16 Employee Retention Strategies To Keep Your Talent Secure in 2025

The wave of the Great Resignation may have subsided, but employees keep on leaving. Quit rates hit 3.3 million voluntary separations in May 2025 alone. And each departure means recruiters must scramble to find a great replacement quickly to soften the blow to the company's productivity, culture, and bottom line.

At the same time, a weaker job market has created another retention challenge: Employees who are sticking around not because they’re happy, but because they feel stuck. They’re looking, but it’s tough out there. Retention here isn’t a win—these workers remain because they’re out of options. 

In contrast, successful retention happens when you create an environment where your employees are happy and thriving. 

This blog discusses why you must strive to improve employee retention in your workplace—the right way—and 16 effective retention strategies you can use. We’ll also provide a retention formula to track your efforts over time. 

What is employee retention?

Employee retention is an organization’s ability to hold on to its talent for the long haul so you’re not stuck in a cycle of constant recruitment. Retention forms the middle part of the employee lifecycle. Talent attraction, recruitment, and onboarding are the beginning stages of the lifecycle, but once your employees have settled into their roles and the organization, an employee retention strategy focuses on keeping them there for the long term. Usually, this involves committing to various growth, performance development, and company culture initiatives to give your employees reason to stay. 

Why is employee retention important?

Employee retention isn’t the only option on the table. It’s perfectly possible to hire someone, employ them for a little while, and watch them move on to another opportunity as you begin the hiring process again to fill their position. But there are tangible benefits available when you formalize your commitment to retention: 

• Enjoying lower employee turnover costs: Gallup reports it can cost up to 200% of a leader’s salary, 80% of a technical professional’s, and 40% for frontline staff to replace them. Wouldn’t you rather save this money?
• Improving team cohesion: Retention stabilizes team dynamics, builds camaraderie, and prevents disruptions caused by constant turnover.
• Increasing employee satisfaction: High retention fosters employee morale and engagement, while frequent departures can lead to stress, burnout, and job insecurity.
• Enhancing the customer experience: Consistent staffing gives customers the reliable service they expect, enabling them to build stronger relationships with your team that equal long-term loyalty. 
• Securing institutional knowledge: Long-tenured employees hold critical knowledge and context that isn’t easy to bottle or transfer to others. 
• Strengthening your employer brand: High turnover can damage your reputation and deter top talent, while strong retention signals a healthy, supportive culture.

16 effective employee retention strategies for leading companies

It’s unlikely that any single measure will radically improve a dwindling employee retention rate. Instead, combine several of the ideas below to create the best employee retention strategy that matches your company’s needs and values: 

1. Pay ample compensation
2. Equip your employees with lifestyle benefits
3. Offer flexible work arrangements
4. Recognize and reward your employees
5. Set up mentoring partnerships 
6. Commit to leadership development
7. Hire for cultural fit 
8. Invest in employee resource groups 
9. Promote workplace transparency 
10. Transform employee feedback into action 
11. Encourage employee engagement
12. Provide a strong onboarding experience
13. Standardize performance reviews
14. Be aware of burnout 
15. Offer strong perks
16. Provide an exit interview

Retention tip #1: Pay ample compensation 

Let’s start with the obvious: money. Most employees aren’t working for sheer passion; they need to earn money to live, and they’ll continue to get itchy feet until they work for an employer that compensates them well. 

Compensation is a top challenge for HR pros, with 44% of employers reporting that it’s their top concern. Similarly, a third of organizations identified unfair pay as the top reason they’re losing talent. Put simply: employees are motivated to find new roles where they’ll receive more competitive pay.  

Mitigate this risk by benchmarking your compensation offering against competitors in your industry. You might use a third-party benchmarking company to conduct the research for you. A budget-friendly alternative is to comb through job ads and compare salary ranges with your internal compensation data. 

Don’t be disheartened if your employee’s annual salary falls short of industry rivals. Remember that only one company can offer higher pay than everyone else. Aim to be at the 50th percentile or more, and you can always bolster your employee retention efforts by picking some of the other options on this list. 

