Improving Employee Retention: A 2026 Guide

What happens when you let low employee engagement slide? The consequences aren’t just low-energy employees or a stiff working environment. It’s high turnover and low retention.

Let’s say that up until this point, an organization barely cared how the worker felt. That lack of compassion is no longer professional posturing or corporate tradition. Today, it’s poison for profits and growth. Poor retention and turnover rates are an eight trillion dollar problem for companies globally. 

Meanwhile, retention is a high-ROI investment. Today, we’re writing a new chapter on remediating retention and tossing out turnover. Here’s how to improve employee retention in the new year, with costs, causes, and nine proven strategies.

The impact of high turnover and low retention

Recent estimates show that the bare-bones cost of a new hire exceeds $5,000 on average. Gallup says fully replacing a worker costs 1.5 to two times the employee’s annual salary. Most sources suggest that this isn’t the whole picture. 

We’re not always taking other costs into account with that departure and new arrival. For every person who quits, and every person who replaces them, there’s a drop in productivity. Funds are diverted to onboarding as an employee with less organizational familiarity works toward meeting the efficiency of the former employee.

All the while, customer service suffers and morale drops as employees deal with the uncertainty of a rotating cast of coworkers. Some of their former coworker’s tasks may have even landed on their plate for the time being, heightening their risk of burnout.

Why’d they leave? The problems plaguing your retention rates.

If an employee leaves because they aren’t getting paid enough, you’ll probably know it. Poor compensation is an accessible reason, an easy answer. We all know there’s a massive difference between feeling like you’re not being paid enough to fill your role and feeling like you’re not getting paid enough to put up with the following:

• Lack of recognition and appreciation. Employees who regularly receive recognition are far less likely to leave–in fact, it cuts the risk almost in half. When recognition is done right, it can clear up or compensate for the occasional instance of many other bad retention-makers.

• The old “dead-end job.” People don’t invest or stay fully engaged in relationships they see going nowhere. But promotions aren’t all employees mean when they mention leaving over a lack of opportunity. Crushing challenges, picking up new skills, and mentorship give hope for the future.

• Substandard leadership. Whether they don’t buy into the importance of recognition or are a poor communicator, employees are sometimes actually seeking to ditch their manager. Not the whole company.

• Toxic environments. Gossip, cliques, a culture of blame, and the fear created by bullying. Even environments that are too strict can stifle good employees. Micromanagement destroys their confidence and suggests a lack of trust in the workplace.
• High pressure and unbalanced workloads. An ever-growing scope of work, unreasonable expectations, and more make the environment stressful. What leaders may phrase as “dreaming big” or “aiming high” can end up completely burning out the people partially responsible for making it happen.

It’s harder for workplaces, especially startups and organizations on the rise, to get away with any known common cause of high turnover. Too many organizations are meeting the workforce’s demands, from flexibility to supportive cultures. 

How to improve employee retention: Key drivers for attracting and keeping the best talent.

Now we’ll dive into practical ways to keep employees in place. With each strategy, we’ll note which staff segment will derive the most benefit from it, but this will naturally vary by organization. We’ll also share implementation tips.

Here’s how to improve employee retention, nine ways. 

1. Offering a recognition-rich culture. 

Recognition is low retention’s most-prescribed remedy. It’s the way to deliver authentic appreciation–one of the most common gripes during exit interviews. Employees should be recognized by a manager at least once a week and be surrounded by a culture where thank-yous are part of the ritual, not just habitual.

Additionally, adding rewards and awards (including peer-nominated) and celebrating milestones such as work anniversaries should be consistent, timely, and again, authentic. But what matters even more is devising natural ways to celebrate small, daily wins. 

Peer recognition can help address morale drops and quell toxicity bubbling under. Tools and methods that involve gamification and rewards are a boon for Gen Z and Millennial workers.

Who needs this most: Everyone. That includes new hires, remote employees, high performers, all generations, regardless of tenure. 

