10 Employee Retention Strategies and Ideas To Boost Engagement and Satisfaction

It's no surprise that satisfied and engaged employees tend to stay in their jobs longer. Renewing your focus on employee engagement and retention can encourage employees to remain with the organization rather than looking elsewhere for new career opportunities.

If you have seen a downward trend in retention or you want to lower your employee turnover rate or employee attrition rate, it may be time to re-evaluate your retention strategies.

What Is Employee Retention?

Employee retention refers to an organization’s ability to keep its employees over a specific period of time, often expressed as a percentage. It focuses on the proportion of employees who stay with the company, rather than just comparing the total number of employees at the beginning and end of a period. This ensures that factors like turnover and replacement hires are accounted for, offering a clearer picture of stability. High retention often reflects positive workplace culture and engaged employees, while low retention can highlight underlying issues, such as dissatisfaction or high turnover rates.

What Is an Employee Retention Strategy?

An employee retention strategy is a coordinated effort to increase worker satisfaction and limit employee turnover. Retention strategies help companies maximize their investment in their employees and reduce the costs related to hiring, training, and developing new workers.

According to our 2025 Priorities for Business Leaders report, more than half of business leaders say their top HR challenges for the next 12 months include attracting and recruiting talent, prioritizing employee mental health and well-being, and talent management. All these focus areas (and others) can affect employee retention at your organization. By evaluating each area and looking for opportunities to make positive changes, you can begin developing targeted strategies to improve employee retention.

Why Is Employee Retention Important for an Organization?

As employees gain tenure, they may grow in their roles and accrue experience that can save time, money, and resources. Employee retention helps establish and maintain a reliable knowledge and skills base throughout your company. New employees can benefit from being mentored by these long-term employees, enabling them to make meaningful contributions faster.

Alternatively, constant turnover can lead to the disruption of operational and administrative processes within an organization. Low retention rates often result in:

• Increased Hiring Costs: Replacing an employee is expensive; depending on the position, the estimated costs may exceed the outgoing employee's salary.
• Lost Time and Resources: When managers have to shift their attention toward hiring and training new employees, they will have less time to focus on other strategic company goals. The departure may also spark uncertainty and doubt among other staff members about their security within the organization.
• Disrupted Workflows: Low retention rates can disrupt workflow continuity, affecting customer service and productivity. Other employees may have to pick up the extra work until you hire a replacement, which can create ripples of resentment and anxiety among staff.

Why Do Employees Leave?

Employees leave companies for many reasons, including personal circumstances, negative experiences, and dissatisfaction with workplace culture or opportunities. Understanding the motivations behind employee departures can help you develop successful retention strategies.

Some reasons employees may leave their jobs include:

• Stagnant wages or inadequate compensation
• Limited path forward for advancement and career growth
• Feeling disrespected or a lack of recognition
• Insufficient childcare
• Not enough flexibility
• Lack of adequate employee benefits
• Working too many or too few hours
• Looking for an improved work-life balance

Exit interviews may also reveal unhappiness with management or coworkers, dissatisfaction with the company's direction or culture, boredom, lack of alignment with job expectations, or a general desire to make a change.

It's impossible to eliminate employee turnover completely, but you can encourage workers to stay by adjusting policies and management styles to support well-being and job satisfaction.

What Are the 3 Rs of Employee Retention?

To help keep great employees, align your company priorities with employee expectations for belonging, work-life balance, and meaningful contribution.

Leaders can shift cultural priorities by focusing on the three Rs of retention: respect, recognition, and reward.

• Respect: Respecting an employee's ideas, beliefs, and personal boundaries helps foster a sense of belonging and inclusion. Managers can communicate respect by honoring non-work hours, providing flexibility where possible, and communicating how an individual's work adds value to their organization.
• Recognition: Formal recognition programs that provide incentives can be helpful, but employees also value informal recognition from managers. Depending on individual preferences, this may include one-on-one conversations, public recognition, or a simple thank-you note for a job well done.
• Reward: The opportunity to perform meaningful work is an important reason employees stay at their company. You can communicate value and appreciation by offering monetary rewards (like bonuses) and social rewards (such as an employee of the month program).

10 Employee Retention Strategies

Each organization has a unique mix of factors that employees appreciate (such as a welcoming, inclusive work environment or strong company leadership with a clear vision for success) and those that could be more effective (such as training opportunities, flexible work hours, or mental health resources).

Before developing new retention strategies, evaluate what your employees like — and dislike — about their jobs. Use that information to build on the company's strengths while also improving current efforts.

Here are 10 areas to consider as you evaluate employee retention options.

1. Benchmark Compensation and Benefits

According to our research, the top benefits business leaders plan to use in 2025 to improve retention are short-term disability insurance (24%), long-term disability insurance (24%), and employee assistance programs (24%). Analyzing the market and understanding employee needs can help ensure you're providing competitive compensation packages and benefits.

Here are 3 ways to do that:

• Use industry data to compare your salary and benefits packages
• Analyze benefits usage to find out which programs employees value
• If you must pay employees below the industry average, you may be able to make up the difference by offering unique benefits or a flexible schedule

2. Invest in Training and Development

In addition to the initial investment needed to recruit and onboard an employee, about 54% of business leaders and HR managers surveyed say career planning and skill-building are top priorities for the next 12 months.

Employers can provide access to training using a learning management system along with live training and development sessions. Managers should also work with employees to develop an intended career path and set advancement goals.