Retention tip #2: Equip your employees with lifestyle benefits 

Offering a competitive benefits package is an easy way to attract and retain top talent. If your employees love using a certain benefit, it would be hard for them to turn their back on it, making this an important employee retention tip to implement. 

Of course, the best employers know there’s no such thing as one-size-fits-all benefits packages. Taking a customized approach allows companies to treat valuable employees as the individuals they are and retain them for longer. 

A lifestyle spending account is one option. This post-tax perk allows employers to provide their employees with a fixed monthly allowance, which they can spend on a range of eligible expenses that best suit their circumstances. For example, some employees might use their LSA funds for childcare; others might invest theirs in a professional development course. Other options include health and fitness, wellness, meals, family formation, and mental health programs, etc. 

Further reading: Check out our guide to launching a competitive lifestyle spending account program, including 7 steps for success. 

Retention tip #3: Offer flexible work arrangements 

The vast majority of employees don’t want to be restricted by the traditional 9 am to 5 pm structure. 80% of knowledge workers say flexible work is highly valuable to their work-life balance. Unfortunately, though, only 25% experience the level of flexibility they’re looking for in their roles. And fewer than half say there’s no expectation to answer emails or calls outside of working hours, contributing to this “always-on” culture that erodes personal lives. 

Position yourself to retain as many employees as possible, by offering arrangements like: 

• Remote and hybrid flexibility 
• Compressed hours
• Flexi time 
• Job sharing 
• Results-only work environments

Retention tip #4: Recognize and reward your employees 

Employees who work hard for your organization but don’t receive any praise or gratitude for their contributions are more likely to seek recognition elsewhere. 

Gallup tracked 3,500 employee career paths to understand the link between recognition and retention. Well-recognized employees were 45% less likely to have changed jobs over the two years. Interestingly, the quality of recognition also impacted employees’ decisions to stay or go. When employees receive high-quality praise, they’re 65% less likely to seek a new role compared to those receiving low-quality recognition. 

Companies can use a range of formal or informal recognition strategies to engage their employees. These include team meeting shoutouts or building a kudos wall, to using structured employee recognition programs like Benepass Rewards and Recognition. This approach enables companies to design their own policy, for example, rewarding events like birthdays, milestones, achievements, awards, and bonuses. Workers enroll directly through the Benepass platform and spend recognition funds on a range of rewards personal to them. 

Retention tip #5: Set up mentoring partnerships

Another way to prevent voluntary turnover is to set up mentoring partnerships between junior employees and seasoned professionals. This is an initiative followed by 57% of mature career development companies, according to LinkedIn’s Workplace Learning Report.

In successful mentorships, both parties should benefit from the arrangement. The mentee will be keen to enhance their professional development, while the mentor will be able to practice their teaching skills and perhaps even learn current trends and techniques from their mentee. 

Retention tip #6: Commit to leadership development

70% of mature career development companies offer leadership development programs, highlighting the importance of investing in the top level of our organizations. We’ve all experienced bad managers during our careers—those that don’t inspire or support us in reaching our full potential. 

Gallup’s research reveals managers or team leaders can be responsible for as high as 70% variance in employee engagement rates. It follows that a healthy leadership development program can ensure your organization has the right people to manage and encourage employee growth, reducing the risk of losing top talent. Leadership development might include training and development programs, mentorships, or executive coaching sessions. Whichever way you structure them, remember developing better leaders is a continual process—it doesn’t stop after a one-off training session. 

Retention tip #7: Hire for cultural fit 

A key part of retaining talent is making sure you’ve recruited the right people in the first place. This goes beyond hiring for qualifications, experience, or even skills—and we don’t say that lightly! Cultural fit also influences whether your employees feel like they belong as part of your organization and can thrive there. Strategic Head of People Emma Tolhurst explains: 

“Hiring for cultural fit is an essential aspect of building a strong business culture. This doesn’t mean hiring people with identical backgrounds or views but rather individuals whose values align with the company’s ethos and who will thrive within its environment. A diverse workforce united by shared values helps drive collaboration and creativity.” 

