by Erin Ellison 
Updated January 2026
It’s not exactly news that retaining employees for a long time is often one of the keys to business growth and long-term success. Expertise, efficiency, institutional knowledge, collaboration, connection to the work—all built over time. But retention has been shifting over the last several years. In late 2025, quit rates (that’s the number of people choosing to leave their jobs voluntarily) cooled to about 1.8–2.0% per month. When we break it down by industry, there’s unnevenness. In fact, according to Mercer’s 2025 U.S. turnover survey, Retail and Wholesale leads with a 26.7% annual turnover rate while the Insurance industry is the lowest at 8.2%.
Career development, manager effectiveness, and employee well‑being look to remain top drivers of departures. So let’s look at employee retention strategies through the lens of what’s working now, with updated stats and ideas you can use this year.
Here are some ways you can keep your best employees on board in 2026.
What is Employee Retention?
Employee retention is keeping employees within an organization, and the practice is beneficial for business owners and workers. A robust employee retention plan ensures that employees feel appreciated and valued while helping the company grow, and are able to grow and develop in their current and future roles. A “good” retention rate varies by industry, but many HR benchmarks consider about 90%+ annual retention healthy. But, always judge against your sector and role mix.
INFOGRAPHIC: Employee Retention: How Do Culture & Connection Play a Role?
The Real Cost of Turnover (and Why Your CFO Should Care)
Conservative benchmarks indicate the cost of replacing an employee at 50% to 200% of their annual salary, depending on role seniority.
- Frontline/entry-level: 30–50% of salary
- Service/production roles: 40–70%
- Clerical/admin: 50–80%
- Skilled hourly: 75–100%
- Professional/technical: 75–125%
- Supervisors/mid-management: 100–150%
- Executives/C-suite: Up to 213%
Direct vs. Hidden Costs
Direct (Hard) Costs:
- Recruitment: job ads, agency fees, referral bonuses
- Onboarding & training: time, resources, lost productivity
- Separation-related: exit admin, unused PTO payout, temporary coverage
Indirect (Soft) Costs:
- Brand and culture damage
- Vacancy loss
- Productivity dip (new hire ramp-up can stretch 6–9 months)
- Morale & cohesion impact
- Knowledge loss (institutional know-how and process memory)
Why Employees Leave
Unfortunately, it’s not always easy to figure out why employees leave. Getting them to open up on their way out can be tricky, though you might be able to learn more with strategic exit interview questions. There are a handful of items often seen to be common factors that contribute to employees leaving. Let’s explore them as you think about your employee retention strategy.
Managers Are the Retention Lever
Managers shape nearly every aspect of engagement—Gallup’s Workpace 2025 survey found they account for about 70% of team engagement variance. Yet engagement among managers themselves fell in 2024, especially for younger and female leaders. The potential fix? Equip managers with coaching, clear workload expectations, and recognition tools. When managers thrive, teams follow.
Toxic company culture
A toxic company culture often causes employees to leave a workplace. A company culture is the organization’s personality that defines how people should behave, interact, and communicate with each other to make things work positively and productively.
In a toxic company culture, negativity is allowed to run rampant. This kind of environment might present with the following:
- Low levels of enthusiasm
- Lack of communication and engagement
- Lack of conflict management
- Chronic stress
Work with your management to lead by example to establish and exhibit your company’s positive mission and values daily.
They want more training/development opportunities
In any job, staff will need to feel that they’re growing and developing new skills. This is especially true in industries where training opportunities are scarce or where job descriptions change frequently.
If your current employees cannot develop themselves with the organization, it’s not difficult for them to seek out greener pastures. It may be possible to keep employees by offering them more money or benefits, but these may not be the best long-term solutions.
Instead, take a look at available training opportunities and development within your organization to help in retaining key employees. Insight Global has made training and developing employees a key part of both the hiring process and our employee retention strategy, and our retention rate has improved in part because of these opportunities.
They Feel overworked or underpaid
If you question a departing employee in an exit interview, you may find out that they believe their salary doesn’t align with their workload or responsibilities. If you continue to receive feedback that your employees don’t feel their work is adequately appreciated through fair compensation and that their plate is constantly overloaded, it’s probably time for some candid self-evaluation of your company and its practices. Conduct market research to learn what a fair salary is in your industry and for each respective position. If you find a discrepancy between what you are paying and the going market rate, you may need to decide if paying lower is worth losing high-quality employees.
