Employee Retention Strategies For 2025: Beyond Employee Engagement
Retaining top talent is always a top priority. While employee engagement is essential, it is not how you will ultimately keep your best people. To maximize employee retention, you must go beyond engagement and implement targeted strategies that address the root causes of turnover.
When we covered this in 2024, employee engagement was a critical metric. However, in an employer-led job market in 2025, the script has flipped, and while compensation is still meaningful, employees also want to feel appreciated.
The Difference Between Employee Retention and Employee Engagement
These two terms are often used interchangeably because engagement does affect retention. Employee engagement refers to how engaged your staff is at work, while retention refers to their likelihood of leaving the company.
While high engagement does increase retention, a highly engaged employee may still be at risk of leaving if they get a better offer elsewhere or have toxic co-workers. Let’s dive into the reasons why your staff may leave in 2025 and what you can do about it.
Compensation: Pay Not Matching Work
The primary reason employees leave is compensation. In a People Managing People survey, 43.8% of respondents stated that their salary was disproportionate to their work. It’s also important to remember that people talk and pay transparency laws may soon come into play, which means that salaries will become public. If you’re paying Peter and John differing amounts for the same role, and the lower-paid individual finds out, they will likely start looking for another job, and the impact is likely to reverberate throughout the organization
How can you change your compensation models to match these trends? First, ensure you aren’t overloading your star performers by implementing Prodoscore for insight into workloads and overall burnout risk.
Second, introduce a performance-based compensation model. This way, those with similar salaries can increase their earnings if they are genuinely doing more and better work than their colleagues. We have a guide on how to do that here. If you introduce this model, your star performers will feel rewarded and properly compensated rather than resentful and burnt out.
Feeling Appreciated: Employee Recognition
Recognizing and rewarding employees for their hard work and achievements can go a long way in boosting morale and retention. O.C. Tanner, an HR firm, asserts that 80% of employees worldwide feel unseen, unappreciated, and overlooked. Tanner states that 50% of this cohort feel they are expandable to the company they work for.
While this is a broad generalization, if even 40% of your firm's employees think they are underappreciated, it will negatively affect retention. While showing employee appreciation is one of the easiest things you can do, there is a right way to do it—and it’s obviously not a pizza party.
Employee recognition programs are a great start, but they generally dole out awards to the top performers who are not the people who feel underappreciated. Hopefully, your star employees are treated as such, and you should keep recognizing them, but other team members will likely deserve recognition too. Here are some ways you can help your people feel seen:
- Feature an employee from your department each month and celebrate their successes
- Make a conscious effort to say a kind word or make small talk with everyone on your team
Avoid playing favorites by treating everyone on your team equally
If there is a big win, make sure each contributor is recognized equally
Pick random employees to feature in social media posts, newsletters, or other media your company produces
Tanner says that if individual accomplishments are not effectively celebrated and communicated, those individuals are 74% more likely to leave your business.
Career Development and Growth
Employees want to be confident that their careers are growing and developing. Providing opportunities for training, upskilling, and career advancement can help employees feel valued and invested in their future with your company. Encourage employees to take on new challenges, provide mentorship and coaching, and create clear career paths within your organization. Most importantly, offer money for courses and time off if necessary to attend them.
Other 2025 Retention Trends
Other trends that People Managing People and O.C. Tanner see for 2025 are:
- Creating a positive work culture
- Ensuring strong support through job changes
- Training managers to have more empathy and be better leaders
- Equitable flexibility (e.g., give the same flexibility to child-free workers as parents)
- Updating hiring and onboarding processes to offer more support
- Continuing to improve employee engagement
Employee retention is an ongoing process, and trends for a year do not necessarily reflect the needs of your employees. Make sure you regularly communicate, actively listen, and try to to address their needs as much as possible.
If you want to spot employees likely to jump ship before they reach that point, consider using Prodoscore, our employee productivity monitoring solution. It will give you meaningful data about how everyone in your business works and help you spot problems before they become a crisis, including a Retention Risk Report showing you at-risk employees.