This means asking questions about their values, preferred work style, and problem-solving abilities during interviews. Following a structured interview process means you’ll ask the same questions to all candidates, making it easier to compare answers without bias creeping into your decision-making process. 

Retention tip #8: Invest in employee resource groups 

Employee resource groups are an important way to ensure every member of your organization feels welcome, regardless of their background, ethnicity, gender, parental status, sexual orientation, or any factor that may make them feel different from their colleagues. 

ERGs can be a powerful way for individuals to connect with others who share similar experiences and for the organization to better understand the needs of its employees. By offering group support, companies demonstrate they value diversity and inclusion, which is crucial if you want to retain employees. In fact, McKinsey’s research reveals 66% of employees rated their ERG as effective in building community within the organization. 

Create employee resource groups that are inclusive and open to all. Encourage members to collaborate, share their experiences, and offer support to each other. Finally, ensure a clear line of communication between ERGs and company leadership, so concerns can be addressed promptly. 

Retention tip #9: Promote workplace transparency 

Employers with a cloak-and-dagger culture, where it feels like key discussions happen in private behind closed doors, can be a turnoff for employees. Remember people are more likely to stay with companies where they feel informed and supported. In fact, 86% of leaders surveyed in Deloitte’s Global Human Capital Trends research say that the more transparent the organization is, the greater the workforce trust, and the lower the employee departures. 

Transparency can mean different things to different organizations. For example, companies like Buffer opt for pay transparency, where every employee’s salary, from the top down, is published on the company website. If this is too radical for your organization, you might consider other transparency ideas, such as: 

• Q&A sessions with company leadership 
• Team meetings where every team member shares updates and goals 
• Performance reviews that are open to employees inputting their feedback 
• Sharing company financials or performance metrics with employees 

Retention tip #10: Encourage employee engagement 

Disappointingly, US employee engagement has hit an 11-year low, according to Gallup. Workers turn up and go through the motions, but they’re not jazzed about their work, the company’s mission, or their part in it. Nectar’s research backs up this trend, with only 22% of employees achieving high levels of engagement. 

When the majority of an organization’s people feel disengaged, this has a two-pronged effect; first, those employees are a turnover risk—they’re likely actively looking for a new role, or could easily be swayed by the right opportunity. Second, disengagement is like a virus that sweeps through the ranks of your business, seriously impacting employee productivity. 64% of workers say that their experience is impacted when their peers are disengaged at work, according to Nectar. And once those dominoes start falling, even more people could quit. 

Companies can address both of these challenges at once by creating an environment that keeps employees motivated, connected, and heard. Here are a few ways to foster stronger engagement across your workforce:

• Encourage cross-functional teamwork: Build collaborative projects, including stretch assignments and shadowing opportunities that connect employees across departments and strengthen peer relationships.
• Involve employees in decision-making: Where appropriate, give employees a say in shaping workflows and policies, or even company initiatives.
• Check in on team dynamics: Regularly assess how teams are functioning, particularly the quality of collaboration and morale.

Retention tip #11: Transform employee feedback into action 

When you make transparency a priority, your employees are more likely to feel comfortable sharing their thoughts and opinions on various aspects of the organization without fear of repercussions. 

But it’s not enough just to collect employee feedback; it must be acknowledged and acted upon. Your employees want to know that their voices matter and that they’ve been heard. This leads to increased trust and engagement and can also identify blind spots within the company’s operations or culture that need addressing for future growth and development. It’s also a key factor to any employee retention strategy. 

