10 Employee Retention Strategies To Keep Your Talent Secure in 2025

The wave of the Great Resignation may have subsided, but employees keep leaving. Quit rates have increased again, hitting 3.3 million voluntary separations in October 2024 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.

This blog discusses why you must strive to improve employee retention in your workplace and 10 effective retention strategies you can use to keep your employees happy and thriving. 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 they’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: 

Reducing the cost of employee turnover 

The aim for most companies is to increase its retention rate and decrease its turnover rate to save on the cost of recruitment. And these can be hefty savings, depending on the position. Gallup’s research highlights these costs as: 

• Leaders and managers = 200% of their salary 
• Technical professionals = 80% of their salary 
• Frontline staff = 40% of their salary 

Frustratingly, the same study highlights that when employees quit, 42% of this turnover is often preventable but ignored. 

Improving team cohesion 

Familiar faces, confident in their roles and ready to support one another, are a recipe for solid teams. When employees constantly come and go, teams can feel disjointed, and it can be tough to establish a strong sense of camaraderie. Retention raises employee morale and ensures consistency in the workplace, with fewer changes in team dynamics that could disrupt productivity. 

Increasing employee satisfaction 

When employees see their colleagues leaving regularly, it can create an atmosphere of uncertainty and job insecurity. People may feel stressed by picking up their departing team members’ workloads, and the general sense of negativity can spread like wildfire throughout a department or branch. 

The opposite is also true: when retention is high, you’ll boost employee job satisfaction, employee morale, and engagement—all the good things. 

Enhancing the customer experience 

Familiarity within your teams isn’t the only advantage of retaining talent—customers also crave consistency. If they have a favorite frontline staff member they love interacting with, who suddenly disappears and is replaced by somebody else, this can impact the customer experience. The new employee won't yet know their preferences, and the customer may not receive the same level of service they were used to.

Securing institutional knowledge 

Employees who have served your company for many years or played a large part in key projects will have brains packed full of institutional knowledge. They’ll know the ins and outs of your business processes and will have insight into why certain decisions were made. Ideally, you’ll have the most important information documented, but retaining these key staff members ensures your employees are ready to apply their knowledge in their daily work. 

Strengthening your employer brand 

Recruitment and retention are two sides of the same coin. An inability to hang onto your talent could also dissuade the best of the best from joining you. Job seekers typically conduct a lot of research on a company before applying for a role there. If they notice a swathe of departing team members, they could easily be suspicious about the company culture, leadership, workloads, and more. 

11 effective 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 

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. And even then, the grass is often greener elsewhere. 

According to the Achievers 2024 Engagement and Retention report, the top reason for employees to job hunt is to seek better compensation. 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 compensation budget 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 retention efforts by picking some of the other options on this list. 

2. Equip your employees with lifestyle benefits 

Employee benefits are 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. 

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 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, mental health, family formation, etc. 

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

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. According to Ivanti’s Everywhere Work report, 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. 

Position yourself as an employer of choice by offering arrangements like: 

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

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 between 2022 and 2024 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 a structured program like Benepass Rewards and Recognition. This enables companies to design their own policy, for example, rewarding events like birthdays, milestones, achievements, and awards. Workers enroll directly through the Benepass platform and spend recognition funds on a range of rewards personal to them. 

5. Set up mentoring partnerships 

Another way to tether employees to your organization for longer 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. 

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 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. 

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. 

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 in retaining top talent. 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. 

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 2024 Global Human Capital Trends research say that the more transparent the organization is, the greater the workforce trust. 

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 

10. 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. 

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 challenging. “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.”

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, 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 impact your retention rates? Book a free Benepass demo today.