3. Offer Mentorship Opportunities

Mentorship programs can encourage employees to stay by helping them build a relationship with someone in the company who can offer career advice and guidance.

There are several ways to incorporate mentorship opportunities into an employee's career lifecycle:

• Set up formal or informal mentorship programs to connect employees who would benefit from a mentor relationship.
• Pair new employees with a coworker as part of the onboarding process. This gives the new hire a resource other than their direct manager to answer questions or listen to concerns.
• Connect employees with mentors who can offer broader, long-term guidance related to professional development.

4. Give Employees Autonomy and Flexibility in the Workplace

Top employees want to help your business succeed. To help keep them engaged and satisfied, find ways to give them ownership over their work rather than micromanaging them. Encourage employees to suggest their own solutions to problems and allow them to recommend efficiency improvements.

Look for ways to give leadership opportunities to employees who want to advance into a managerial role. As they take on added responsibility, let them lead projects or serve as a department liaison. When employees speak up and offer solutions or advice, take their feedback seriously and provide thoughtful responses.

5. Create a Culture of Respect and Belonging

Employees want to know who they're working for, and they want to feel respected as a valuable contributor. A strong company culture can bring your company vision to life and help employees take ownership of that vision.

For example:

• Establish a culture that supports organizational goals and values. Employees who understand your vision for success may be more engaged and better equipped to contribute over the long term.
• Build a supportive workplace community. Help employees set up positive relationships that provide social support and respect for diverse perspectives.
• Help employees understand their contribution to the company mission. Regularly communicate how each team, department, and individual contributor helps the company achieve its goals.

6. Prioritize Mental Health and Well-Being

While workers may want their employers to prioritize mental health and well-being, this is becoming increasingly difficult in today's workplace. Whether employees are working remotely, in the office, or on a hybrid schedule, they may face challenges in supporting work/life balance.

To support talent retention, consider offering mental health services, flexible hours, or wellness programs. Focus on cultivating a supportive workplace and helping employees avoid burnout that could cause them to seek a career change.

7. Celebrate Achievements

Employees want to be recognized for their hard work, and that recognition is often most effective when it comes from direct managers. Think of employee recognition on a spectrum, from casual compliments at a staff meeting to formal award ceremonies. Here are a few ideas to help employees feel valued:

• Consider employee preferences. Find out what type of recognition your employees value most. It could be a small cash bonus, an extra day off, or public acknowledgment of their achievements.
• Structure a cost-effective recognition program that will achieve the desired results. You may not need to throw large company-wide parties when a small departmental recognition budget could allow managers to decide what works best for their team.
• Incorporate recognition on multiple levels. Recognize individual contributions, team achievements, and cross-organizational collaboration efforts.

8. Ask for Feedback

Sometimes, you don't know if an employee is unhappy until they turn in their resignation. Exit interviews can provide in-the-moment feedback about why employees leave.

Employee surveys and stay interviews with targeted employees can also help to gauge overall job satisfaction. Use the feedback to help shape future retention strategies.

9. Respect Work-Life Boundaries

Acknowledging employees' lives outside the company and staying in tune with what matters most for their life and career goals will go a long way toward keeping your best employees. This may include providing options about when and how they do their work, providing paid time off, respecting an employee's time off by not asking for additional work, and incorporating flexibility for appointments and personal days.

In addition, consider a flexible work model that allows for remote work, telecommuting options, and/or hybrid work schedules to better accommodate childcare needs, individual circumstances, and preferred work environments.

10. Provide Wellness Offerings

Wellness offerings can help employees navigate mental health concerns, performance challenges, and work-related stress. Wellness programs may include challenges, classes, or incentives to encourage employee health. For example, a wellness program might offer:

• Fitness challenges
• Nutrition education
• Stress management workshops
• Mental health screenings
• Financial literacy classes
• Retirement planning workshops
• Wellness surveys

Additional Ideas for Improving Employee Retention

Employee retention starts with prioritizing employee satisfaction and engagement. For example, companies may implement flexible hours, work-from-home options, retirement saving plans, or casual dress policies.

Here are 10 more creative ways to boost employee engagement and retention:

1. Encourage managers to handwrite thank-you notes to staff for performance or thoughtful workplace acts
2. Provide paid time off to participate in volunteer work
3. Form workplace teams for softball, volleyball, trivia contests, bowling, etc., and hold tournaments
4. Organize an annual staff talent show
5. Offer virtual lunchtime yoga classes, weight loss groups, and/or learning lunches with educational speakers
6. Obtain discounts from local merchants, such as health clubs, parking lots, or office supply stores
7. Allow workers the day off on their birthdays, or give them the option of a floating holiday
8. Set up a fitness room with weights and exercise equipment
9. Help employees offset the costs of childcare, family care, and even pet care
10. Organize short exercise breaks, such as 15-minute walks

The size of your company, your corporate culture, and your budget may determine the extent of employment retention strategies you can incorporate in the workplace, but never let lack of creativity be the limiting factor.

Let Paychex Help With Employee Retention

Employee retention rates may fluctuate as economic conditions and workplace demographics change. If your employee retention strategies don't also continue to evolve, you risk losing talent to competitors who can quickly capitalize on shifting workplace dynamics.

With Paychex, you can hire, retain, and develop talent from a single HR platform. We're here to help you craft impactful hiring and retention strategies that contribute to the long-term success of your organization.