Speaking on an HBR podcast, Ethan Burris, professor of management at the McCombs School of Business at the University of Texas at Austin, explains how some companies can find this difficult: 

“What we’ve found in our research is that when they get feedback, it’s really tough and challenging to turn that into substantive action that really makes a difference for how those organizations are run and what the employee experiences are. In a lot of ways, the ‘getting’ the feedback part is the easy part. The analysis and the challenges of making sense of all that data and then translating the action becomes the real challenging aspect of this entire employee listening ecosystem.”

Retention tip #12: Provide a strong onboarding experience 

If recruitment is the first impression an employee receives of your company, onboarding is the first real test of whether that impression holds up. It’s where expectations meet reality, and it can set the tone for long-term success if it’s done well. On the other hand, it’s the beginning of a fast exit if it’s done poorly. 

Case in point: 29% of new employees quit a job within the first 90 days. Often, it’s not because the role itself is wrong; it’s because they weren’t set up to succeed. Confusion around responsibilities, lack of support, and a weak sense of connection can quickly lead to disengagement.

To boost retention from day one, create an onboarding experience that empowers employees with confidence and a sense of community. Here are a few tips to strengthen your onboarding process:

• Set clear expectations from the start: Help new hires understand their responsibilities, goals, and what success looks like in their role.
• Equip them with the right tools and resources: Give your new joiners what they need to succeed, including software, access, documentation, and points of contact—on day one.
• Design a tailored experience for remote workers: Remote team members should never feel like add-ons or an afterthought. Make sure they feel fully integrated with their distributed teams by scheduling virtual meet-and-greets and pairing each with onboarding buddies to help them settle. 
• Support employees returning to the workplace: Whether it’s new parents, former contractors, or long-remote employees returning in-office, smooth their transition with flexibility and peer connection. 
• Build community early: Integrate social touchpoints into onboarding, such as team lunches, coffee chats, or cohort check-ins , all of which help people build relationships quickly.
• Check in frequently: Don’t assume silence means satisfaction. Follow up consistently during the first 30, 60, and 90 days to resolve issues before they snowball into a resignation letter. 

Retention tip #13: Standardize performance reviews 

88% of organizations are worried about employee retention, and the top strategy they’re turning to is learning and development, according to LinkedIn. 

But growth isn’t possible if your employees don’t know how well they’re performing or where they could improve. That’s where performance reviews come in, as a crucial space for managers to get together with their direct reports, and provide meaningful feedback. 

The problem? Performance management can be inconsistent. Manager A may provide structured weekly performance check-ins, while Manager B on an adjacent team does little more than shoot the breeze once a year. Manager B’s team members are understandably more likely to feel disengaged, and wonder if their career might progress better elsewhere. 

To support your employees’ career aspirations, you need a standardized approach to performance reviews—one that gives everyone, regardless of team or manager, consistent, actionable feedback. Clear expectations and thoughtful evaluation cycles show employees where they stand and how they can grow.

As for retention, when performance management feels structured and fair, wouldn’t you be more likely to stay where you feel valued and can envision a future? 

Retention tip #14: Be aware of burnout 

Some level of stress is part and parcel of working life, to a degree. Whether your employees are up against a deadline or need to acquire a new skill quickly, they might even benefit from the motivational boost offered by a little stress and adrenaline. 

But when stress and fatigue descends into full-blown burnout, this can be incredibly damaging for your employees’ mental and physical health. According to the World Health Organization (WHO), burnout is characterized by three key dimensions:

• Feelings of energy depletion or exhaustion
• Increased mental distance from one’s job, or feelings of negativism or cynicism related to one's job
• Reduced professional efficacy

When these feelings set in, it impacts your retention rate in turn. Currently, two-thirds of U.S. employees experience some form of burnout, caused by: 

• Having more work to complete than time to do it (24%)
• Lacking the resources or tools to do their job properly (24%)
• Experiencing financial stress tied to a poor economy that’s impacting their well-being at work (20%)
• Taking on too much work due to labor shortages in their industry (19%)
• Worrying how AI will impact their role (13%)

Employers can get on top of burnout and retain healthy, happy employees by: 

• Providing strong wellness programs that support employees with their mental and physical health. 
• Teaching their managers to watch for signs of burnout so they can help their team
• Encouraging employees struggling with burnout to provide feedback to prevent burnout cycles in the future

Retention tip #15: Offer strong perks 

Competitive compensation will get employees through the door, but thoughtful, flexible perks are often what make them want to stay for the long haul. Why? Because great perks signal that your company truly values its people beyond the paycheck.