Implementation: This is a long-term initiative requiring monthly planning. However, if you use a peer recognition tool (ahem!), you can get that part of it off the ground this week. Here’s a step-by-step guide for building a recognition program. 

2. Revisit and revitalize your onboarding process.

Your onboarding process, from the information distributed to the vibes conveyed, should align with what it’s really like to work at your company. However, starting right amid a cultural shift is possible. 

Setting clearer expectations is first. This may mean streamlining and adjusting the pacing/cadence of communications. The biggest issue new hires have during onboarding is information overload. 

Recognition begins before the first day as well. If you’re not passing out swag, be sure to have managers and peers send welcome messages, or include them in a team ritual or meeting.

Who needs this most: New hires. 

Implementation: Create a 90-day onboarding plan with a documented learning path. Start pushing engagement and connection earlier and earlier. Hybrid onboarding seems to get the highest marks from new hires. So, if you’re fully virtual, update your process to successfully onboard remote workers.

3. Invest in employee growth (and their managers, too).

Feeling as though there’s a lack of growth possible at a job is usually a communication problem, and often comes down to management. Employees came in seeing themselves going in one direction, and then just sort of meandered off course. And no one seemed to care until they were ready to split.

Provide clearer updates about internal mobility opportunities. Look into possible lateral moves and stretch projects. All forms of mentorship, especially when a newer hire is paired with a tenured employee in the company, are a plus. 

Managers may need additional training, too. There should be ways to hold them accountable when communications (like regular career path discussions and 1:1s) aren’t carried out. 

Who needs this most: It’s of particular interest to high performers and experienced employees who would be most attractive to competitors. Gen Z and Millennial personnel also consider this a perk.

Implementation: Plan for quarterly career path discussions, more intensive training, and mentorships. Opportunities such as workshops, lunch and learns, and other skill-sharpeners should be available at least monthly. 1:1s with managers should occur every one to two weeks.

4. Money isn’t everything, but it will always matter.

When your staff is engaged, other companies have to spend much more to lure them away. How much more it takes depends on what you’re offering. Secure market-rate pay, and get to work on fluffing up the rest.

Benefits. Employees often don’t use them because they don’t know what they are. It gets buried during onboarding. They also find that many are hard to access and difficult to use. In some cases, their employer even has a bit of an attitude about providing some of them in the first place. That lands even harder when the package isn’t personalized to what they need.

As we can see, the key to resolving such challenges isn’t even necessarily spending more money. It’s reviewing, updating, and instructing–transparent communication. Adjust offerings to the individual. Send them reminders of what they have, with tips on using it. 

Who needs this most: Everyone, including you. 

Implementation: Review and remind of benefits quarterly. Develop and adopt a total rewards approach toward compensation that asserts and makes visible the non-monetary perks of a company. This is better for intrinsically-motivated performance. That’s their regular compensation, benefits, recognition, growth and development, a culture of recognition, and our next key driver of retention, work-life balance. 

5. The new work-life balance includes work-life respect. 

Some degree of burnout is currently impacting approximately two-thirds of employees. They cite reasons such as feeling they have too little time to complete their work, as well as a lack of tools and resources to get it done. 

Honoring one’s work-life balance is about letting them set boundaries. For example, an employee draws a line at answering emails all weekend or refuses to fulfill someone else’s responsibility. Work-life respect involves one of the best-known burnout preventives: flexibility. 

Offer flexible work arrangements where possible, including hybrid and remote models. Wellness programs, such as gym membership reimbursements, step challenges, and educational opportunities, help as well. 

It’s critically important to personalize wellness programs for your staff. Stress management workshops or a financial literacy class can be more relevant than a Pilates subscription.

Who needs this most: Gen Z and Millennial workers report suffering burnout more often. This may be due to greater economic anxiety compared to their more financially established colleagues. However, everyone should be apprised of the company’s stance on work-life balance as part of a total rewards strategy. 

