Employee turnover can have significant financial implications, often costing companies thousands in recruitment and training. Beyond the numbers, high employee turnover rates can adversely impact team dynamics and client relationships.
As the workforce evolves, with millennials and Gen Z making up a growing segment, businesses must adapt and rethink their retention strategies to align with changing expectations and workplace cultures.
In this article, we'll cover key strategies for helping your company retain its valuable workforce and drive long-term success.
In this blog post, you'll learn:
- Which benefits improve employee satisfaction within your organization.
- The importance of investing in training and development.
- How recognition and rewards improve employee retention rates.
Provide competitive compensation and benefits
While there are many innovative employee retention strategies, one of the most effective ways to retain an employee is by offering a competitive salary and a wide range of benefits. Employees want to feel valued and rewarded for their hard work and dedication. Conduct regular market research to ensure your salaries and benefits packages align with or exceed industry standards. Paying your employees what they're worth is better than paying the price of losing them.
While salary plays a crucial role, it isn't everything. The benefits you offer can also attract top talent. PeopleKeep's 2024 Employee Benefits Survey found that 81% of employees said an employer's benefits package is an important factor in whether they accept a job.
Let's review some of the most sought-after employee benefits you can offer your team.
Health benefits
Health benefits are the top choice, with 92% of employees in the PeopleKeep survey considering them important.
When offering a health benefit at your organization, you have some options. You can go with a traditional group health insurance policy, or a more cost-effective alternative like a health reimbursement arrangement (HRA).
HRAs are popular because they offer flexibility and are often more affordable than group health insurance policies. With a stand-alone HRA, you can reimburse your employees tax-free for their qualifying medical expenses, including individual health insurance premiums and out-of-pocket medical costs.
There are two types of stand-alone HRAs:
If you’re a small business owner struggling to offer health coverage to your employees, an ICHRA or QSEHRA might be the solution you’re looking for. With an HRA, you can control your budget, avoid steep annual rate increases for group plans that come with high utilization, and give your employees the freedom to choose their own health plans.
Paid time off
Employees also want paid time off (PTO), with 90% rating it as important. Time away from work helps employees rest, recharge, and maintain a healthy work-life balance. By offering paid vacation days, sick leave, and holidays, employers can reduce burnout and enhance the overall employee experience.
Retirement benefits
Retirement plans, like 401(k)s or pension plans, help employees save for the future and secure their financial stability after they retire. Our survey found that 89% of employees value retirement benefits. Providing them can help you become an employer of choice.
Commuter benefits
If your employees commute to work, providing a commuter benefit is another way to attract and retain them. Commuter benefits help employees with the cost and time it takes to get to work.
Some examples of commuter benefits include:
- Ride-sharing allowances for Uber or Lyft
- Fuel cards or gas reimbursement
- Toll reimbursement
Invest in career development
If you want to improve your employee retention rate, invest in employee development. Workers are more likely to stay with your company if there's room for them to grow. Professional development benefits help your employees hone their skills and progress in their careers.
Consider introducing the following:
- Training programs
- Mentorship opportunities
- Career development strategies
On top of company goals, you should also encourage your employees to set personal goals. Offer them the necessary resources and support they need to achieve them.
Make it a priority to promote from within whenever possible. It's crucial for employees to feel acknowledged for their hard work and rewarded with opportunities for advancement.
Create a positive work environment
If you want to retain your current employees, you need to maintain a positive work environment where everyone feels welcomed and appreciated. Create a company culture that values open communication, collaboration, and respect. When you encourage teamwork and provide opportunities for employees to socialize, they can build relationships with their colleagues and your brand.
Encourage work-life balance
An overworked employee won't last long. Maintaining a healthy work-life balance is essential for employee satisfaction and employee well-being. Offer flexible work arrangements, such as remote work options or flexible hours, to accommodate your employees’ needs and responsibilities. Our survey found that 57% of employees appreciate having access to remote work or a hybrid work environment.
You can even hop on the bandwagon of the four-day workweek. According to a survey from the American Psychological Association1 (APA), 22% of participants reported having a four-day workweek at their workplace in 2024, up from only 14% in 2022.
Provide regular feedback and opportunities for input
Employees value constructive feedback on their performance and recognition for their contributions. Conduct regular performance evaluations and offer insightful feedback to support employee growth and development.
Additionally, create opportunities for employee feedback on company policies, processes, and decision-making. You can gather feedback through employee surveys, such as engagement surveys or anonymous surveys. By normalizing feedback within your organization, you can improve the employee experience and boost employee morale.
Gathering input at every stage of the employee lifecycle is vital. For instance, conducting an exit interview can reveal the reasons for an employee's departure, offering valuable insights for your organization.
Recognize and reward employee achievements
Employee recognition and rewards are powerful motivators that can significantly impact employee engagement and job satisfaction.
Employees who experience meaningful recognition are more likely to stay with their company. Research from Gallup and Workhuman2 shows that those who are well-recognized are 45% less likely to leave within two years.
Implement a formal employee recognition program that acknowledges and rewards team members for their achievements and contributions.
This can include:
- Monetary rewards
- Employee of the month programs
- Public recognition within the organization
You can also offer a one-time spot bonus to reward your employees for meeting specific goals, celebrating their anniversaries with your company, or recognizing team achievements.
Conclusion
To build a thriving workforce, organizations need to go beyond traditional perks. It’s about creating an environment where employees feel valued, connected, and engaged. From providing growth opportunities to offering remote work options, the top employee retention strategies focus on understanding employee needs and fostering a supportive company culture.
This blog article was originally published on October 19, 2021. It was last updated on October 30, 2025.
- American Psychological Association - The rise of the 4-day workweek
- Gallup and Workhuman - The HumanCentered Workplace