Today’s talent expects more than free coffee and casual Fridays. They want meaningful, personalized perks that support their individual lives in and out of work. These perks create differentiation in the job market and help you stand out as an employer that cares. You only have to consider outdoor apparel retailer Patagonia’s famous “Let my people go surfing” perk, to see how an incredible act of flexibility can bolster an employer brand. 

Here are some other examples of perks that can increase employee job satisfaction and strengthen your retention efforts:

• Flexible work options, such as remote and hybrid roles, and flex hours
• Summer Fridays or compressed workweeks
• Parental perks, including fertility benefits, extended leave, and return-to-work support
• Unlimited PTO or generous vacation policies
• Gym memberships and wellness stipends
• Financial wellness programs 
• Stocked kitchens, free meals, and snacks
• Happy hours or regular team bonding events
• Pet-friendly offices or paw-ternity leave for new pet arrivals 
• Home office stipends for remote employees

Instead of prescribing any of the above to your workforce (after all, not everyone has a pet), why not let employees choose the perks that matter most to them via a Lifestyle Spending Account? 

Retention tip #16: Provide an exit interview 

Once an employee’s handed in their letter of resignation, it’s all too easy to call it quits on their employee experience. But your departing employees are one of the most valuable sources of intel you can tap into. 

Exit interviews give you the chance to understand what’s not working, and why people are choosing to leave. They can reveal blind spots in your culture, management, workload, or benefits that current employees might not feel comfortable voicing. Of course, not every employee will have the same set of peeves—and in some cases, you may even be glad they’re leaving your ranks behind. But when certain trends start to repeat across several departing workers, they become hard to ignore.

Make it easy for employees to share honest feedback on their way out. Ask clear, open-ended questions, and resist the urge to get defensive. Common reasons for leaving often include:

• Inadequate salary
• Perks and benefits that don’t meet expectations
• Feeling overworked or undersupported
• Limited career advancement opportunities
• Lack of recognition or appreciation
• Poor work-life balance
• Disengagement or boredom
• Frustration with management
• Concerns about the company’s direction or stability

You may not be able to change the mind of the person walking out the door, but you can listen to their insights and take action before more employees follow them out.

Benepass tip: It’s important to know why employees leave your organization, but it’s also interesting to learn why employees stay. Find out by pairing exit interviews with stay interviews to get the bigger picture. 

How often should we revisit and adjust our employee retention strategies?

To understand which of your employee retention strategies are effective, start by calculating your employee retention rate formula.  

Employee retention rate = (Number of employees at the end of a set time period / the number of employees at the start of a set time period) x 100 = retention rate percentage.

Example: If you started with 100 employees and ended with 90, your retention rate would be (90/100)x 100= 90%. 

Many companies choose to revisit their employee retention strategies on an annual or bi-annual basis. However, it’s also important to regularly monitor and adjust as needed throughout the year, especially in response to any industry shifts or major organizational changes. Keep track of any changes in turnover rates, employee engagement surveys, and exit interviews to identify areas for improvement. You may also want to seek feedback from current employees through surveys or focus groups to ensure your retention strategies meet their needs.  

Retain your top talent with Benepass

Benepass is the perfect partner for any company invested in retaining its people. Our modern benefits administration platform complements your retention strategy by offering employees a wide range of pre-tax and post-tax benefits, including our popular Lifestyle Spending Account. 

Ready to see how heightened employee engagement will positively boost employee retention? Book a free Benepass demo today and see firsthand how to lower employee turnover. Or connect with an employee benefits specialist at sales@getbenepass.com.