Implementation: Conduct a study, surveying employees and leadership to identify needs. Draft clear, cohesive policies concerning PTO and flexible work arrangements. Use the information gathered to design one or two wellness programs at a time. Consider monthly challenges, quarterly initiatives, and wellness-related incentives year-round.

6. Provide the structure to contain an inclusive community.

Creating community isn’t just about flexing an enviable culture; it provides holistic support to its inhabitants, preventing burnout and sustaining engagement. People are less likely to leave because they’re already where they belong.

Survey employees to reveal where Employee Resource Groups may be of benefit. Reach out to remote employees more often than you would to hybrid or in-person staff. Water cooler-style breaks, sharing common interests, and special cross-department collabs can help build connections as well. And never underrate the power of varied team-building exercises. 

Who needs this most: All resources should be emphasized and heavily promoted to new hires and remote employees. High performers may require more “down-to-earth” interaction with colleagues also. Performance-driven employees who aren’t made to feel an integral part of a team are more prone to leaving.

Implementation: This strategy also begins with surveys. Identify ERG needs, common interests, shared values, and other preferences that help us discern the conditions for productive social interactions. Test different team-building exercises ASAP in search of those that can become team rituals.  

7. Find the purpose, share the meaning.

When employees know how their work contributes to success or makes other tasks possible, their job has meaning. With meaning, they build a connection that keeps them engaged. When they’re engaged, they are more likely to remain retained.

We can take this a step further by sorting out what an employee does that aligns with a company’s values. Someone can know their job is to sit and type specific information into designated fields and be okay with that. When their manager points out that their attention to detail is a company asset that has increased accuracy by 15% that month, carrying over to increase efficiency in other areas, it has more meaning.

Make successes visible, and put facts behind them where possible. Don’t just recognize performance. Recognize the qualities and behaviors that the company considers necessary for success.

Who needs this most: Everyone, with new hires and younger generations requiring more concrete evidence and values reminders. 

Implementation: Leadership clarifies the company’s mission and values. More consistent recognition with a focus on making “small” stuff visible can start right away. Spot and shout out value-tied wins, such as a great customer call or thinking outside of the box.

8. Never take your finger off the pulse.

You can’t fix problems like low retention if you don’t know what’s wrong. In many instances, you won’t know what’s really wrong if you don’t ask. Pulse surveys dig into the culture’s health, managerial competence, and general satisfaction.

Here’s yet another great benefit of kicking off a culture of recognition. When employees feel more seen, they’re more inclined to speak up. Inviting, acknowledging, and acting on feedback are forms of recognition that cannot be beat. 

Furthermore, offering useful feedback has an impact on retention. Employees know where to improve and what they’re excelling at, increasing their security and confidence.

Who needs this most: All segments benefit from feedback loops and surveys, but what you keep an eye on differs. Insights from veteran, tenured employees can be reliable signals of drastic shifts. Responses from newer hires help measure the success of the onboarding process. Participation from remote workers is an indicator of how engaged they are. 

Implementation: Organize biweekly, monthly, and quarterly surveys. Educate management on feedback loops. Arrange systems for accepting anonymous feedback. Devise sorting and review systems to address and resolve feedback.  

9. Incentivize, recognize, reward.

Genuine appreciation will always win, but if you want to bump up those rates this year, show employees you mean business. Service awards and incentive programs are more standout ways to acknowledge and thank someone for their loyalty. 

Some cases warrant profit sharing and bonuses. The key is to center the emotional value of loyalty and gratitude. Monetary perks have a limited effect. Consider them enhancements, and keep the pricier ones in your back pocket.

Who needs this most: Experienced tenured employees, remote workers, and high performers. These groups are most likely to disengage when they feel their efforts aren’t of great importance to their employer.

Implementation: The quality and impact of rewards and incentives depend on how you tailor them to the organization. Further reading:

• Monetary vs. non-monetary rewards
• Employee incentive program ideas
• Service awards that acknowledge employee loyalty