of innovative ideas. They know the ins and outs of your business better than outside consultants or new hires ever could. Encouraging creativity not only taps into this knowledge but also signals to your team that their ideas and feedback are valued. This trust and empowerment can play a pivotal role in your overall employee retention strategy, fostering engagement and loyalty.

A proven way to cultivate creativity is to promote open, two-way communication between leadership and employees. When employees feel heard, they are more likely to share innovative ideas and solutions that can benefit your organization. Establishing platforms for idea sharing—whether through regular brainstorming sessions, innovation hubs, or digital tools—creates a culture where creativity thrives.

For practical advice, explore our guide on implementing a meaningful employee listening program. Such initiatives can open the door to transformative ideas while making employees feel truly valued as contributors to your company’s success.

7. Focus on manager training

The recent headlines about “quiet quitting” weren’t necessarily about disengaged employees—it was often about ineffective management and a lack of employee satisfaction. According to Harvard Business Review, the least effective managers have three to four times as many employees quietly disengaging compared to their top-performing counterparts. In contrast, the most effective leaders inspire 62% of their direct reports to consistently go above and beyond.

Why management behavior matters

Employee retention and satisfaction are deeply tied to management behavior. A 2024 report from The Hill found that 70% of U.S. workers would consider leaving their job because of a bad manager, highlighting the connection between leadership behavior and employee job satisfaction.

How to empower managers for success

To retain top talent, organizations must train managers to communicate effectively, foster collaboration, and inspire their teams. Great leaders foster positive work environments by leading with empathy, delegating effectively, and accepting constructive feedback. They build trust and transparency within their teams and model the behaviors they expect from their employees. To create a culture of engagement and retention, organizations must:

• Provide leadership training: Equip managers with the professional development skills to communicate effectively and inspire their teams.
• Encourage collaboration: Teach managers how to build trust and foster teamwork through open communication.
• Offer ongoing support: Regular coaching and access to leadership tools can help managers grow and adapt.

By investing in manager development, companies can significantly improve employee retention, boost employee engagement, and create a thriving workplace culture.

8. Avoid drastic, sudden changes

Hasty, unplanned changes don’t go unnoticed by employees—and they can often do more harm than good. While change is an inevitable part of any organization, it’s also a significant source of stress, contributing to employee turnover and burnout. Constantly shifting direction or rolling out new products or services too quickly can disrupt workflows, confuse priorities, and ultimately lower employee morale.

That’s not to say change should be avoided altogether; adapting and evolving is essential for growth. However, when change is forced or poorly communicated, it can create resistance among employees and undermine retention efforts.

To minimize the negative impact of organizational changes, prioritize thoughtful communication and collaboration. Engage employees early by requesting feedback, involving them in decision-making, and offering robust training and support for new initiatives. Gradually implement changes whenever possible, and avoid making adjustments solely for the sake of change. These strategies can foster a supportive environment where employees feel equipped and motivated to adapt.

9. Offer employees the opportunity for advancement

Instead of consistently looking outside your organization for new hires, consider the untapped potential of your current workforce. Employees who are already part of your team understand the business, align with its goals, and bring institutional knowledge to the table. By focusing on internal career growth, you not only save on hiring and training costs but also foster loyalty, engagement, and a culture of mutual investment.

Here are actionable ways to create pathways for career growth and professional development, and boost employee retention:

Design and implement an internal talent management program

An internal talent management program can help identify high-potential employees and provide structured opportunities for growth. This might include leadership development tracks, cross-training programs, or rotational roles that allow employees to explore different facets of the organization.

Create and communicate advancement opportunities

Your employees need to know that advancement is not just a possibility but a priority for your organization. Instead of relying solely on an external hiring process, focus on creating opportunities for internal career growth to retain top talent and reduce costs.

Offer educational opportunities and tuition reimbursement

Investing in your employees’ education shows your commitment to their personal and professional growth. Provide access to professional development workshops, certification programs, or even tuition reimbursement for formal education. These initiatives not only upskill your team but also increase job satisfaction and loyalty.

Provide feedback and evaluations

Regular employee feedback is a cornerstone of professional growth. Encourage employees by acknowledging their strengths and offering constructive advice on areas for improvement. Honest and consistent evaluations can help them chart a clear course for advancement within the company.

Foster mentorship opportunities

Pair experienced employees with those seeking to grow in their roles. Mentorship programs can build a sense of camaraderie and help employees develop new skills, which plays a critical role in retaining employees and fostering loyalty.

Creating clear paths for career growth is more than just an employee retention strategy—it’s an investment in the future of your organization. By helping employees see a long-term future with your company, you’re building a culture of employee engagement, loyalty, and innovation that will attract top talent while retaining your best people.

10. Conduct exit interviews you can learn from

Employee departures are inevitable, even for the best organizations. People move on for various reasons, and many employees leave because of dissatisfaction with leadership, lack of growth opportunities, or workplace culture. While saying goodbye is never ideal, it’s also an opportunity—exit interviews can provide actionable insights to strengthen your employee retention strategy and improve the experience for those who remain.

When an employee decides to leave, are you asking the right questions to uncover why? Exit interviews and employee surveys are powerful tools to uncover patterns of dissatisfaction, identify organizational blind spots, and refine retention strategies. According to Indeed’s guide to exit interview questions, these conversations can serve several vital purposes:

• Uncover areas for improvement: Gain candid feedback about what isn’t working—from leadership styles to workplace culture—so you can make meaningful changes.
• Leave a positive impression: Ensure departing employees feel appreciated and respected, leaving the door open for future collaboration or referrals.
• Retain talent where possible: Occasionally, exit interviews reveal issues that can be resolved, giving you a chance to retain a valuable employee before they leave.

It’s important to view exit interviews not as a reactive measure but as part of a broader strategy to reduce employee turnover. By acting on the insights shared in these conversations, leadership can create a more supportive, engaging workplace that prevents the next resignation before it happens.

Every departure is an opportunity to improve. A thoughtful, well-conducted exit interview can provide the clarity needed to strengthen your culture, boost retention, and ensure employees—both current and former—feel valued and heard.

Retain your talent, build your future

Employee retention isn’t just a strategy—it’s a commitment to your people and your organization’s future. With today’s workforce empowered to demand more from their employers, businesses must rise to the challenge of providing better compensation, a positive company culture, and a work environment where employees feel valued. Proactively implementing retention strategies, including efforts to train managers and foster engagement, ensures that your organization is ready to meet the challenges of today’s workforce.

Don’t let your most valuable resource—the people driving your success—walk out the door. By offering meaningful recognition, opportunities for growth, and a culture that truly cares, you can create an organization where employees want to stay and thrive.

Firstup is the first intelligent communication platform, empowering companies to connect their employee experience ecosystem, personalize the employee journey, and uncover insights that enhance engagement, productivity, and retention. Start building a workplace where every employee feels supported, heard, and motivated to give their best.

Discover how Firstup can help you transform your retention strategy into a competitive advantage, making every moment count in your employees’ journey.