They don’t feel valued
This may seem obvious, but it’s important to understand that employees need to feel valued for their role at your company. If they don’t, it’s going to hurt your employee retention rate. Just because they’re not in a front-line position doesn’t mean they don’t work hard. Everybody has the potential to make or break an organization.
Take steps to identify where trust, compensation, or appreciation are lacking and do what you can to correct it with an employee recognition and reward program.
They Feel stressed
As an employer, it’s not feasible to monitor all the tasks your employees work on and complete. Your employees are responsible to a certain degree. But if they feel worried about job security if they can’t complete tasks during a certain timeframe, it adds unnecessary stress.
Further, your managers can strive to understand their employees and their needs on your behalf. Ask that your management team listen to employees and work with them to assess their workloads and deliverables, and offer guidance when necessary.
They don’t Connect with the direction your company is going
Disagreements about the future of a company are common and lead to turnover. It happens if employees feel that this disagreement will never be resolved. If an employee brings up concerns about your organization’s future, don’t brush them off and ask them to get back to work. Your employees expect you to listen to their complaints and take their opinions seriously. They may be able to help you make decisions that will benefit both of you.
What’s Working Now: Practical Moves You Can Implement
1) Connect with Your Team (and Keep the Conversation Going)
- Regular 1:1s and stand‑ups: Focus on goals, blockers, and support needs; consistency builds trust.
- Open‑door norms: Make it safe to raise concerns early; most turnover is preventable when surfaced quickly.
2) Build a Feedback Culture (and Act on It)
- Anonymous pulse surveys + stay/exit interviews help you see issues before they become exits. Treat “signals” (e.g., pay concerns) as prompts to examine workload, recognition, and growth, not as the sole fix.
- Close the loop: Acknowledge useful suggestions, pilot changes in one team, then scale with feedback. Preventable turnover often drops when employees see leadership act.
3) Clarify Accountability
- Team‑set goals and checkpoints: Shared expectations reduce ambiguity and stress; checkpoints reveal process issues early.
- Recognize wins: Specific, timely recognition tied to values and outcomes boosts engagement and reduces attrition.
4) Create a Safe Onboarding Experience
Retention starts week one. In Insight Global’s 2025 Employee Sentiment Report, 80% of workers said they would stay longer with better onboarding, and 60% of first‑90‑day leavers cite insufficient training.
- Build a 90‑day plan, assign a buddy/mentor, and map an early skills roadmap.
- Tip: Many teams report stronger engagement when onboarding extends beyond paperwork to culture, role clarity, and peer support.
5) Make Recognition a Daily Practice
- Blend structured and spontaneous: Use awards for measurable outcomes and ad‑hoc “micro‑recognition” for effort, learning, and collaboration.
- Invite peer‑to‑peer praise: Recognition works best when it’s frequent, authentic, and value‑aligned.
6) Prioritize Career Growth and Upskilling
- Career pathways: Internal mobility and stretch projects remain powerful retention levers—career development is consistently the #1 reason for leaving.
- Future‑skills (e.g., AI): Personalized learning and workflow‑level AI adoption can reduce manual tasks, increase engagement, and improve retention signals.
Developing An Employee Retention Strategy
Employee retention is a challenge for every organization, regardless of size or industry. Each employee plays an integral role in the success of your business, and it’s critical to have the right people in place to see projects through from start to finish. Organizations must first look at what is driving employees away and then take steps to retain their employees. Sometimes companies use outside help, such as strategy consultants, to do this.
Here are some things to consider as you develop your employee retention strategy.
Review Your Benefits Packages
Companies may see retention and engagement ROI on investing in the employee experience like benefits and perks. That might include things like:
- New and improved benefits
- Additional paid time off
- Upgraded recruitment and onboarding experiences
Career Advancement Opportunities
Employees are a crucial resource to any business. All the time and effort you’ve put into training and developing them can be lost if they lack a clear path to opportunities for advancement.
It’s vital to have a company culture that offers advancement opportunities to reduce turnover and keep employees. There are many promotional paths available for staff members who would like to advance their careers in a large corporation.
Employers can approach employees interested in growing within the company with special projects or temporary assignments in the marketing department, the finance division, or another department that interests them. Employees can also volunteer for these projects, and when they do, it’s important that a manager or director take real consideration to that employee willing to step up. Many companies also have internal programs that allow staff members with leadership potential to move into management positions with less experience than usual.
Remove Overwhelm and Overwork
Promotions and extra benefits are no good if the employees are miserable. If you notice one of your staffers struggling, ask them about their workload, connection to the work, and engagement at the company. The idea is that each employee should feel challenged but not overwhelmed at all times. This way, they can stay motivated, productive, and happy on the job.
Help Employees feel appreciated and recognized
Every employee wants to know that they’re an integral part of the business, and they want to be recognized for their achievements. Feedback and coaching in the moment matter. Data shows that employees who feel recognized and appreciated regularly are more likely to stay loyal and productive. As a manager, be looking for opportunities to praise your team members’ efforts—and give feedback on areas where they have opportunities to improve. If you need any ideas for how to make employees feel recognized or appreciated, read our article on employee recognition and rewards.
The rewards of retaining staff members far outweigh the benefits of having them walk out the door, often with all their knowledge and experience in tow. Having an employee retention strategy doesn’t just protect your bottom line–it gives you access to a team of motivated professionals who are likely to go above and beyond in their work.
Consider flexible working arrangements
Make flexible working arrangements work for you and your staff to increase the employee retention rate. People who work flexibly say they are more satisfied with their jobs, less likely to leave, and generally more committed to the company. Some businesses have a hybrid schedule for this reason, too. Instead of working a five-day work week in the office every day, it has become the norm in many workplaces to offer a work-from-home day on Fridays or Monday—or both. Creating a great work-from-home experience is one way of strengthening work-life balance.
Create professional development opportunities & Upskilling Opportunities
A top employee retention strategy is giving them opportunities for professional growth. This is one way to show them that you care about their future, which may motivate them more to produce quality work for your organization. Any sort of positive or constructive feedback to employees shows you’re invested.
Some professional development opportunities might include:
- Paid classes or workshops
- A mentorship program
- Industry networking events
- Conferences and forums
- Upskilling in areas like AI or other future-proofing skill sets
Encourage employees to attend programming and events and then share what they learn with the rest of the team when they return, so everyone benefits from their knowledge. Think of things they use in their day-to-day and skills they want to develop to grow. One of the most common skills added to employees’ resumes in 2025 was using AI—and artificial intelligence skills impact on retention. Consider creating an AI owner for your team who can help find ways to build adoption and integration into your workflows.
And don’t forget about social activities within the organization! Not only do social events help strengthen the relationships within your team, but they also provide employees with opportunities to meet people from other teams or executive-level staff. You could even organize a day where everyone can bring their kids to work so that parents can spend some quality time with them while still being productive at their job.
How do you calculate employee retention rate?
Your employee retention rate the rate at which employees remain with your company during a certain time period. Calculating your employee retention rate is important because it will tell you how often your employees are staying with the company.
For example, say your company started a six-month period with 100 employees. At the end of a six-month stretch, you have 60 of those same employees. That makes your retention rate 60%.
The higher the retention rate, the better, because it means more employees are sticking around. A retention rate of 60% means your company has some work to do to find out why 40% of your employees left over a six-month stretch. (The percentage of employees who leave is also known as attrition rate.) Forty employees may have left for other opportunities, disliked your culture, felt they weren’t appreciated, or didn’t feel like they could grow within your company. As we discussed earlier, it’s important to find out why those employees left.
Knowing your retention rate is important for attracting talent to your organization, because if they see that other people are leaving frequently, they might assume that there’s something wrong with working there. Conversely, if you have a high retention rate, it shows employees like staying within your company.
The Bureau of Labor Statistics said in 2021, the average voluntary turnover across the work force was 25%, meaning companies generally retained about 75% of its employees disregarding outside factors like layoffs or long-term disability. This number varies by industry, but if your retention rate is lower than about three-quarters, that seems to be below-average.
RELATED: How AI Can Impact Employee Retention
Wrapping Employee Retention Strategy
In today’s ever-changing world of work, employers must have a strong employee retention strategy in place to ensure their business has sustained, long-term success. This starts from your recruitment plan all the way to how employees are treated while they’re working for your company.
Companies that don’t know how to effectively retain employees will get left behind. They’ll be trying to handle employee engagement and the recruitment process all at once (and it likely won’t go well).
If you have already felt the effects of the wave of employee resignation, check out the Insight Global staffing page, and we’ll connect you with top talent quickly. If your company’s culture needs a reboot, explore Insight Global services and see how we can create a custom solution for your company from culture resets to developing a digital workforce.
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